R219 Enterprises Ltd. Plaintiff v. OK Builders Supplies Ltd. and, 2015 BCSC 1128

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: R219 Enterprises Ltd. v. OK Builders Supplies Ltd., 2015 BCSC 1128 Date: 20150630 Docket: 84988 Registry: Kelowna Between: R219 Enterprises Ltd. Plaintiff And OK Builders Supplies Ltd. and Pires Bros. Concrete Finishing Ltd. Defendants And OK Builders Supplies Ltd. and Bear Ridge Construction Ltd. Third Parties - and - Docket: 82558 Registry: Kelowna Between: OK Builders Supplies Ltd. Plaintiff And Falcon Powder Coating Ltd. and Jason Keeley Defendants Before: The Honourable Mr.

Justice Cohen Reasons for Judgment Counsel for R219 Enterprises Ltd., Falcon Powder Coating Ltd. and Jason Keeley: Clive Elkin Counsel for OK Builders Supplies Ltd.: Stephen W. Turner Counsel for Pires Bros. Concrete Finishing: Steven G. Schwartz Representative of Bear Ridge Construction Ltd.: Barry J. Olsvick Place and Dates of Trial: Kelowna, B.C. December 2 - 6; 9 - 13; 17 - 18, 2013 Place and Date of Judgment: Kelowna, B.C. June 30, 2015 I. Background of the Proceedings and Rendering of Decision

[ 1 ] In Action Number KE 84988, the plaintiff R219 Enterprises Ltd. (“R219”) claims that the services and work provided by the defendant Pires Bros.

Concrete Finishing Ltd. (“Pires”) fell below the standard expected of it, and that Pires both negligently, and in breach of its express and implied obligations in its agreement with R219, failed to properly lay, finish, and cure the exterior slabs on grade on the property owned by R219 at 747 Fitzpatrick Road, in Kelowna (the “property”). [ 2 ] R219 also claims that the defendant OK Builders Supplies Ltd. (“OK Builders”) both negligently, and in breach of its express and implied obligations in the agreement to supply R219 with concrete, supplied R219 with defective concrete. [ 3 ] R219 alleges that as a result of the breaches of contract and duty by both OK Builders and Pires, it has suffered and will continue to suffer loss and damages. [ 4 ] In Action Number KE 82558, the plaintiff OK Builders sues the defendants Falcon Powder Coating Ltd. (“Powder Coating”) and Jason Keeley (“Keeley”) for the balance due and owing to OK Builders as at November 15, 2008, in the amount of $29,488, for building concrete supplied to the defendants. [ 5 ] The parties agreed that the two actions would be tried together.

The trial was adjourned on June 18, 2012, and later continued before Barrow J. for 12 days from December 2-18, 2013. [ 6 ] On November 3, 2014, pursuant to the ex mero motu order of Hinkson C.J., under Rule 23-1(10) of the Supreme Court Civil Rules , I was nominated to render a written judgment in lieu of Barrow J. [ 7 ] I have held several telephone conference calls with all counsel, and Mr. Barry Olsvik (“Barry Olsvik”) representing the Third Party Bear Ridge Construction Ltd. (“Bear Ridge”).

I ordered the production of a complete set of transcripts of the trial for my use and that of counsel and Barry Olsvik, at no cost to them. I have also obtained audio discs of the trial proceedings and have had access to the filed exhibits. Counsel and Barry Olsvik supplied me with their written submissions making reference to portions of the transcripts in support of their submissions.

I appeared in Kelowna for one day on April 8, 2015, to hear the oral submissions of counsel and Barry Olsvik. [ 8 ] Counsel and Barry Olsvik have agreed to the process of my delivering a decision based upon my review of the transcripts of the trial and their written and oral submissions. They have entered a consent order that provides, inter alia, that in the event of an appeal from my decision, no party shall request a new trial. [ 9 ] The Court appreciates the patience, understanding and cooperation of counsel and Barry Olsvik in all of the circumstances. II.

The Parties [ 10 ] In 2007, two metal frame industrial buildings were constructed on the property for R219. Powder Coating carries on a metal powder coating business from one of the buildings (the “Powder Coating building”) on the property, and is R219’s tenant.

The other building is used as a self-storage facility. [ 11 ] Keeley is an officer, director, and owner of R219 and Powder Coating. [ 12 ] R219 and Powder Coating are members of the Falcon group of companies, which carry on a variety of manufacturing and other industrial operations in and around Kelowna. [ 13 ] OK Builders is a local ready-mix concrete manufacturer and supplier. [ 14 ] Pires is a local concrete finisher. The principal of Pires, Mr. Joseph Pires (“Joe Pires”), placed and finished the interior and exterior slabs on grade during the construction of the buildings on the property.

The terms of the agreement with Pires regarding the exterior slabs on grade, including what exactly it was contracted to do, and who contracted with it, is in dispute. [ 15 ] The Third Party, Bear Ridge, is a local contractor that was retained by R219 to construct the industrial buildings on the property. Its principal is Barry Olsvik. Mr. Don Olsvik, the brother of Barry Olsvik, is one of the other principals of R219. The terms of the agreement between R219 and Bear Ridge are also in dispute, specifically whether its agreement extended to the placing and finishing of the exterior slabs on grade.

R219 and Bear Ridge claim that it did not, whereas Pires claims that it did and that Pires was a subcontractor to Bear Ridge for this part of the work. III.

R219’s Claim Against OK Builders and Pires [ 16 ] In the Statement of Claim in Action Number KE 84988, R219 alleges that it was an express term of the agreement it had with OK Builders to supply the concrete for the work and that the concrete meet the applicable CSA standards, including CSA A23.1-00 and CSA A23.2-00. [ 17 ] Further, R219 alleges that it was an express or implied term of the agreement that the concrete supplied by OK Builders was of merchantable quality, would be durable for a reasonable period of time having regard to the intended use, and was of a quality and fit for the purpose intended.

R219 also relies on the implied warranty set out in s. 18 of the Sale of Goods Act , R.S.B.C. 1996, c. 410. [ 18 ] R219 also alleges that the concrete supplied by OK Builders was defective, and that it relied on OK Builders in respect of the specifications for the concrete.

R219 claims that OK Builders, in breach of its express and implied obligations in the agreement, supplied defective concrete in that it supplied concrete with insufficient or inadequate compressive strength; supplied concrete which did not meet the appropriate air-void system parameters; chose specifications for the concrete which it knew or ought to have known were

inappropriate for the application; supplied concrete from a batch or batches which had been mixed for another application, and prepared in accordance with the specifications of that other application, and thus was not suitable for R219’s application; supplied concrete that was not appropriate for the specifications required for R219’s application; supplied concrete that was not appropriate having regard to the weather and other conditions at the time of delivery; and, supplied concrete that did not meet the requirements of CSA standards A23.1-00 and A23.2-00. [ 19 ] With respect to R219’s claim against Pires, R219 alleges as follows in its Statement of Claim: 6.

Pires Bros. agreed with R219 to perform all laying, finishing and curing services in respect of the Exterior Slabs. R219 relied on Pires Bros. in respect of its qualifications and Pires Bros. held themselves out as experts in the laying, finishing and curing of the concrete. 7. Between in or about April 2007 and November 2007, the Exterior Slabs were poured, and Pires Bros. laid, finished and cured the concrete in the Exterior Slabs. 8. In or about Spring 2008, R219 noticed that the surface of the Exterior Slabs had started to deteriorate, delaminate and scale.

Since then, the surface of the Exterior Slabs has continued to deteriorate, delaminate and scale, and such damage has progressively deepened, widened, spread and increased. 9. R219 states that the services provided and work provided by Pires Bros. fell below the standard expected of Pires Bros. in such circumstances. Pires Bros. both negligently and in breach of its express and implied obligations in its agreement with R219, failed to properly lay, finish and cure the Exterior Slabs, the particulars which include but are not limited to: a.

It chose specifications for the concrete which it knew or ought to have known were inappropriate for this application; b. It ought to have known that the concrete supplied was inappropriate for this application; c. It laid, finished and cured the concrete in an inappropriate manner having regard to the weather and other conditions at the time of laying, finishing and curing; d. It provided insufficient, inadequate or non-existent curing; e. It over-finished the concrete, and destabilized the entrained air at the surface; f.

