Metrowest Developments Ltd v Flynn Canada Ltd, 2022 ABKB 616

Court of King’s Bench of Alberta Citation: Metrowest Developments Ltd v Flynn Canada Ltd, 2022 ABKB 616 Date: Docket: 1601 02436 Registry: Calgary Between: Metrowest Developments Ltd. Plaintiff - and - Flynn Canada Ltd. Defendant _______________________________________________________ Reasons for Judgment of the Honourable Justice K.M. Horner _______________________________________________________ Introduction [ 1 ] Metrowest Developments Ltd. (Metrowest) owns a commercial building known as Deerfoot Square in Calgary, Alberta.

Metrowest, with the assistance of Read Jones Christoffersen (RJC), a consulting engineering firm, engaged Flynn Canada Ltd. (Flynn) for a partial roof replacement at the Deerfoot Square property. Metrowest and Flynn entered into a CCDC 2 Stipulated Price Contract (the Contract). Flynn completed the roof replacement between April and May 2013. [ 2 ] On top of the Deerfoot Square roof there are two large mechanical HVAC units, one on the north side and one on the south side.

While originally it was contemplated that both the north half and the south half of the Deerfoot Square roof would be replaced, ultimately the parties contracted solely for the roof replacement on the north half. For the purposes of this judgment, references to the HVAC unit or large mechanical unit mean the HVAC unit on top of the north side. Further, unless specified, references to the roof mean the north half of the Deerfoot Square roof. [ 3 ] A key issue in dispute between the parties is whether an addendum that modifies the scope of work, and in particular the

scope of work with respect to roofing under the HVAC unit, forms part of the Contract. Flynn says it does; Metrowest says it does not. [ 4 ] Metrowest submits that the addendum did not form part of the Contract, and thus did not modify the scope of work. It argues that the Contract required Flynn to remove all the existing roofing assembly, including the existing roofing beneath the HVAC unit. It submits that Flynn breached the Contract and negligently performed its work pursuant to the Contract.

Metrowest seeks damages for the removal and full roof replacement at Deerfoot Square, and costs incurred due to Flynn’s breaches of contract and negligence. [ 5 ] Flynn argues that the addendum was not listed in the Contract by mistake and submits that rectification is an appropriate remedy. Flynn submits that it performed its work in accordance with the Contract and in a nondeficient manner. It further argues that Metrowest has not suffered or proven any damages. Flynn seeks a dismissal of Metrowest’s action against it and judgment for the balance of the outstanding invoices owed to it by Metrowest.

Procedural Background [ 6 ] On June 28, 2013, Flynn registered a builder’s lien in the amount of $167,944.36 against the Deerfoot Square property. Metrowest then filed an Originating Application on August 7, 2013, disputing the validity and quantum of the lien and for counter- claims for set-off for deficiencies, damages and environmental liability.

On August 8, 2013, Master Prowse ordered $217,944.26 to be paid into court, representing the Respondent’s value of the lien plus $50,000.00 for security for costs. [ 7 ] On April 7, 2014, Flynn filed a Statement of Claim against Metrowest for payment of amounts owing pursuant to the Contract (the 2014 Action). [ 8 ] On June 2, 2014, Metrowest filed a Statement of Defence alleging that Flynn was responsible for damages relating to two negligent workplace incidents, seeking dismissal of Flynn’s claim, or in the alternative, a set-off against Flynn’s claim in the amount of $49,326.00. [ 9 ] On December 1, 2014, Flynn was granted partial

summary judgment against Metrowest in the amount of $71,020.41, plus pre-judgment interest and costs pursuant to Column 2 of

Schedule C, amounting to a total of $78,620.41. Master Hanebury directed the said amount to be paid to Flynn from the funds in court, with the balance of the lien security to remain in court pending determination of the 2014 Action. The 2014 Action continued in relation to the disputed balance of the claim alleged by Flynn against Metrowest. [ 10 ] On February 22, 2016, Metrowest amended its Statement of Defence in the 2014 Action to include allegations for breach of contract and negligent performance of the work under the Contract.

Metrowest further amended the Statement of Defence to include a declaration that Metrowest had suffered damages in the amount of $281,000.00, or in the alternative, a set-off against the whole of Flynn’s claim to reflect the damage suffered by Metrowest. [ 11 ] On February 18, 2016, Metrowest filed a Statement of Claim against Flynn for breach of contract and negligence (the 2016 Action).

An Amended Statement of Claim was filed January 16, 2017, seeking judgment or damages in an amount of no less than $291,000.00. [ 12 ] The 2014 Action and the 2016 Action were consolidated by consent on October 20, 2017, with Metrowest as Plaintiff and Flynn as Defendant (the Consent Order).

The Consent Order provided that while Flynn was not required to file a Statement of Defence, should it elect to do so the deadline was November 3, 2017. [ 13 ] The trial commenced March 12, 2018. [ 14 ] At the start of trial, Flynn brought a preliminary application to extend the time outlined in the Consent Order for filing a Statement of Defence in the 2016 Action. I granted the application for Flynn to file its Statement of Defence in accordance with rule 13.5 of the Alberta Rules of Court and this court’s direction on filing extensions in Condominium Corporation 9813678 v Statesman Corp , 2008 ABQB 495 .

I granted costs against Flynn with the quantum to be addressed at the conclusion of this trial. Factual Background and Evidence Metrowest and Deerfoot Square [ 15 ] Metrowest was founded by William Schwartz. Elaine Myron, Schwartz’s daughter, has been the president and managing director of Metrowest since 2003. She generally oversees the day-to-day issues with the company, including leasing, and she calls in trades as necessary for maintenance and or repairs.