It added too much water to the surface during the finishing process, creating air to form voids under the dense surface of the concrete; g. It used a concrete mix which was lower than that required for compressive strength; h. It permitted rain and bleed water into the concrete surface; i. It left the Exterior Slabs in a state which it knew was susceptible to premature deterioration, delamination and scaling; and j.

It failed to take steps to ensure the the (sic) Exterior Slab would not prematurely deteriorate, delaminate or scale. [ 20 ] Counsel for R219, in his oral submission, stated that while R219’s tort claim against OK Builders and Pires is not abandoned, this is really a case about breach of agreement. [ 21 ] R219 hired Mr. Klint Ketchen of K.D. Ketchen & Associates (“Ketchen”), a structural engineer, to draw the General Specifications for the work.

It entered into a written agreement with Bear Ridge to construct the two buildings, and entered into a verbal agreement with Bear Ridge to do the site preparation for the exterior slabs on grade. R219 entered into an agreement with OK Builders to supply all of the concrete for the work.

Also, R219 claims that it entered into an agreement with Pires to place and finish the concrete for the exterior slabs on grade. [ 22 ] With respect to the relationships between the parties in connection with the issues raised in these proceedings, R219 concedes that “there was no question that there was sloppiness and confusion by all parties respecting the proper names of parties to documents.

No-one involved took the time to sort out that confusion … often the wrong Falcon company was invoiced, often documents were written or addressed to the wrong company, and even OK Builders sued the wrong party.” In any event, OK Builders accepts that it had an agreement with R219 to supply the concrete for the exterior slabs on grade. [ 23 ] R219 claims that it chose concrete over asphalt for the exterior slabs on grade because of its longevity and strength.

It contends that at the time of their installation, it was known to Pires and Bear Ridge that the exterior slabs on grade around the Powder Coating building were to be used for parking, driving (both for the drop-off and pick-up of goods, but also to access the self-storage facility), forklift traffic, and steel wheeled cart traffic and storage.

The circular flow of goods included the use of the exterior concrete around the Powder Coating building to transport finished goods out the south side of the building on steel wheeled carts to and from storage tents at the southern tip of the top layer of the property. [ 24 ] Ketchen prepared the structural specifications for the Powder Coating building, but not the mechanical and electrical specifications.

In preparing the structural specifications relating to the concrete for various purposes, Ketchen stressed compliance with CSA standard clause Can3-S23.3 (when in fact clause A23.1 is the governing CSA standard dealing with concrete materials and methods of concrete construction). Moreover, he specified a compressive strength of 25 MPa with air-entrainment.

R219 acknowledges that Ketchen’s specifications for the concrete for the exterior slabs on grade were in error (Ketchen acknowledged in cross-examination that Can3-S23.3 was a typo and that an owner cannot be expected to make sure that he quoted the correct CSA standard). In any event, as it turned out, Ketchen’s specifications for the exterior slabs on grade were not used or relied upon by any of the parties.

[ 25 ] R219’s agreement with Bear Ridge was to construct two metal buildings on concrete footings. Keeley and Barry Olsvik testified that the agreement did not include exterior slabs on grade, and that the site preparation work done by Bear Ridge on that aspect of the work was considered an extra, and paid for on a cost plus 10% basis. However, the agreement did cover payment to trades such as Pires for its work on the interior slabs on grade. [ 26 ] Regarding the extent of the damage to the exterior slabs on grade, R219’s engineering expert is Dr. Bozena Czarnecki of EBA Engineering Consultants Ltd. (“EBA”). Dr.

Czarnecki wrote two reports, one in February 2010 (“2010 Report”) and one in May 2012 (“2012 Report”). In her 2010 Report, she notes that the concrete for the exterior slabs on grade was poured in the summer and fall of 2007. In 2009, concrete scaling was reported. In her

section on site observations, Dr. Czarnecki wrote that moderate to severe scaling and delamination was noted on parts of the exterior slabs on grade. IV. Discussion and Decision A. R219’s Claim Against OK Builders 1. Discussion [ 27 ] In its submission, R219 reviewed the terminology used in relation to the issues raised by the parties.

Air-entrainment is the process of intentionally incorporating air into concrete by means of a suitable admixture; the compressive strength of concrete (how hard the concrete is) is measured in units of pressure (e.g. 30 or 32 MPa) at 28 days post installation; exposure class is how the CSA classifies concrete according to the concrete’s intended application (e.g.

C-2, F-1); slump is a measurement of the consistency and stiffness of mixed concrete; and the spacing factor is the distance, measured in micrometers, between the microscopic air bubbles in concrete. [ 28 ] R219 asserts that the concrete supplied by OK Builders for the exterior slabs on grade had inadequate protection against freeze- thaw damage.

R219 also asserts that in places, the surface of the concrete was over-finished, notably by the use of a power trowel on the air-entrained concrete (according to Joe Pires, placement of the concrete for the exterior slabs on grade was by use of a boom pump truck, bull float, power trowel, and hand trowel with a broom finish), which caused delamination, exposure of the aggregate, and an acceleration of the damage. [ 29 ] In its submission, R219 asserts that the requirements of CSA standards A23.1-04 and A23.2-04 should have been met for the exterior slabs on grade.

Table 1 to CSA standard A23.1 defines the various classes of concrete exposure and stipulates that the “C” class applies to chloride exposure, and the “F” class applies to freezing and thawing without chloride exposure. [ 30 ] R219 submits that the exterior slabs on grade were to be exposed to chlorides, such as de-icing salts and salts tracked by vehicles, and thus the appropriate exposure class for the exterior slabs on grade was C-2, defined as non-structurally reinforced concrete exposed to chlorides and freezing and thawing. [ 31 ] CSA standard A23.1 provides in clause 4.3.3.2 that concrete of air Category 1 in Table 4 (requirements for air content categories) shall meet the requirements of clause 4.3.3.3 to establish a satisfactory air-void system. [ 32 ] R219 contends that neither OK Builders’ mix design, nor the concrete that was supplied by it, met the requirements of Table 2 (requirements for “C” and “F” classes of exposure) and Table 4.

It claims that there was an overwhelming failure to meet the criteria set out in clause 4.3.3.3. [ 33 ] In 2009 and 2012, EBA, both under Dr. Czarnecki’s supervision and with her involvement, took cores from the exterior slabs on grade in issue, and performed linear traverse tests on them.

The tests involved a microscopic review of the air-voids within the concrete cores. [ 34 ] Clause 4.3.3.3 of CSA standard A23.1 (air-void parameters) provides that concrete will be considered to have a satisfactory air- void system when the average of all tests shows a spacing factor not exceeding 230 micrometers, with no single test greater than 260 micrometers, and air content greater than or equal to 3.0% in the hardened concrete.

For concrete with a water-to-cementing materials ratio of 0.36 or less, the average spacing factor shall not exceed 250 micrometers, with no single value greater than 300 micrometers. [ 35 ] According to Dr. Czarnecki, the concrete tested failed both times to meet the criteria for freeze-thaw durability. Further, Dr. Czarnecki found a correlation between density and spacing factor in her 2012 Report, so as to be able to conclude that 78% of the concrete placed on the work site would fail the spacing factor testing. [ 36 ] R219 notes that the testing done by OK Builders expert, Mr.

John McClafferty, a senior materials engineer with Stantec Consulting Ltd., consisted of a site inspection and the use of a small sounding hammer, which it claims is not an approved CSA test and cannot be used to detect the spacing of microscopic bubbles within the concrete. [ 37 ] R219 argues that the objective evidence shows almost overwhelmingly that the concrete tested had an inadequate air-void system, and that with the statistical correlation between density and spacing factor reliably established, a high proportion of the concrete installed has an inadequate air-void system. [ 38 ] As mentioned, exposure class is how the CSA classifies concrete according to the intended application.

According to Dr. Czarnecki’s 2012 Report, based on the type of exposure for the exterior slabs on grade, the concrete supplied must comply with exposure class C-2. The CSA definition of class C-2 concrete is non-structurally reinforced concrete exposed to chlorides and freezing and thawing. The requirements for class C-2 exposure are listed in Table 2 of CSA standard A23.1-04, and include a maximum water to cementing materials ratio of 0.45, minimum specified compressive strength at 28 days of 32 MPa, and air content of 5% to 8% for 20 mm aggregate.

[ 39 ] The CSA definition of exposure class F-1 concrete is concrete exposed to freezing and thawing in a saturated condition but not to chlorides. The requirements for class F-1 concrete are a maximum water to cementing materials ratio of 0.50, minimum specified compressive strength at 28 days of 30 MPa, and air content of 5% to 8% for 20 mm aggregate. [ 40 ] As explained by Dr. Czarnecki in her 2012 Report, the durability of concrete exposed to freezing and thawing cycles is improved when a network of small voids is entrained into plastic concrete.

Entrained air concrete is defined as air intentionally incorporated by means of a suitable admixture. The fundamental requirement for preventing freeze-thaw damage is the spacing of the air-voids defined as the distance between adjacent air-voids. If the concrete is produced with inadequate air-void characteristics, the damage upon freezing continues to subsequent layers of exposed concrete until the concrete disintegrates entirely. [ 41 ] There is a dearth of OK Builders records in evidence relating to the issues between the parties.

However, according to an OK Builders delivery ticket in evidence, the mix design for the concrete delivered to the work site for the exterior slabs on grade is “526 30 MPa Driveway F”. In another OK Builders’ document, OK Builders batch table for branch 51, the description and recipe for OK Builders mix design 51526, which is titled “30 MPa Driveway F”, is found. [ 42 ] In her 2012 Report, Dr.

Czarnecki opined that OK Builders mix design 51526 did not meet the criteria for CSA standard A23.1- 04 class C-2 exposure, stating that the design strength is lower, and the maximum water to cementing materials ratio is higher. The 2012 Report states that the description of “30 MPa Driveway F” for mix design 51526 used by OK Builders implies that this mix is to be used for driveway construction, but she states that in fact this mix is not appropriate for driveway application, which should be designed instead as CSA standard class C-2 exposure.

In her 2012 Report, she also states: Of importance is the fact that CSA requirements for air-entrainment in concrete are identical for the Class C-2 and Class F-1 exposure. Based on the testing conducted by EBA, the dominant cause of progressive concrete failure is the lack of adequate air-entrainment in concrete supplied by OK Builders. [ 43 ] According to Mr. McClafferty, the concrete delivered by OK Builders to the work site had the strength and durability characteristics to meet the intent of the CSA standard for a class F-1 exposure.

He explains in his report dated March 23, 2012, that generally concrete having a compressive strength of 30 MPa would be considered to offer sufficient strength and abrasion resistance for the operation of the exterior slabs on grade as observed during his site review. He goes on to state: The concrete, however, would not be highly resistant to significant impact and abrasion such as from impact of the forks of fork lift trucks. Nonetheless, in accordance with the requirements of CSA Standard A23.1, it is the owner’s responsibility to specify special considerations such as abrasion resistance.

The surface of the slab is subjected to abrasive point loads from steel wheels, sliding pallets, heavy turning wheels, and sand-gravel transitions onto the slab. In the current condition, the point loads and the abrasive action on the slab are significant as these actions aggravate the surface deterioration observed. [ 44 ] He also said that the concrete ordered and supplied by OK Builders, based on the information provided, met the intent of the specifications.

He makes this statement based on his understanding that R219 specified the concrete on a performance basis, and that it was obligated to specify, inter alia , durability criteria including class of exposure, any additional criteria for durability, volume stability, and any other additional owner performance, prequalification, or verification criteria. [ 45 ] Mr. McClafferty goes on to note that the information and observations made as a result of his site review would concur with Dr.

Czarnecki’s opinion regarding the location of the exterior slabs on grade, but in his opinion the source of deterioration observed should be expanded to include finishing the concrete surface with a power trowel.

He states that the vast majority of the surface damage is delamination, and that a small percentage of the area of damage is from scraping, point loads, abrasion, and possibly extra water worked in the paste in a small area near the east drain. [ 46 ] He states that initially the steel wheels had an abrasive effect on the concrete surface due to inherent weakness of the finished surface, and that the continued use of steel wheels will likely result in the further loss of the weak finished surface.

However, given the reported compressive strength of the concrete, once the weak finished surface is delaminated and removed, the exposed underlying concrete surface is expected to be more resistant to the traffic of steel wheeled carts. [ 47 ] He also states that the concrete specified was adequate for the exposure conditions of the concrete given R219’s intent not to apply de-icing chemicals for ice control, and that further attention to placing, finishing, and curing practices at the time of construction would have resulted in a more durable surface. [ 48 ] Mr.

McClafferty states, as well, that a trowel finish was incompatible with air-entrained concrete and that over-finishing will negatively impact the quality of the air-void system “in the zone of influence at the surface, decreasing the freeze thaw durability.” He notes that the lack of adequate curing does not affect the air-void system of the hardened concrete, stating that the lack of curing impacts the strength development of concrete as a whole as well as the concrete surface, and that the lack of curing on the surface of the concrete aggravates the deterioration mechanisms observed. [ 49 ] In his report dated June 15, 2012, Mr.

McClafferty opines, inter alia , that the CSA exposure classes are intended for design purposes to best approximate the environment that a concrete element will be exposed to, and that the exposure classification of class F-1 is based on what the concrete is exposed to as evidenced from the filed investigation. He states: The durability criterion incorporates a factor or degree of safety. Meeting the requirements does not guarantee the concrete element will last and not meeting it that it will fail. The farther we move from the criterion the more likely success and failure will be. [ 50 ] In Dr.

Czarnecki’s 2012 Report, she responds to some of Mr. McClafferty’s points. In response to his opinion that the concrete specified was adequate for the exposure conditions of the concrete given R219’s intent to not apply de-icing chemicals for ice control, she states that his opinion is focused on R219’s intent with regard to the use of de-icing salts, instead of following the CSA classification.

In addition, she states that the failure of the concrete to provide freeze-thaw durability by inadequate air-entrainment was ignored in the report and focus remained on the surface deficiencies caused by over-finishing. [ 51 ] On the matter of air-void characteristics, Dr. Czarnecki’s 2012 Report concludes that a total of six cores were selected and that the results of the testing indicated that all six cores failed to meet the criteria for freeze-thaw durable concrete. [ 52 ] Dr.

Czarnecki also opined that the surface damage caused by improper finishing of the exterior slabs on grade with a power trowel, combined with a lack of curing, resulted in thin-layer delaminations, which could have been mitigated by scarifying comprised and over-finished cement paste and sealing the concrete. However, this type of repair is only effective if the concrete below the scarified surface is durable and provides good resistance to freezing and thawing cycles.

She opined that in this case, the concrete supplied by OK Builders failed to meet the CSA criteria for durable concrete upon exposure to freezing and thawing. [ 53 ] R219 claims that OK Builders ought to have chosen, produced, and delivered class C-2 concrete with 32 MPa compressive strength.

Instead, it chose mix design 51526 which had the wrong exposure class, insufficient compressive strength, an excessive water to cementing materials ratio, and an inadequate air-void system, and therefore it was in breach of its agreement with R219. [ 54 ] R219 also submits that OK Builders has a duty to provide a product that is fit for the intended use by its customer. In this case it did not fulfill this duty. [ 55 ] OK Builders’ delivery tickets contain a warranty that provides: All concrete is supplied in accordance with CSA-A23.1-00 and CSA A23.2-2-00 specifications.