Before this, she worked part-time doing residential property management for three apartment buildings and some leasing. [ 16 ] Deerfoot Square is three stories and was built in 1981. It contains approximately 30,000 square feet of leasable commercial space. There is one long-term tenant in the building, the Alberta Department of Environment and Parks. [ 17 ] The approximately 12,000 square foot roof is a flat roof with a concrete slab base. The roof is split into two sections, a north side and a south side by an expansion joint. There are two HVAC units on top of the roof, as noted.

Each HVAC unit sits on top of two support sleepers that run parallel to it. [ 18 ] In 2001, the roof was replaced, right down to the concrete slab with a Built-Up-Roofing-System (BUR System). [ 19 ] Mrs. Myron testified that in 2009 new HVAC units were needed. Metrowest engaged RJC, who issued a report in December

2009 recommending the BUR System roof be replaced with an SBS Modified Bitumen Torch Applied Membrane. New HVAC units were installed, one on each of the north and south caps of the roof. Only the portion of roof beneath the new HVAC units was replaced; the rest of the existing roof at the time was left in place. November 2012 [ 20 ] Mrs. Myron testified that in November 2012 there were complaints of water leaking into the building. She observed these water leaks. [ 21 ] Metrowest engaged Skyline Roofing Ltd. (Skyline) to investigate the north side of the roof.

Phillip Parker, an engineer with RJC who has significant experience with roof evaluations and roof replacement projects, testified that in November 2012, he received a call from Mrs. Myron indicating she was having challenges with the roof at Deerfoot Square and that a crew from Skyline was on site trying to diagnose the problem and or affect repairs. Mr. Parker testified that Mrs. Myron asked him to attend on site and make his own observations. Roger Hanks of Skyline performed a series of cut tests to determine the location of the leak in the roofing system. Mr.

Hanks was not called as a witness at trial. [ 22 ] On November 17, 2012, Mr. Hanks emailed Mrs. Myron and Mr. Parker and indicated that the insulation close to the split buckle near the control/expansion joint on the north side of the HVAC unit was “saturated”. Mr. Hanks’ email recommended replacement of the roof system and removal and replacement of the areas of wet insulation. He attached a sketch to his email indicating where the 24 cut tests were performed and the approximate area where water had penetrated the roofing system, with the caveat that water may extend outside his indicated area.

No cut test was performed beneath the HVAC unit. Mr. Hanks’ email stated that there was water in varying amounts, and at cut test 23, between the sleepers “the hydrostatic pressure was high enough that water in the system rose above the membrane.” [ 23 ] Mr. Parker concurred with Hank’s assessment that there was likely water getting into the membrane, but he was not aware of any water underneath the HVAC unit. He testified that while water in the system may extend outside of the area marked on Mr. Hanks’ sketch, there was no evidence to indicate that the water actually had gone any further. [ 24 ] Mr.

Parker testified that he could not recall seeing water physically welling up at cut test 23. He stated that because personnel were moving around on the roof, their own weight puts additional pressure on the insulation and can change its behaviour. He testified that as the core hole was being cut, the personnel standing on the roof provide a surcharge and increase the hydrostatic pressure artificially by their presence. Mr. Parker stated that he did not disagree with Mr.

Hank’s observation regarding the hydrostatic pressure, but that he did not “necessarily take an awful lot of umbrage with the observation.” [ 25 ] With regard to Mr. Hanks’ observations of split buckles and his observation that the insulation was “saturated”, Mr. Parker testified under cross-examination that he understood Mr. Hanks to be using the term “saturated” in its common sense meaning – that there is a considerable body of water in the insulation.

He testified that while he could not say whether the insulation was “saturated” in terms of its scientific meaning of the word, he agreed that it was really wet. [ 26 ] In an email to Mrs. Myron on November 20, 2012, Mr. Parker recommended at a minimum to replace the north half of the roof east of the expansion joints, with a conventional two-ply torch on membrane assembly. He recommended that pricing be obtained for the south half of the roof given that both north and south sides were similar. Mrs. Myron’s reply directed Mr.

Parker to get designs and quotes for both the north and south sides of the roof and inquired whether any of the HVAC units would need to be removed. Mr. Parker did not specifically respond to Mrs. Myron’s inquiry regarding the removal of the HVAC units. He testified at trial that the addendum responded to her inquiry. [ 27 ] While Mrs. Myron testified that she understood there to be water beneath the HVAC unit and probably under the sleepers, she admitted under cross examination that she was never on the roof at any material time; she had no personal knowledge of whether the insulation was wet.

RJC Retained by Metrowest [ 28 ] Metrowest retained RJC as its consulting engineer for the roof replacement project at Deerfoot Square after Skyline’s inspection in November 2012. The Engineering Services Proposal dated December 17, 2012, and entered as an exhibit at trial stipulated RJC’s scope of work in providing consulting engineering services to Metrowest in support of the planned roof replacement.

The scope of work included preparing the designs for the new roof assembly, tendering the project on behalf of Metrowest to the list of invited qualified roofing contractors, reviewing contractor queries, issuing addenda and assistance in reviewing bid submissions, and generally overseeing the work by the selected contractor. Mr. Parker testified that he was responsible for the design of the new roof assembly. Tendering and Bidding for Deerfoot Square Roof Replacement [ 29 ] RJC on behalf of Metrowest, commenced the tendering process in accordance with the Engineering Services Proposal. Mr.