OK Builders Supplies Ltd. does not accept responsibility for the properties on any appropriate C.S.A. standards. OK Builders does not accept responsibility for the properties on any concrete mix which has any product added to it by the contractor. [ 56 ] R219 argues that the warranty, set out in OK Builders’ delivery ticket, was a condition of their agreement in that it was intended to be a term of the contract and not a mere representation. [ 57 ] In addition, R219 contends that OK Builders breached the implied warranty of fitness for the purpose as set out in s. 18 (

a) of the Sale of Goods Act : 18 Subject to this and any other Act, there is no implied warranty or condition as to the quality or fitness for any particular purpose of goods supplied under a contract of sale or lease, except as follows: (

a) if the buyer or lessee, expressly or by implication, makes known to the seller or lessor the particular purpose for which the goods are required, so as to show that the buyer or lessee relies on the seller's or lessor's skill or judgment, and the goods are of a description that it is in the course of the seller's or lessor's business to supply, whether the seller or lessor is the manufacturer or not, there is an implied condition that the goods are reasonably fit for that purpose; … [ 58 ] R219 submits that all of the factors in s. 18(

a) are present in the case at bar, arguing that willful blindness or recklessness is not an excuse. It notes that the buyer does not have to expressly advise the seller of the intended use; rather, that factor of the test may be met by an implication. It also submits that the express warranty provided by OK Builders is not inconsistent with these implied warranties. In support of its position, R219 cites the case of Alie v. Bertrand & Frere Construction Co. (2000), 11 C.L.R. (3d) 19 (Ont. S.C.J.) , var’d on other grounds (2001), 11 C.L.R. (3d) 12 (Ont. C.A.) , leave to appeal ref’d [2001] S.C.C.A.

No. 418 , where the Court held that one of the defendants had breached Ontario’s Sale of Goods Act , R.S.O. 1990, c. S.1, when it supplied concrete that did not meet the minimum requirements of the Ontario Building Code or CSA standards (paras. 127-130). [ 59 ] Another matter to address is whether OK Builders is not liable because the characteristics of the concrete changed after it was delivered to the site.

R219 submits that OK Builders bears both the legal and evidentiary burden of proof to show that the characteristics of the concrete changed after it was delivered to the work site, and argues that OK Builders has failed to discharge its burden. [ 60 ] First, R219 submits that there is no evidence that water was added to the concrete at the work site. Second, while in theory a pump and boom configuration can affect the level of air in concrete, one ought to expect a consistent application of that impact for concrete delivered on a given pour date.

There is no such evidence, and R219 argues that the testing carried out by Dr. Czarnecki showed inconsistency in the air levels, leading to the conclusion that it was the inconsistent concrete, not an extraneous factor, that led to inadequate air levels. [ 61 ] Furthermore, R219 notes that there is no record of the actual level of air-entrainment introduced by OK Builders. In addition, unlike other mix designs in OK Builders inventory of mix designs, mix designs 51526 and 51554 have no set level of air-entrainment.

Therefore, R219 contends that “it hardly lies in the mouth of OK Builders to complain about the speculative impact of other factors when it cannot even demonstrate what the air levels were when the concrete left its plant.” [ 62 ] OK Builders argues that there is no evidence to show that the concrete it supplied to R219 for the exterior slabs on grade was defective. Rather, it submits that the evidence shows that it supplied the concrete that was ordered by R219, namely 30 MPa. However, in his cross-examination, Mr. McClafferty agreed that the 2012 test results conducted by Dr.

Czarnecki showed that the concrete failed to have a satisfactory air-void system pursuant to clause 4.3.3.3. [ 63 ] OK Builders argues that Dr. Czarnecki erroneously used the properties of hardening in place concrete to opine on the properties of plastic concrete delivered by it to the work site. On this point, OK Builders refers to the opinion of Mr. McClafferty, in reference to cores that were extracted by Dr. Czarnecki on April 27, 2012. His June 2012 report states: The cores are not representative of the concrete supplied by OK Builders.

The concrete … was in a plastic state at the point of discharge of the ready mix truck. The concrete was then moved and placed mainly using concrete pumps supplied by another party. Depending on the pump/line configuration, pumping air entrained concrete will affect the total air content …

Given the methods of placing and finishing, the plastic concrete…would have had the air content reduced between the end of the chute and the cores that were extracted for testing. [ 64 ] OK Builders also takes the position that, in any event, whatever issues may exist with the air-void system, it is not its responsibility to ensure that the concrete contains a proper air-void system.

Instead, it submits, this is the responsibility of R219, according to the CSA standards, and air-entrained in plastic concrete is only one of the many factors that contribute to a proper air-void system in hardened concrete. [ 65 ] OK Builders also contends that if R219 wished to ensure a proper air-void system in the hardened concrete, it should have specified this before delivery of the concrete, and it should have stipulated appropriate testing procedures, including testing for entrained air at each step in the placing and finishing process.

Moreover, OK Builders submits that testing at the work site as the plastic concrete came out of the truck chute could have been performed by R219, thus ensuring it received the concrete it desired for this part of its project. [ 66 ] OK Builders submits that air-entrainment can routinely be adjusted on the truck at the work site as testing results dictate, and that by not performing testing of the concrete in its plastic state R219 deprived it of the opportunity to remedy any issues arising with the concrete at the time of its delivery. [ 67 ] On the application of the Sale of Goods Act , OK Builders submits that it has no application to the facts in the case at bar.

It submits that the evidence shows that R219 merely placed an order for concrete of a certain specification, and that at no time did it tell OK Builders what the concrete was to be used for, or ask for its opinion on what type of concrete should be purchased for this part of R219’s work. [ 68 ] While it concedes that the concrete for the exterior slabs on grade was within the course of its business to supply, OK Builders submits that there is no evidence to indicate that the concrete delivered to the work site was not reasonably fit for its purpose.

It argues that since R219 took no proactive steps to ensure that the concrete ordered by it from OK Builders was actually suitable for its intended purpose, then R219 must bear the responsibility for its dissatisfaction with the outcome of this part of the work. [ 69 ] Mr. Ronald Busch is the director and operations manager of OK Builders.

He oversees the day-to-day operations of the ready- mix side of OK Builders. [ 70 ] In cross-examination, he testified that if the use to which the concrete is to be put is not provided by the person making the order, then he would expect OK Builders’ employee to make inquiries to make sure that the compressive strength and the use for the product is known to OK Builders.

However, he said that if the compressive strength ordered is lower than what an OK Builders’ employee believes in their mind is the appropriate strength, this does not concern OK Builders if the information is coming from a qualified contractor, and it would fill the order rather than pointing this out to the person making the order. He conceded that OK Builders could be supplying the wrong product, but said it was supplying the product on the instructions of the person making the order. [ 71 ] Mr.

Busch also testified that OK Builders had no knowledge as to who ordered 30 MPa, as opposed to 32 MPa, for some of the pours for the exterior slabs on grade. He said that it was his experience that the manner in which the compressive strength is communicated to OK Builders would typically come from an owner or a general contractor, as opposed to the supplier or finisher. [ 72 ] Mr.

Busch also said that OK Builders would wish to know the type of pumping, namely whether it is a line or boom pump, and that if this information is not made clear by the person making the order then the OK Builders’ employee would make this inquiry and the delivery ticket would make reference to how the concrete is to be pumped. [ 73 ] R219 argues that OK Builders is not simply an order taker of concrete, but that it has a responsibility to take whatever steps necessary for it to obtain appropriate information on the intended use of the concrete to be supplied to a customer so that it can then choose the appropriate mix design. [ 74 ] According to R219, damage to the concrete was evident at the first snowfall in the winter of 2007/2008.

Keeley found that parts of the surface of the exterior slabs on grade had delaminated. By spring of 2008, OK Builders and Pires had been notified about the extent of the damage. At that time, Joe Pires observed patches of delamination down to the aggregate in the area of pour 2. [ 75 ] Keeley testified about “fist size pieces” of concrete breaking off, and his ability to vertically place a metal rod through the entire slab in some places. There was also crazing, a spider web cracking that permits water to enter. 2.

Decision Who ordered the concrete from OK Builders? [ 76 ] On the matter of who actually ordered the concrete for the exterior slabs on grade, R219 submits that the Court should find that what was conveyed to OK Builders was not a specific compressive strength, but rather a request for concrete for exterior slabs on grade, and that based on this request OK Builders chose a mix design from one of its several available mix designs. [ 77 ] R219 points out that for pours 1 to 4, a 30 MPa was used (mix design 51526), and that for pours 5 and 6 a 32 MPa (mix design 51554) was used. [ 78 ] According to Mr.

Busch, a person unknown to him called OK Builders and ordered an exterior slab on grade mix specifying a compressive strength. He had no personal knowledge of who ordered the concrete for the exterior slabs on grade, nor did he have knowledge of why a 32 MPa concrete was used for the exterior slabs on grade for the self-storage building, whereas a 30 MPa concrete was produced and supplied for the exterior slabs on grade around the Powder Coating building. He did not suggest that it was Joe Pires that specified the order for 30 MPa, rather than 32 MPa.

[ 79 ] At his examination for discovery, Mr.

Busch testified that OK Builders had no records that showed who at his company received the call for the order of the concrete for the exterior slabs on grade; he did not know whether any person in his company made inquiries as to what the use of the concrete was going to be; he did not know if anyone in his company made any inquiries as to who was purchasing the concrete; his company does not make inquiries to satisfy itself as to whether the concrete supplied is fit for the intended use; the class for exterior concrete is C-2, F class concrete is more for walls, and the CSA standard of compressive strength for class C-2 is 32 MPa; and with respect to the batches that were prepared for the exterior slabs on grade, it was possible that the composition of the batches was one that was in place for or asked for by a different user and then used for this purpose as well. [ 80 ] Mr.

Busch also testified on his discovery that the order forms for the concrete written on a notepad, as well as the electronic order forms produced in the ordinary course of OK Builders business at the time of delivery, have all been destroyed. He could not say for sure if they were destroyed after the litigation was commenced. He also said that the batch records for May 14, October 13, and October 19, 2007, had been destroyed, but did not know why they were destroyed.

Thus, for some of the batches of concrete in issue, OK Builders had no record to show what the air-entrainment was. [ 81 ] Joe Pires, who insists that he had no involvement in the selection of the specification for the concrete used for the exterior slabs on grade, testified in cross-examination that he called OK Builders on occasion just to confirm that he would be at the work site at a certain time and to provide the location for the delivery of the concrete. [ 82 ] Joe Pires also testified that on occasion he has ordered 30 or 32 MPa concrete, and that on occasion he will order 32 MPa when the use of chlorides is a factor to be considered. [ 83 ] He said that he had no recollection of who ordered the concrete for the exterior slabs on grade around the self-storage building, but conceded that it could have been him.

However, he denied that he ordered the concrete for the six pours, also stating that he did not specify the use of 30 or 32 MPa for the pours.

He conceded that he would have contacted OK Builders to coordinate the delivery of the concrete, but insisted that the compressive strength of the concrete was already established by the time he called OK Builders. [ 84 ] Counsel pointed out to Joe Pires that at his examination for discovery he said that he could have been the person who placed the orders for the concrete, but he repeated that he might have placed the orders, meaning contacting OK Builders to arrange the delivery times for the concrete, clarifying that he did not provide the specification for the concrete as 30 or 32 MPa. [ 85 ] He did concede that as part of his duties he sometimes orders concrete by reference to the compressive strength as 30 or 32 MPa, and that it is possible he placed the order for the concrete that was delivered to the site on July 25, 2007.

However, in a later question and answer he said he did not know who made the decision to order the specifications for the concrete. He also said that for the exterior slabs on grade he did not have any concerns as to the quality of the concrete, or the strength of any of its properties or characteristics. [ 86 ] Joe Pires also testified that on occasion he used 30 MPa for exterior slabs on grade for other projects. He said that 30 MPa used to be the specification for exterior slabs on grade, but that it was changed at some point to 32 MPa, although he did not know the date when the change was made.

He could not say whether it would have been unusual to use 30 MPa during 2007, but said that 2007 was around the time of the change to 32 MPa. In any case, he knew that the concrete delivered to the work site for the exterior slabs on grade was 30 MPa, but said he was not concerned. He said his concern was leaving a nice finish for the customer. [ 87 ] Joe Pires also testified that there was no written agreement for the work that Pires did on the exterior slabs on grade.

He said that before he placed and finished the concrete for the exterior slabs on grade he knew the strength of the concrete and that if he believed that the strength was not appropriate he would make an inquiry. In this case he made no inquiry. [ 88 ] Joe Pires testified that he knew there were different types of concrete, but he had not heard of such terms as F-1 or C-2 exposure class for concrete. He said that if he ordered concrete he would specify 30 or 32 MPa, and would indicate whether the concrete would be pumped and the type of pump that would be used.

He said he knew that certain types of concrete are used when there would be exposure to chlorides.

He said that with respect to the R219 work, he understood the type of traffic that would be used on the exterior of the buildings, namely vehicles, forklifts and steel wheel carts, and that the exterior concrete would be exposed to chlorides. [ 89 ] As for the delivery of the concrete, he said that either he or Barry Olsvik would have called OK Builders to arrange the time and day, but he did not know who advised OK Builders about the specification for the concrete to be used for the exterior slabs on grade. [ 90 ] Keeley testified in cross-examination that although the concrete for the exterior slabs on grade was put on the Powder Coating account, he personally had nothing to do with the ordering of the concrete from OK Builders.

He said he did not know who made the phone calls to OK Builders to order the concrete, but that it was his understanding that Joe Pires would have ordered the concrete on behalf of R219 because his name appears on the delivery tickets. [ 91 ] In later testimony, Keeley conceded that there was no evidence to suggest that Joe Pires specified the type of concrete to be used for the exterior slabs on grade, but said his understanding was that Barry Olsvik would have communicated with Joe Pires and then Joe Pires would have phoned in the order to OK Builders.

He also said he thought that the mix design would have been pre-determined. [ 92 ] Barry Olsvik testified that he was not sure who placed the order for the concrete. When asked if at any time either he or any other representative of Bear Ridge discussed the specification for the exterior slabs on grade with anyone at OK Builders, he replied not that he was aware of.

Nor was he aware if anyone used the Ketchen General Specifications to communicate the specification for the exterior slabs on grade to OK Builders. [ 93 ] None of R219, Bear Ridge or Pires accepts responsibility for ordering the concrete from OK Builders. Bear Ridge insists that its involvement with R219 was the construction of the buildings on the property, and the preparation of the site for the placing and finishing of the exterior slabs on grade. Pires equally insists that its only involvement with OK Builders was to arrange for the delivery of the concrete to the work site for the exterior slabs on grade.

OK Builders has destroyed records that may have cast some light on who ordered the concrete for the exterior slabs on grade, and the information supplied to OK Builders as to the specifications for the concrete.

[ 94 ] Upon a careful review of the whole of the evidence, despite his insistence to the contrary, I find that it was Joe Pires who ordered the concrete with a compressive strength of 30 MPa from OK Builders for the exterior slabs on grade. I am satisfied that this finding is a reasonable and logical inference to be made from the evidence in all of the circumstances. It was Joe Pires who communicated with Barry Olsvik and then OK Builders to

schedule the delivery of the concrete for all of the pours; he has had prior experience with ordering concrete based on a compressive strength of 30 MPa; he conceded that he does order concrete as part of his duties; and, it was his name that appeared on OK Builders’ delivery tickets.

Did the concrete supplied by OK Builders fail to meet the CSA standards? [ 95 ] I find, on the whole of the evidence, that the concrete supplied by OK Builders to R219 for the exterior slabs on grade failed to meet the requirements of CSA standard A23.1, and in particular with regard to its freeze-thaw durability. [ 96 ] In arriving at my conclusion I have relied on the opinion of Dr. Czarnecki. She has a Ph.D. in civil engineering. The subject of her thesis was chloride mass transfer and durability of concrete. At the time of trial she had been a consulting engineer for 28 years.

She testified that everything she does in her practice in terms of concrete testing has to follow CSA standards, both in methods of construction and in testing. She was qualified to give evidence as an engineer with expertise on the properties and durability of concrete. [ 97 ] Mr. McClafferty, also an engineer, is employed by a ready-mix concrete company in Arizona. He does quality control. During the time that he was employed by Stantec in Edmonton he managed the geotechnical and materials lab for the technicians. He did mix design reviews and studies on existing concrete for clients.

He has also worked for a ready-mix company in Nova Scotia developing mix designs and providing technical support. In this province he worked for a cement company based in Delta where he provided technical support to customers, including to OK Builders in connection with the construction of the Bennett Bridge in Kelowna. He has also worked in Vancouver with a cement company that was engaged in the construction of high rise buildings, and expansion of a container terminal. [ 98 ] He was tendered by OK Builders to give evidence as a civil engineer specializing in concrete. [ 99 ] In cross-examination, Mr.