Parker and Amanda Wojda, a restoration and building science technologist with RJC, prepared the tender package and delivered it to the three contractors invited to bid on this project – Flynn, Skyline and Tru-Craft. Ultimately, only Flynn and Skyline submitted bids. [ 30 ] While the initial tender package referenced in its table of contents two drawings labelled SK-1 – General Notes and Roof Plan and SK-2 – Sections and Typical Details, these two drawings should have been labelled as R1 and R2. Ms. Wojda testified that this was a typographical error in the initial tender package.

R-1 – General Notes and Roof Plan comprises both the north and south caps of the Deerfoot Square Roof. Both R1 and R2 are dated January 2013. As such, the bidding contractors were invited to bid on the roof replacement for the entire roof, meaning both the north and south caps.

[ 31 ] On March 7, 2013, there was a pre-tender closing site meeting. The contractors intending to bid on the project were invited to a site meeting to inspect the site, take measurements and tests prior to completing their tender. Flynn, Tru-Craft, Skyline, Mrs. Myron, Ms. Wojda and Mr. Parker were in attendance. Mr. Parker testified that concerns arose about removing the HVAC unit from the roof. Following this meeting, Mr. Parker and Ms. Wojda discussed strategies and designs for dealing with that concern, which led to the development of Addendum 1 and Detail 1/SK-1.

I note that the terms Addenda 1 and Addendum 1 are used interchangeably in some of the correspondence at trial. [ 32 ] Addendum 1 provides the following: ADDENDA .1 The addenda listed below was issued prior to the signing of the Agreement and thus will be included in the General Contractor/Owner Agreement and will become part of the Contract. This addenda has been included as part of this specification

Section 00 91 13. 2. Clarifications 1. Curb to be installed at mechanical unit to facilitate roofing without removing mechanical unit. Curb is to be tied into existing roof under mechanical unit and to existing mechanical support sleepers. 2. Scupper drainage system to be installed in curb to allow for drainage of roof assembly under mechanical unit. Slope insulation to drain moisture away from curb minimum 1%. DRAWINGS .1 Detail 1/SK-1 is provided for addenda noted above. [ 33 ] SK-1 is a sketch dated March 12, 2013 titled Typical Control Joint at Mechanical Unit.

The sketch has various notes on it, including one in the top corner that states “Existing mechanical unit to say in place.” [ 34 ] Ms. Wojda distributed Addendum 1 to the bidding contractors via email on March 12, 2013 at 4:52 p.m. Both Mrs. Myron and Mr. Parker were copied on this email: Good Afternoon, Please find attached Addenda 1 as per our meeting last week. Please feel free to call if there are any questions or concerns regarding the above. Regards, Amanda Wojda [ 35 ] Flynn and Skyline submitted bids by the closing on March 21, 2013. At 10:11 AM on March 22, 2013, Ms. Wojda sent Mrs.

Myron an email enclosing a bid review letter that attached the bid submissions from Skyline and Flynn, and indicating that a hard copy had been mailed to Mrs. Myron for her records. The bids of both Flynn and Skyline reference Addendum 1. [ 36 ] Flynn’s bid at page 1 says: Having examined the Project site, and having carefully examined the General Conditions of the General Contract – CCDC2 – 2008 as amended by

Section 00 73 00, Supplementary Conditions, the Specifications and Drawings, including Addenda 1 to 1 issued as supplements thereto... [ 37 ] Skyline’s bid at page 1 says: Having examined the Project site, and having carefully examined the General Conditions of the General Contract – CCDC2 – 2008, as amended by

Section 00 73 00, Supplementary Conditions, the Specifications and Drawings, including Addenda One to N/A issued as supplements thereto... [ 38 ] Gary Playsted, Flynn’s roofing manager at the time and whose duties and responsibilities included overseeing the roofing department and the day-to-day operations regarding tendering procurement on site matters, testified that Addendum 1 would have been part of the documents used by Flynn to prepare their quote/estimate and their tender price.

He further testified that Addendum 1 factored into the bid submitted by Flynn because it gives them instructions on how to facilitate the work around the HVAC unit and provides a sketch of the detailing of the work. His evidence was that he understood that Addendum 1 was encompassed in the work of the contract for the successful bidder, and that it became part of the scope of the work under the Contract. [ 39 ] Mr. Parker, Ms. Wojda and Mr.

Playsted testified that Addendum 1 was not cancelled or withdrawn between the time it was issued until the time the tenders were received from Flynn and Skyline on March 21, 2013. They also confirmed that it was not cancelled or withdrawn at any time between receiving the bids and when Mr. Playsted or Mrs. Myron signed the Contract on April 4 and April 11, 2013, respectively. [ 40 ] On March 22, 2013 at 11:40 AM, Mrs. Myron responded to Ms. Wojda’s email, seeking the following: Amanda, Please confirm that both contractors have bid as per the RJC requirements.

Please send me the drawings of the areas that will be replaced and your recommendation as to which company to use. Please confirm that the insulation that was / is wet under the large mechanical units will be replaced and any other areas that need to be replaced on the new roof due to the water seeping under the new roof areas. ... Thank you Elaine [ 41 ] On March 22, 2013 at 1:44 PM, Ms. Wojda replied to Mrs. Myron, advising as follows: Good afternoon Elaine, Skyline has an addition error in their bid, but both have met the requirements.

Please find the drawings attached to this email as well as the spec package and addenda for the project . The intent is to replace the whole roof; however both bids do list separate prices for a phase 1 and phase 2 as indicated on the drawings. Under the mechanical units will not be replaced as the cost associated with removing the large mechanical units to facilitate the work is significant. The intent is to box them in and add a scupper for drainage if for some reason moisture was to make its way to those areas. We are waiting to hear back from the contractors on the dates and will let you know when we know.