McClafferty conceded that he does not hold a Ph.D., that he does not sit on the technical committee for the CSA standards A23.1 and A23.2, and that he has never sat on that CSA technical committee. He also said that he is not qualified to conduct linear traverse testing to determine air-void characteristics. [ 100 ] He said that in connection with the purchase by OK Builders of cement from his employer for construction of the Bennett Bridge, his role was part of the sales group providing technical support.

He agreed that he provided project management, mix design expertise and training that led to the successful quality and supply of concrete for the Bennett Bridge. [ 101 ] I agree with the submission of R219, that the Court should prefer the evidence of Dr. Czarnecki over that of Mr. McClafferty where there is a conflict in their evidence. Dr. Czarnecki is an expert on the properties of concrete and its durability, a subject upon which she has researched and written upon extensively. She is also a member of the technical committee that reviews and suggests changes to CSA standard A23.1, and, unlike Mr.

McClafferty, she is qualified to conduct linear traverse tests. [ 102 ] On the other hand, Mr. McClafferty, apart from the fact that I do not think his credentials match those of Dr. Czarnecki for the purpose of the resolution of the issues in this case, has a history of employment and relationships with concrete suppliers. I think that some weight needs to be placed on the fact that he has had a prior working relationship with OK Builders, a relationship that may have introduced an element of bias into his views relating to the conduct of OK Builders in connection with the issues under review in this case.

For example, he opined that it was acceptable that the concrete in issue met class F-1 exposure, whereas even Mr. Busch conceded on discovery that the class for exterior concrete is C-2, and that the CSA standard of compressive strength for class C-2 is 32 MPa. [ 103 ] Turning then to Dr. Czarnecki’s opinions, I set out below her testimony, in chief, on her findings from her 2010 and 2012 Reports. First, I refer to her testimony with respect to the air content in the cement: THE COURT: Okay. To get -- what I'm trying to get at is how you get the air in there.

Is that something that's done at the plant when the cement is made up, or is it done when the cement is laid on the ground and the slabs are created? A It’s done at the plant … Q What is the significance of the air content in concrete which is exposed to freeze/thaw cycles? A That is the only prevention from damage caused by freezing and thawing cycles. … … Q And so how in … relation to that explanation, can you explain how the spacing factor, then, is significant? A Yes.

So this pressure relief can only be effective if these voids are close enough to act as a relief pressure, and this is where CSA gives a very strict guidance, saying that in order to be freeze/thaw durable, the spacing factor has to be not higher than 0.23 millimeters apart. … [ 104 ] Dr. Czarnecki also gave testimony with respect to the exposure class that she opines should have been used for the exterior slabs on grade in order to meet the CSA standards: Q Did you form any opinion as to the exposure class that ought to have been used in the exterior concrete at 747 Fitzpatrick Road?

A Yes. Q Can you explain that? A The exposure classification for exterior concrete flat work that is exposed to freezing and thawing cycles, which it is, and to chlorides is class C-2 . Q And what was the class of concrete that was used? A My understanding at the time, which was later confirmed by more information, was that it was delivered to meet the specification for class F-1. Q What is the difference between class C-2 and class F-1 concrete? A The fundamental difference is while both classes are expected to be freeze/thaw durable, class F references no exposure to de- icing salts or specifically chlorides.

Class C denotes exposure to de-icing salts. … Q Is the class F-1 concrete suitable for the exterior concrete at 747 Fitzpatrick Road? A No, it’s not. Q Why not? A Number one, it doesn’t have the water-cementing ratio from -- the minimum requirements for the exposure; and, number two, the specified strength is different. It’s 30 MPa versus 32 MPa … A … Now, I also went on explaining what happens when we have non-air-entrained concrete. In this case, there is a progressive damage that would start with the surface, but with time it also progresses to lower parts of concrete as it affects the whole interior.

So it’s a progressive damage. Originates from the surface but keeps on deteriorating. [ 105 ] Dr. Czarnecki gave the following opinion about OK Builders’ mix design 51526 which was used for the exterior slabs on grade: Q Okay. What conclusions did you make with respect to mix design 51526? A … The most significant one is that this mix does not meet criteria for A23.1 of class C-2 exposure. The reason is the design strength is lower; it's 30 versus 32 MPa, and water-cement ratio at 4.8 -- .48 exceeds 4 point -- .45 specified for C-2. So it meets the criteria for F-1; doesn't meet for C-2.

The other thing that is important, the 30 MPa Driveway F implies that this mix is intended for driveway construction, but this is not a suitable mix for application of C-2. … Q … aside from what you've already said, what were your comments with respect to [mix design 51526]? A My comment was that the mix as submitted for review is not suitable for driveway, sidewalks or pavement. Q And then down two to mix [design 51554], what was your comments with respect to mix [design 51554]?

A I called the mix non-air-entrained based on the fact that it didn't have any information about air, and I might comment that the mix does not comply with C-2 class exposure. And that was based on the fact that there was no information about air. [ 106 ] Dr. Czarnecki also testified that in her 2012 Report, of the six cores tested, three of them passed air content while three of them were below. More importantly, she said that all six cores failed spacing factor, some of them significantly. Dr.

Czarnecki was then asked what the cause of the concrete failure at the property was: Q And based on the -- the additional testing and the review of the -- the records, in your opinion, what were the causes of the progressive concrete failure in the exterior concrete slabs at 757 Fitzpatrick Road? A The dominant cause of interior concrete failure was inadequate freeze-thaw durability of entire concrete.

That was the primary cause. … I would also want to point that basically majority of the concrete supplied by the builder fails to meet CSA criteria for durable concrete, and also we had all this discussion about C-2 exposure versus F-1 exposure, regardless of different strength or different water cementing ratio, the air entrainment requirements are the same for these two classes, and therefore it failed both of these exposure classes. [ 107 ] I accept the position of R219 that in delivering the concrete to it for all of the pours for the exterior slabs on grade, OK Builders should have produced and supplied class C-2 concrete, for exposure to chlorides and freezing and thawing, with 32 MPa compressive strength at 28 days, water to cementing materials ratio not to exceed 0.45, and complying with air-entrainment category 1.

[ 108 ] Instead OK Builders chose from its several mix designs, mix designs that, according to Dr. Czarnecki, were inappropriate for the requirements of R219’s use. Thus, I find that OK Builders supplied R219 with defective concrete, in that the dominant cause of the interior concrete failure of the exterior slabs on grade was the inadequate freeze-thaw durability of all of the concrete supplied by OK Builders.

Did OK Builders breach its agreement with R219? [ 109 ] I find that R219’s claim against OK Builders can be decided on the basis of breach of agreement, and that OK Builders was in breach of its agreement with R219 by supplying R219 with defective concrete. [ 110 ] In paragraph 94 of these reasons I found that it was Joe Pires who ordered the concrete specifying a compressive strength of 30 MPa.

However, regardless of whether at the time of his ordering the concrete from OK Builders Joe Pires specified a compressive strength of 30 MPa exterior slab on grade, or simply placed an order for concrete for exterior slab on grade, in my opinion, responsibility for choosing the appropriate mix design for the concrete ordered rested not with Joe Pires, but at all times with OK Builders. On this point, Dr. Czarnecki testified, in cross-examination, with respect to the difference between ordering concrete based on prescription or performance: Q … I want to know what use you're making of Table 5 in your report.

A Table 5 provides some guidance as to how to specify concrete. And there are two ways, one is prescription, which didn't apply here, where the owner say I want this particular mix design to be used on my project. With that, the owner accepts full responsibility for the end product, even if he or she didn't really have any input in concrete production. A more frequently used method is alternative one, which is performance method, where the owner assumes that concrete supplier takes the responsibility for the product.

Now, when you take this alternative into consideration, there are certain things that the owner shall do, the contractor shall do, and the supplier shall do. And they are not exclusive. So -- inclusive. So if the owner didn't really specify anything but it has to be slab on grade, the supplier should know what it means and what category of concrete should be used for slab on grade. Now, my response in the -- in my second report was simply to point to Table 5, column 3 -- 1, 2, 3, 4, which simply states what supplier should do.

And so I listed these things, and to my understanding they were not shown prior to the project. And that is very frequently done in the absence of any testing, if the supplier can provide enough information about concrete mix design and concrete is a final product that it meets the requirements, all the other ones could be waived. Q But you will agree that that requires the owner to approach the ready-mix supplier and say, I would like you to provide these certifications? A Possibly, but not necessarily. [ 111 ] Dr.

Czarnecki then goes on to discuss what happens when concrete is ordered on the basis of performance: Q Okay, so on performance based. So under alternative, it says

(1) Performance: When the owner requires the concrete supplier to assume responsibility for performance of the concrete as delivered and the contractor to assume responsibility for the concrete in place. Now, that's the -- you say that that's what's applicable in this instance for this project? A Yes. Q So am I correct in that the owner would be required to have some communication with the concrete supplier to implement these -- this alternative? A Not necessarily. Q How would the owner require the concrete supplier to assume responsibility, especially when there's alternatives, without communicating with him?

A Well, is there a general contractor? That usually comes from a general contractor. Q Well -- A Which I am not aware of, that's what I am only saying. Q All right. So you -- so your question is was there a general contractor. Did you ask that of the -- of the owner? A No. Q Is it your expectation that in a project of this size there would be a general contractor? A My expectation may not have a lot to do with it, I have seen larger projects that wouldn't have a general contractor. Q All right.

So let's assume there wasn't a general contractor, who would -- who would appear in the place of the general contractor, it would be the owner, wouldn't it?

A Yes. Q All right. So either the owner or the general contractor would have to communicate with the concrete supplier for alternative (1) to become applicable? A Not necessarily. Sometimes it's assumed. I want this concrete and I assume that they -- the concrete that's delivered will be performing. Q You have to tell somebody you want the concrete, you have to communicate that to someone, don't you? A It obviously was communicated because the concrete was ordered. Q Who ordered the concrete? A I don't know. Q Do you expect it was the owner that ordered the concrete? A No, not necessarily. Q Does it matter? A No.

Q It doesn't matter who orders the concrete? A No. Q The standard says when the owner requires the concrete supplier to assume responsibility for performance of the concrete as delivered, because the alternative is Prescription, it says: When the owner assumes responsibility for the concrete. Somehow the supplier has to -- has to learn. A Yeah, the supplier must have known. Q So as a general contractor -- A As soon as the request comes for concrete, whether it's the owner directly, or whoever was delegated to do this, whether it's the general contractor or subcontractor, and I don't know that.

Q So are you -- is it your evidence that as soon as concrete is ordered that automatically the performance alternative kicks in? A Yes. Q Where does it say that? A Nowhere. Industry standard. Q That's nowhere in CSA? A No. So if -- if it was not prescription, where the owner said I want a mix design that has 300 kg cement and this and this, what is cementing ratio, it's automatically based on performance. Performance based on C-2 requirement. Q Okay. So for performance to kick in, the order would have to say, I want C-2 concrete, is that correct? A Not necessarily.

Q What -- what are the options, what are the possibilities? A I want concrete for slab on grade. Q Wouldn't you have to specify whether it was interior or exterior? A Yes, exterior and interior, yes. Q Because what we see in the specs here, going back to those specs, the engineer has given pretty -- pretty prescriptive like specifications? A No, he did not. Q So you say that the -- what he gave here was performance specifications? A This is still performance. Q All right.

A However, the first note says provide concrete and perform work to CSA A23.1. I cannot comment on why he put what he put, other than he probably had a very old spec, and he didn't realize that what he's quoting is no longer current, but I cannot comment on this because I didn't have a chance to review it before. [ 112 ] Dr. Czarnecki went on to testify that: Q But isn't -- isn't the -- isn't the supplier obligated to supply the concrete that was ordered by the owner or the contractor? A No. The supplier, who is knowledgeable in the field, and that's the assumption when you order concrete, should know.

And I -- I can safely assure that there are many suppliers that actually catch mistakes like this and say I will not supply like this because it will fail. Q So a contractor, we'll use Joe Pires as an example, he's a local contractor, he calls up OK Builders, their -- their order desk and says, I need this concrete. You say that the OK Builders at that point should say, whoa, I need to know what you're going to do with this, what are you going to do with this concrete? You might order the wrong concrete. A Yes.

Q So you don't -- you wouldn't take Joe's word for it, the contractor, you would then embark upon a -- a series of questions to verify that the -- that the placer or finisher knew what he was doing by ordering the concrete? A You ask for application, then you should know. Q But the reality is that the finisher calls up and orders the concrete, the supply company has no idea what the concrete is being used for, it's given a -- they're told, send this concrete out, and here's an address, here's a date and time. That's all they know. A No, that's not correct. Q What do they know?

A They must know where the concrete is going, because it would be different concrete for foundation footings, it will be a different concrete for foundation walls, and it definitely will be a different concrete for slab on grade exterior. Q So the OK Builders' truck turns up at a site, let's say this project site, it's met by a boom, a pump boom, there's a pump truck there, the driver backs up, he's told to back up, the concrete is pumped out of the truck, and goes who knows where, is the driver supposed to check to make sure -- A What do you mean by who knows where? I don't, understand the question.

Q Well, if I'm -- if I'm a concrete truck driver and I pull up to a driveway and drop some concrete off, I think I could see that it's going into a driveway, I know where it's going. A At that point it's too late. That information has to come to the plant to send correct concrete. Q Well, I'm -- I put to you that's not how this business works in reality. In reality -- A I know how the business works in reality, I've spent almost 30 years in this business. … Q Do you say the contractor has any responsibility to make sure the correct concrete is being ordered? A Yeah, at least that he states what it's for.

Q Do you say the owner has any responsibility to make sure that the correct concrete is being ordered or specified? A I don't think that there is any statement in this specification that the owner has to know concrete business. This is why they have their agents, this is why they have engineers, contractors, subcontractors. And concrete suppliers. Q But if the owner doesn't have an engineer, general contractor, then the owner steps into that place? A Yes. [ 113 ] What I take, and accept, from the evidence of Dr.

Czarnecki about the requirements of the CSA standards and the industry standards is that typically in a commercial project where concrete is ordered based on performance (rather than a specific mix design recipe), such as in the case at bar, the architect, general contractor or other representative of the owner will contact the concrete supplier and provide the performance requirements for the concrete ordered, such as compressive strength, exposure class, other durability criteria or details about the intended use for the concrete.

It is from this information that the concrete supplier chooses an appropriate mix design to meet the requirements of the intended use and purpose for the placed and finished concrete once it is delivered to the worksite. [ 114 ] However, in the case at bar, what I have found is that at the time Joe Pires contacted OK Builders to order the concrete for the exterior slabs on grade, he at the most provided a compressive strength, but no other performance requirements, including the exposure class or intended use of the concrete.

Based on the evidence, Joe Pires was well familiar with R219’s intended use for the exterior slabs on grade, and in my opinion, OK Builders had an obligation to make an inquiry of Joe Pires about the intended use and purpose for the exterior slabs on grade once the concrete ordered had been placed and finished. It is common sense that the success of the outcome of

the pour is largely dependent on the supply of concrete that meets the performance requirements of the customer and in this regard I find that OK Builders had an obligation to seek out as much detail as possible about the performance requirements of the concrete before it chose the appropriate mix design for the concrete ordered on behalf of R219. [ 115 ] In my opinion, it is not a defence for OK Builders to contend that the very concrete that was ordered by or on behalf of R219, was in fact delivered to the work site and therefore it has no liability to R219. In this regard, I reject the evidence of Mr.

Busch that it is acceptable for OK Builders to supply the wrong product simply because that is what an experienced contractor has ordered, a product that OK Builders believes may not be suitable for the intended purpose. If OK Builders is satisfied to supply concrete that it knows from the get-go is the wrong mix design for the intended purpose, then at the time of delivery it is clearly in breach of its express contractual warranty included in its delivery ticket. [ 116 ] I agree with the argument of R219 that OK Builders’ duty as the supplier of the concrete to R219 extends beyond merely taking the order.

It had the responsibility to ensure that the concrete produced and supplied to R219 met the performance requirements for the intended use and purpose of the concrete ordered, including that it contained a proper air-void system, as required by CSA standard A23.1, and in particular clauses 4.3.3.1, 4.3.3.2, and 4.3.3.3.