Regards, Amanda [Emphasis added] [ 42 ] Mrs. Myron testified at trial that the reference to phase 1 and phase 2 above in Ms. Wojda’s email referred to the north and south sections, respectively. Her evidence was that the bid package was to remove and replace the entire roof at Deerfoot Square, i.e. both the north and south caps, and separate prices were listed by the bidding contractors in their bids. [ 43 ] On March 22, 2013 at 2:11 PM, Mrs. Myron replied to Ms. Wojda, as follows: Skyline already confirmed that the insulation has become wet under the large mechanical units when the leak first became known .

What I understood is that there is room to actually remove the wet insulation under the hvac units and replace with new without removing the units, not just put a scupper there for drainage. Is this the plan? Please explain the process. I am confused as to why there is a quote on the whole roof when the roof under the hvac units was completed a few years ago. I cannot tell on the drawings where phase one or two is please outline clearly on the drawing phase one and phase two and what phase is under the hvac units.

I would like to know why we have this pricing for under the Hvac units if you say the roof under the Hvac units will not be replaced? ... Thank-you Elaine [Emphasis added] [ 44 ] On April 1, 2013 at 5:33 PM, Mrs. Myron emailed Ms. Wojda and Mr. Parker as follows: Amanda, Please send me the drawings by courier tomorrow as requested below and the confirmation by email that the insulation that was / is wet under the large mechanical units will be replaced and any other areas that need to be replaced on the new roof due to the water seeping under the new roof areas.

Also, please send me a copy of the work and the drawing/plan that has been completed by skyline earlier in about 2006-7. ... Elaine [Emphasis added] [ 45 ] The emails from March 22, 2013 make it clear that Mrs. Myron had been provided with Addendum 1, and understood that wet insulation under the HVAC unit would be replaced. [ 46 ] On April 2, 2013 at 8:23 AM, Mr. Parker responded to Mrs. Myron as follows:

Elaine: I can confirm that the project will proceed as you have outlined. 1. All wet or otherwise compromised roofing and insulation will be replaced including the insulation beneath the new mechanical unit. 2. The work associated with Price 2 for the other half of the roof will only be authorized by you. Such authorization would be contingent on RJC confirming that the increase in scope was necessary due to irreparable deficiencies or moisture ingress in Roof Area 2. When Flynn are on site we will conduct additional investigation into Roof Area 2 and provide you with the report.

With respect to the work completed previously by Skyline, attached is what I was able to retrieve from our files. Updated drawings will be couriered to your office. One we have prepared the CCDC Contracts we will have Flynn execute them and then send them to your office for your review and execution. Regards, Philip Parker [Emphasis added] [ 47 ] Under cross-examination, when asked what he meant by ‘beneath’ in his April 2 nd email, Mr.

Parker testified as follows I meant that all of the wet or otherwise compromised roofing and insulation, including any that we may have found underneath the mechanical unit, would be replaced. So we removed all of the wet and compromised insulation. There was dry and uncompromised insulation under the mechanical unit that was left in place. [ 48 ] Mr. Parker stated that this was consistent with what was shown in sketch SK1 attached to Addendum 1. When Mr. Parker was pressed on cross-examination as to whether his evidence was inconsistent with the note on SK1 that says the HVAC unit would remain in place, Mr.

Parker advised that it was not. He testified that there is simply not enough height to put a worker beneath the HVAC unit, but that they can remove the insulation using polesaws and rakes and can extend underneath the unit to remove and replace the wet insulation. [ 49 ] The Contract’s effective date was April 4, 2013. The Contract was signed by Gary Playsted of Flynn on April 4, 2013. Mr.

Playsted testified that he did not notice that Addendum 1 was not listed at the time he signed the Contract. [ 50 ] While it was originally contemplated by Metrowest that the entire roof would be replaced at Deerfoot Square, i.e. both the north and south sides, ultimately Metrowest chose not to replace the south half. Mrs. Myron testified that while the drawings R-1 and R- 2 referenced in

Article A-3 Contract Documents encompassed and contemplated Flynn replacing both the north and south sides, and that Flynn’s bid included prices for both halves, the scope of work was reduced to only the north side replacement. Mrs. Myron begrudingly acknowledged under cross-examination that arrangements were made between herself and RJC via email to remove the south side replacement from the scope of work under the Contract. Reluctantly, she admitted that there is no reference in the Contract reducing the scope of work to only the north cap and removing the south cap. Mr.

Playsted also testified that there is no reference in the Contract that Flynn is only to re-roof the north half of R-1. The evidence is clear that the Contract does not reflect this reduction in the scope of work. April 5, 2013 Start-up Meeting, Notice of Proposed Change Order and Mrs. Myron’s Signing of the CCDC 2 Contract [ 51 ] On April 5, 2015, a start-up meeting took place at Deerfoot Square. Mrs. Myron, Ms. Wojda, Mr. Parker, and individuals from Flynn, including Brian McCaghren (the foreman on the Deerfoot Square project) attended.

At this meeting, one of Flynn’s employees Nick Murphy proposed leaving the existing vapour barrier in place and adding a hot mop vapour barrier over top of the existing vapour barrier. [ 52 ] Following the meeting, on April 5, 2013 at 3:40 PM Mrs. Myron emailed Ms. Wojda and Mr. Parker as follows: Amanda, ... As discussed, please ensure that the labor for the change order that Flynn had brought to our attention today will be looked at for the cost of labor to remove what was in the contract to changing the scope and putting the new material over the existing.

I want to ensure that the cost of the labour to remove the old roofing material will be deducted from the cost as it would be less labour intensive to just put down the new material over old rather than removing the old material. Flynn stated that this removal was very labor intensive and “impossible to do, as it comes off in small pieces”. ... Please confirm to me that the removal and the scope of the work that RJC spec’d that Flynn contracted to do, cannot actually be completed on the roof and that the change will be agreed to by RJC and will be still under the full roof warranty.

If this is correct, please let me know the cost savings for this change order. ...

Thank-you Elaine [ 53 ] Mr. Parker responded approximately an hour and a half later, indicating that “any changes to the project will be reviewed by RJC and from a technical standpoint must be acceptable to us and that they would not permit any changes that put the warranty in jeopardy. He further indicated that RJC would issue a Notice of Proposed Change (NOPC) to Flynn. [ 54 ] On the morning of April 6, 2013, Mrs. Myron responded to Parker’s email, requesting that other roofing companies quote the change.

She also wrote “I also find this change casually mentioned by Flynn yesterday in the meeting not just unprofessional but unethical and I cannot now condone and accept this change order by Flynn after they had signed the contract to do the work that was specified by Rjc”. On April 8, 2013 at 9:22 AM, Ms. Myron forwarded this email to Ms. Wojda, copying Mr. Parker. [ 55 ] On April 8, 2013 at 11:59 AM, RJC sent NOPC 1 to Flynn to provide pricing/credit on their proposal to leave the existing vapour barrier and add a hot mop vapour barrier on top of the existing vapour barrier. At 12:06 PM, Mrs. Myron emailed Ms.

Wojda and Mr. Parker to reject this NOPC. In her email she wrote: Amanda, Please read the attached email to Phillip that I sent him on Saturday as well as to you this morning. I will not accept Flynn as the roofer to do any work on the government building, so this change order will not be agreed to as per my earlier emails. Please have other roofing companies, Skyline and truecraft, quote if you feel this change is the only acceptable way to complete the roof now, which is contrary to the RJC specs given to Flynn and to Skyline. Thank-you Elaine [ 56 ] Later that same day at 1:39 PM, Mr. Parker emailed Mrs.

Myron, confirming that he had spoken with Mr. Playsted who confirmed Flynn would complete the roof as originally specified, and advising Mrs. Myron to proceed with Flynn. [ 57 ] Mrs. Myron testified that her concern in the April 5 th email was that Flynn said they were not going to do the work as per the Contract, and that she wanted to know that if Flynn was not going to do the work as per the Contract, that she would at least get a credit for the vapour barrier not being removed. Mrs. Myron further testified that she was not happy with Mr.

Parker’s response, and confirmed that NOPC 1 was not approved by Metrowest. In my view, it appears that one of the reasons Mrs. Myron rejected NOPC 1 was because of the manner in which it was brought up by a Flynn employee at the start-up meeting; in her view it was “unprofessional” and “unethical”. She further seems very focused on Flynn performing the Contract exactly as specified, yet through email correspondence with RJC and without any reference in the Contract reduced Flynn’s scope of work to only one half of what was originally contemplated.

In essence, she is then at the same time asking Flynn not to perform the work as the Contract specifies. [ 58 ] When Mr. Parker was asked regarding NOPC 1 at trial, he stated “Well, that was an episode”. Mr. Parker testified that at the April 5, 2013 start up meeting, one of Flynn’s representatives made “an ill-timed, inappropriate, poor venue proposal to leave the existing vapour barrier on the roof assembly.” Mr. Parker testified that he prepared NOPC 1 so as to present the proposal in the appropriate manner.

He confirmed that NOPC 1 was not approved, and that RJC’s instructions to Flynn were to proceed as per the specifications, which included Addendum 1. [ 59 ] On April 11, 2013, Mrs. Myron sent an email to Mr. Parker stating: I have received the CCDC 2 contract to sign for deerfoot square, please confirm that the contract has no changes, as per our discussions and that the change order attached will not go ahead. Please confirm that the work noted in this contract is as per the original RJC specs quoted and signed off by Flynn Canada Ltd. [ 60 ] Mr.

Parker responded approximately two hours later stating “Elaine: the contract cannot be changed in any way without your signature to authorize such a change – so to date there are no changes. Notice of Proposed Change #1 is withdrawn. Specifications for the work remain unchanged at this time.” Mr. Parker testified that the reference in his email to “the specifications for work remain unchanged” included reference to the Addendum 1.

His evidence was that the work noted in the Contract as per the original RJC specs that were quoted and signed off by Flynn, included Addendum 1 because Flynn included Addendum 1 and noted it in their bid form. Mrs. Myron responded to Mr. Parker’s email indicating that “Two signed contracts will be couriered to Amanda today.” [ 61 ] Mrs. Myron signed the Contract on April 11, 2013. [ 62 ] Flynn commenced work April 10, 2013. On May 23, 2013, Mr. Playsted signed the Certificate of Substantial Performance.

He testified that he was certifying that Flynn’s work was performed in accordance with the satisfaction of the owner’s engineer. Issues [ 63 ] The issues are: 1. Does Addendum 1 form part of the Contract? Is Flynn entitled to the remedy of

rectification due to mistake? 2. Was Flynn in breach of the Contract or negligent? 3. What damages, if any, are payable to Metrowest? 4. Is Flynn entitled to the balance of its outstanding invoices? Positions of the Parties i. Metrowest’s Position [ 64 ] Metrowest argues that Flynn did not install the roof in compliance with the specifications set out in the Contract. Metrowest takes the position that there was no mistake about the terms of the Contract; Addendum 1 was not part of the Contract, and Flynn should not be entitled to the remedy of rectification.