This, I find, was part of the express contractual warranty to R219 that it breached. [ 117 ] Thus, I find that OK Builders was in breach of its agreement with R219 because it expressly warranted in its delivery ticket, a warranty that forms part of its agreement with R219 for the supply of concrete, that the concrete it supplied to R219 for the exterior slabs on grade complied with CSA standard A23.1, when in fact it did not. [ 118 ] In light of the above findings, I do not consider it necessary to deal with R219’s alternative argument regarding whether OK Builders breached the implied warranty of fitness under the Sale of Goods Act .

Did the lack of testing by R219 absolve OK Builders of liability to R219? [ 119 ] Having found that OK Builders produced and supplied defective concrete to R219, there remains the matter of whether the concrete supplied should have been tested by R219 at the time of its delivery. OK Builders placed a great deal of emphasis in its argument on the point that R219, as owner, should have arranged to have the concrete tested for its properties (e.g. slump, compressive strength, air content) at the time of its delivery to the work site. [ 120 ] Mr.

McClafferty did not believe much turned on the absence of testing in terms of what would have happened, stating in his March 2012 Report that “the failure or oversight to test the concrete at the time of placement would have had minimal impact on the deterioration observed.” He was of the view that had a quality management plan and review been made in accordance with the requirements of CSA standard A 23.1-04, the expectation to trowel air-entrained concrete should have been identified and corrected prior to placing the concrete to prevent or minimize the deterioration observed. [ 121 ] However, in cross-examination, Dr.

Czarnecki, in response to Mr. McClafferty’s view that the failure to test would have had minimal impact, testified that she always recommends a mix design review prior to commencing the project. Dr. Czarnecki also testified that she would recommend plastic concrete testing, which is done on site, explaining that it is a standardized procedure where a sample is obtained on site from a discharge and tested for both air content and slump.

If testing is completed on site and the plastic properties of the concrete are compliant with the CSA, such as the air content, then the concrete will be finished; however, if it is non-compliant, the concrete will be sent back to the plant or there may be an attempt on site to entrain more air. With respect to the air content in the cement, air is typically entrained when it is produced, but the driver supplying the cement may be told to increase the air if testing on site shows that the air content in the plastic cement is below what the customer wants.

She testified, in cross-examination: Q And under concrete [Ketchen] says -- for exterior slab on grade he … says "slab on grade, no site testing required". Now, I take it from your reports that you think that this exposure class of F2 was stipulated by the -- the engineer is inadequate? A Yes. Q And what about the -- the no site testing required for the slab on grade? Is that inadequate in your opinion? A I wasn't engineer on the project. He could have had his reasons that I am not aware of. I wouldn't do it, but I cannot comment on his rationale behind it. Q Just so I'm clear.

You wouldn't do site testing or you wouldn't -- A I would. Q You would do site testing? A Always. In his point number one he states, "Provide concrete and perform work to CSA A23.1". Q Yes. A And that takes precedence. Q Over his -- his specifications? A Yes. Q Well, if that takes precedence then everything that follows doesn't need to be there, is that correct?

A I am not saying about everything, but that particular exterior slab on grade is not consistent with the first sentence. Q So saying that there's an inconsistency. But the CSA A23.1 does permit the owner to set his own specifications for the concrete? A Yes. Q So it would be consistent in those circumstances? A He was not the owner. He was supposed to be a professional engineer who knows. Q But he's hired by the owner, he's advising the owner? … Q So the owner makes the decision about where the -- the testing is going to occur, if there is going to be testing of the -- of the plastic concrete?

A I don't think it's the owner. It's the engineer that represents the owner should make the call. Q It's not a decision to be made by the -- the ready-mix supplier? A No, this is not a decision made by ready-mix supplier. The only difference is that when the ready-mix supplier knows that it's going to be pumped, the air content has to be adjusted for some potential changes. Q And how would the -- how would the ready-mix supplier know it was going to be pumped? A If there is a testing on site. They check at the plant what is the air content, they check at the pump, and they know how the concrete reacts to it.

Q All right. So testing on site. When you say "site", you mean the customer's site, the owner's site? A Yes. Q And who is responsible for that testing? A That would be the owner. [ 122 ] Dr. Czarnecki then went on to discuss what roles the owner, contractor and supplier have in testing the concrete on site. She testified that the owner or the owner’s consultant or representative specifies what type of testing should be completed.

She stated that if the air needed to be increased in the concrete that the contractor would let the supplier at the plant know about the problem with the hope of fixing it. [ 123 ] While R219 acknowledges the opinion of Dr. Czarnecki, it submits that it should not be faulted for its failure to test at the time the concrete was delivered to the site, as Ketchen expressly stated in the General Specifications that no site testing was required on the exterior slabs on grade.

Ketchen testified that the owner was entitled to rely on his direction. [ 124 ] In my opinion, this is a reasonable answer to OK Builders argument on this point. Although it was R219’s own expert who testified that testing of the concrete at the work site should be done in every case, and that she would have directed so in this case, R219’s engineer directed at the time of the work that site testing was not required, and I find that R219, whose principals were not experts in the field of concrete properties, was entitled to rely on this advice.

Moreover, Joe Pires testified that he placed and finished the concrete for the exterior slabs on grade knowing that no site testing was conducted and said that this, in his experience, is something that happens quite regularly. He also said that the absence of testing did not stop Pires from performing its work, and that this was the case on lots of jobs carried out by Pires.

It was of no concern to him, and he certainly did not raise the absence of testing with R219 as being a matter that it should be concerned about. [ 125 ] In my view, the evidence of the circumstances surrounding the failure by R219 to conduct testing at the time of the delivery of the concrete to the work site cannot operate to deny it a claim against OK Builders for its breach of agreement.

Did the characteristics of the concrete change after delivery, thus absolving OK Builders of liability? [ 126 ] There is no evidence to suggest that the characteristics of the concrete changed after its delivery to the worksite. There is no evidence that water was added to the concrete at the work site. Further, as pointed out in the submission of R219, although a pump and boom configuration can affect the level of air in concrete, one ought to expect a consistent application of that impact for concrete delivered on a given pour date, and here there is no such evidence.

I accept R219’s submission that the EBA tests showed inconsistency in the air levels meaning that it was the inconsistent concrete and not an extraneous factor that led to inadequate air levels. In her 2010 Report, Dr. Czarnecki states that the quality of concrete as delivered to the site was not consistent, the air content ranged from 2.3% to 13.7%, and the spacing factor ranged from 0.13 to 0.37. [ 127 ] As R219 submits, no record was produced by OK Builders of the actual levels of air-entrainment introduced by it. Mix designs 51526 and 51554 do not have a set level of air-entrainment.

Thus, given the absence of records from OK Builders, I agree with R219 that OK Builders cannot speculate about the nature of other factors, when it is not able to demonstrate what the air levels were when the concrete in issue left its plant. B. R219’s Claims Against Pires

Discussion [ 128 ] R219’s claim against Pires set out in paragraph 18 of these reasons includes allegations that Pires, in breach of its agreement with R219 failed to properly lay, finish and cure the exterior slabs on grade, more particularly that, inter alia , Pires chose the inappropriate specifications for the concrete; provided insufficient, inadequate or non-existent curing; and over-finished the concrete. [ 129 ] In the prior part of these reasons I have found that OK Builders was in breach of its agreement with R219 by supplying it with defective concrete that ultimately led to R219 sustaining damages, including the premature delamination, scaling and deterioration of the exterior slabs on grade. [ 130 ] In this section, I turn to whether R219 has proven that it had an agreement with Pires for the placing and finishing of the exterior slabs on grade, and whether Pires failed to properly provide certain services in relation to its work on the exterior slabs on grade. [ 131 ] R219 contends that there was an agreement between it and Pires for the placing and finishing of the concrete for the exterior slabs on grade based on the following points: (

a) there is no written agreement to which Pires is a party for any of its work on the exterior slabs on grade; (

b) Pires laid and finished all of the concrete on site for the benefit of R219; (

c) the original contact with Pires was Don Olsvik who had hired Pires for earlier work (both for the Falcon group of companies and personally); (

d) Joe Pires had no prior relationship with Bear Ridge or Barry Olsvik; he met Barry Olsvik for the first time on site at this project; (

e) Joe Pires, and not Barry Olsvik, was in charge of the laying and finishing activities, and supervision of the crew; (

f) Barry Olsvik did not

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