Metrowest submits that the Contract required the removal of all existing roofing materials, which included removal of materials beneath the HVAC unit. [ 65 ] Metrowest argues that Flynn installed a fundamentally deficient and flawed roof such that only complete removal and replacement is appropriate.

Relying on its expert evidence, Metrowest submits that the lack of adhesion between the roofing layers or to the concrete slab results in a risk of premature failure and deterioration, leakage issues and a risk of the roof potentially flying off during strong winds. [ 66 ] Metrowest argues that Flynn breached the Contract, and that the evidence at trial demonstrates that the roofing system at Deerfoot Square has numerous defects in its material installation and performance.

Metrowest focused its argument on three aspects: 1) the installation; 2) the non-removal of the roofing material under the HVAC unit; and 3) the curbing in of the HVAC. Metrowest’s position is that due to these breaches, the roofing system must be completely removed and replaced to prevent further damage and to avoid the risk of a potentially catastrophic failure of the roofing system. [ 67 ] Metrowest argues that Flynn was negligent because it failed to act as a competent and careful builder would as Flynn (

a) failed to comply with the design intent of the Contract; (

b) failed to conduct moisture readings; (

c) installed a defective roof that is at risk of water ingress, premature failure and deterioration, a reduction in lifespan, or a “complete cataclysmic event”; (

d) followed roofing methods which caused or will cause substantial damage to Deerfoot Square and the HVAC unit; (

e) used materials not in compliance with the Manufacturers’ specifications which could nullify Metrowest’s entitlement to the 10-year manufacturers’ warranty; and (

f) installed a roof that is failing prematurely and requires replacement before the end of its natural lifespan. [ 68 ] Metrowest submits that it should receive damages for a complete replacement roof, plus a 15% contingency allowance and the amount for required engineering costs. Metrowest submits that the cost of a new roofing system is estimated at $451,012.58. [ 69 ] Metrowest takes the position that Deerfoot Square has diminished in value as a result of the defective roof installed by Flynn.

It argues that because of the diminished value, and the additional costs incurred by Metrowest as a result of Flynn’s deficient installation, Flynn’s claim for payment of outstanding invoices should be dismissed, or alternatively, only ordered to be paid contingent upon the delivery of a valid 10-year systems warranty.

Metrowest further claims for the costs incurred as a result of two incidents that occurred during Flynn’s roof installation in April and May 2013, being a hydraulic fluid spill and a roofing material fly off event. [ 70 ] Metrowest claims that the diminution in the value of the property is estimated at $451,012.58. It estimates the costs incurred because of Flynn’s negligence amounts to $26,970.50. ii. Flynn’s Position [ 71 ] Flynn submits that it was a mistake that Addendum 1 was not included in the formal written Contract.

It submits that the Contract should be rectified to include the scope of work referred to in Addendum 1. Flynn argues that the evidence demonstrates that Metrowest knew Addendum 1 was part of the Contract, and is trying to take advantage of an oversight. [ 72 ] Flynn submits that it performed the work in accordance with the Contract. It denies that its work was deficient. Flynn states that the Deerfoot Square roof does not leak, no repairs have been made and it has not blown off.

Flynn relies on the evidence that there had never been a leak in the roofing system in the five and a half year period between the roof completion and the end of trial. Despite significant wind storms during that time frame, there had never been a roof blow-off event. Flynn further submits that during that same time frame, Metrowest did not take any remedial steps to replace the roof despite its allegations of deficient work by Flynn and its alleged concern of the risk of the roof blowing off.

It is Flynn’s position that Metrowest has failed to establish that there are any significant deficiencies that justify the claim for an entire roof replacement. Flynn argues that Metrowest has neither suffered nor proven any damages. [ 73 ] Flynn argues that it is entitled to the balance of outstanding invoices owed by Metrowest to Flynn, in the amount of $98,923.94, being the principal amount owing from the 2013 invoices, plus pre-judgment interest at the contractual interest rate.

In the alternative, Flynn seeks judgment in the amount above, less the sum of $60,000.00, which is a reasonable amount to provide for an alternative ballasting methodology to address any deficiencies.

Credibility [ 74 ] Before moving into my analysis of the issues, I find it necessary to comment on credibility, and in particular, the credibility of Mrs. Myron. [ 75 ] The Supreme Court of Canada in FH v McDougall, 2008 SCC 53 , confirmed that the proof in civil cases is balance of probabilities. It confirmed that a judge should be mindful of inherent probabilities and improbabilities. Evidence must always be clear, convincing and cogent to satisfy the balance of probabilities test. Testimony must not be considered in isolation, but rather examined based upon the totality of the evidence.

The impact of inconsistencies on questions of credibility and reliability must be assessed. [ 76 ] The witnesses in this trial were credible and reliable. However, I do not find the same applies to Mrs. Myron. While under direct examination, Mrs. Myron generally had a good recall and was forthcoming with her answers. She was compliant with counsel and provided fulsome answers where the information was in her favour. However, under cross-examination, Mrs. Myron was evasive and at times, approaching argumentative. She frequently did not recall information that she had under direct examination.

She evaded answering even simple questions asked by Flynn’s counsel. It gave me the impression that where an answer may help her case, she was forthcoming, however where an answer could be seen to hinder her position, Mrs. Myron was not. [ 77 ] This tainted Mrs. Myron’s evidence. It impacted the weight of what she had to say. I find that her evidence where it conflicts with other witnesses was generally unreliable. Issue 1: Does Addendum 1 form part of the Contract? [ 78 ] Flynn argues that basic contract

interpretation principles considering the factual matrix, and in particular the email correspondence between Metrowest and RJC, establish that Addendum 1 forms part of the Contract. Flynn submits that the evidence demonstrates that it was an oversight that Addendum 1 was not listed in the written Contract. Flynn seeks rectification based on mutual mistake, or in the alternative, unilateral mistake, although unilateral mistake is not specifically plead in its Statement of Defence. [ 79 ] Metrowest argues that Addendum 1 is not part of the Contract. It relies in part on the “entire agreement” clause. A.

Relevant Terms of the Contract [ 80 ] The following provisions of the Contract are relevant to the issue of mistake and rectification:

ARTICLE A-1 THE WORK The Contractor shall: 1.1 perform the Work required by the Contract Documents for Deerfoot Square Roof replacement located at 2938 – 11 Street NE Calgary, AB for which the Agreement has been signed by the parties, and for which Read Jones Christoffersen Ltd. Is acting as and is hereinafter called the “ Consultant ” and 1.2 do and fulfill everything indicated by the Contract Documents...

ARTICLE A-2 AGREEMENTS AND AMENDMENTS 2.1 The Contract supersedes all prior negotiations, representations or agreements, either written or oral, relating in any manner to the Work , including the bidding documents that are not expressly listed in

Article A-3 of the Agreement – CONTRACT DOCUMENTS.

ARTICLE A-3 CONTRACT DOCUMENTS 3.1 The following are the Contract Documents referred to in

Article A-1 of the Agreement – THE WORK: - Agreement between Owner and Contractor -

Definitions - The General Conditions of the Stipulated Price Contract * Specification

Section Name Page 00 73 00 Supplementary Conditions 9 01 10 01 General Requirements 8 01 78 36 Warranties and Bonds 2 06 10 00 Rough Carpentry 4 07 53 52 Modified Bitumen Membrane Roofing 12 07 62 00 Metal Flashing and Trim 4 Drawing Date

R-1 General Notes and Roof Plan January 2013 R-2 Typical Sections and Details January 2013 * (Insert here, attaching additional pages if required, a list identifying all other Contract Documents e.g. supplementary conditions; information documents; specifications, giving a list of contents with

section numbers and titles, number of pages and date; material finishing schedules, drawings, giving drawing number, title, date, registration date or mark; addenda, giving title, number, date) [ 81 ] Addendum 1 is not listed under

Article 3- Contract Documents,

section 3.1 of the Contract. B. General Principles regarding Contract

Interpretation [ 82 ] A CCDC 2 contract is a standard form commercial contract that governs process; the parties negotiate substantive terms: ASC (AB) Facility Inc v Man-Shield (Alta) Construction , 2018 ABQB 130 at para 11 [ ASC ] . It was developed with significant industry input. The CCDC 2 should be read as a whole while keeping in mind the surrounding circumstances such as the purpose of the agreement, the nature of the relationship it creates, and the industry in which it was executed: ASC at para 12 , citing Creston Moly Corp v Sattva Capital Corp , 2014 SCC 53 [ Sattva ] at paras 47 , 48. [ 83 ] Contract

interpretation requires a practical, common-sense approach; the overriding concern is to determine the intent of the parties and the scope of their understanding. A decision-maker must read the contract as a whole, consistent with the surrounding circumstances known to the parties at the time of formation of the contract: Sattva at para 47 . [ 84 ] An examination of the surrounding circumstances deepens a decision-maker’s understanding of the mutual and objective intentions of the parties as expressed in the words of the contract: Sattva at para 57 .

It should consist only of objective evidence of the background facts at the time of the execution of the contract – facts known or facts that reasonably ought to have been known to both the parties at or before the date of contracting: Sattva at paras 58, 60 . [ 85 ] Surrounding circumstances includes “absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man”.

Whether something was or reasonably ought to have been within the common knowledge of the parties at the time of execution of the contract is a question of fact: Sattva at para 58 . [ 86 ] The Alberta Court of Appeal in IFP Technologies (Canada) Inc v EnCana Midstream and Marketing , 2017 ABCA 157 [ IFP ] , reiterated the principles of contractual

interpretation as set out in Sattva , and highlighted the requirement to consider the factual matrix.

At paragraph 80, Chief Justice Fraser stated that the courts ought to “have regard for the surrounding circumstances of the contract – often referred to as the factual matrix – when interpreting a written contract” because “ascertaining contractual intention can be difficult when looking at words on their own, because words alone do not have an immutable or absolute meaning”: IFP at para 80 , citing Sattva at paras 46, 47 . [ 87 ] In IFP , Chief Justice Fraser wrote: 81 Therefore, while the factual matrix cannot be used to craft a new agreement, a trial judge must consider it to ensure the written words of the contract are not looked at in isolation or divorced from the background context against which the words were chosen.

The goal is to deepen the trial judge’s understanding of the mutual and objective intentions of the parties as expressed in the words of the contract.

This approach is in keeping with Lord Steyn’s famous admonition in Regina v Secretary of State for the Home Department, Ex Parte Daly , [2001] UKHL 26 at para 28 that “[i]n law context is everything”. 82 Thus, in interpreting a contract, a trial judge must consider the relevant surrounding circumstances even in the absence of ambiguity. [citations omitted] [ 88 ] Written evidence of negotiations is far more objective evidence of the parties’ intentions then after the fact evidence from opposing parties about oral statements made during negotiations: IFP at para 85 .

In addition, commercial contracts should be interpreted in accordance with sound commercial principles and good business sense; courts should not interpret a contract in a way that yields an unrealistic or absurd result: IFP at para 88 , affirmed in ASC at para 13 . C. Authority and Role of the Consultant under the CCDC 2 Contract [ 89 ] The following provisions outline the authority and role of the consultant pursuant to the Contract:

PART 2 ADMINISTRATION OF THE CONTRACT GC 2.1 AUTHORITY OF THE CONSULTANT 2.1.1 The Consultant will have authority to act on behalf of the Owner only to the extent provided in the Contract Documents , unless otherwise modified by written agreement as provided in paragraph 2.1.2. 2.1.2 The duties, responsibilities and limitations of authority of the Consultant as set forth in the Contract Documents shall be modified or extended only with the written consent of the Owner , the Contractor and the Consultant . ... GC 2.2 ROLE OF THE CONSULTANT 2.2.1 The Consultant will provide administration of the Contract as described in the Contract Documents .

2.2.2 The Consultant will visit the Place of Work at intervals appropriate to the progress of construction to become familiar with the progress and quality of the work and to determine if the work is proceeding in general conformity with the Contract Documents . ... 2.2.6 The Consultant will not be responsible for and will not have control, charge or supervision of construction means, methods, techniques, sequences or procedures, or for safety precautions and programs required in connection with the Work in accordance with applicable construction safety legislation, other regulations or general construction practice.

The Consultant will not be responsible for the Contractor’s failure to carry out the Work in accordance with the Contract Documents . The Consultant will not have control over, charge of or be responsible for the acts or omissions of the Contractor , Subcontractor , Suppliers , or their agents, or any other persons performing portion of the Work . ... 2.2.13 During the progress of the Work the Consultant will furnish Supplemental Instructions to the Contractor with reasonable promptness or in accordance with a

schedule for such instructions agreed to by the Consultant and the Contractor . ... 2.2.15 The Consultant will prepare Change Orders and Change Directives as provided in GC 6.2 – CHANGE ORDERS and GC 6.3 – CHANGE DIRECTIVE. ... 2.2.17 All certificates by the Consultant will be to the best of the Consultant ’s knowledge, information and belief. By issuing any certificate, the Consultant does not guarantee the Work is correct or complete. [ 90 ] Contract Documents are defined in the Contract as consist[ing] of those documents listed in

Article A-3 of the Agreement – CONTRACT DOCUMENTS and amendments agreed upon between the parties. [ 91 ] Change Directive is defined in the Contract as a written instruction prepared by the Consultant and signed by the Owner directing the Contractor to proceed with a change in the Work within the general scope of the Contract Documents prior to the Owner and the Contractor agreeing upon adjustments in the Contract Price and the Contract Time . [ 92 ] Change Order is defined in the Contract as a written amendment to the Contract prepared by the Consultant and signed by the Owner and the Contractor stating their agreement upon a change in the Work ; the method of adjustment or the amount of the adjustment in the Contract Price , if any; and the extent of the adjustment in the Contract Time , if any. [ 93 ] Supplemental Instructions is defined in the Contract as an instruction, not involving adjustment in the Contract Price or Contract Time , in the form of Specifications, Drawings , schedules, samples, models or written instructions, consistent with the intent of the Contract Documents .

It is to be issued by the Consultant to supplement the Contract Documents as required for the performance of the Work . [ 94 ] Drawings R-1 and R-2 contain provisions with respect to the Consultant’s role: FIELD REVIEW BY READ JONES CHRISTOFFERSEN (RJC) 1. Read Jones Christoffersen provides field review only for the work shown on these drawings. This review is not a “full time” review but is conducted with such frequency as RJC deems appropriate to observe various states of the work and to ascertain that the work is in general conformance with the plans and supporting documents prepared by RJC.

Field review by RJC is not carried out for the contractor’s benefit, nor does it make RJC guarantors of the contractor’s work. It remains the contractors responsibility to build the work in conformance with the contract documents. RJC will not be responsible for the acts or omissions of the contractor, or for the failure of any of them to carry out the work in accordance with the contract documents. [ 95 ] With respect to the authority and role of the Consultant under a CCDC 2 contract, in ASC Justice Antonio made some helpful findings at paragraph 19 of her decision, which I summarize here .

The Consultant is empowered to make decisions in real time or as close to it as possible. They are chosen because of their expertise in the relevant areas of a construction project. Their access to the work site and their expertise to evaluate the work, including the state of completion of the work, are essential. The Consultant has regular engagement with the owner, the contractor, the work performed by the contractor, and the contractual obligations: see ASC at para 19 . [ 96 ] In this case, Metrowest engaged RJC as its consultant.

The Engineering Services Proposal as well as the provisions in the Contract stipulate RJC’s authority and role with respect to the Deerfoot Square project. RJC was heavily involved in and handled the tendering and bidding process. RJC had access to the work site and used its expertise to evaluate Flynn’s work during the process of the roof replacement. Part of RJC’s role in this regard was to address any concerns raised by Flynn during the performance of the work under the Contract, and for Mr.

Parker to use his knowledge and experience to determine whether any requested adjustments to the work arising required a change order, an NOPC or a Supplemental instruction, or whether the adjustment was within the specifications of the Contract, or within the contractor’s means and methods. RJC was responsible for site visits and preparation of the site visit reports. RJC had authority to act on behalf of the owner Metrowest. RJC was responsible for certifying the work completed by Flynn.

[ 97 ] Communication occurred between RJC and Metrowest, and RJC and Flynn. There was no direct communication between Metrowest and Flynn. RJC was the go-between. This is supported by the testimony of Gary Playsted who testified that he never had any communication with Mrs. Myron before the Contract was signed. When asked who Flynn dealt with when it was determining the scope of work under the Contract, Mr. Playsted testified “Phil Parker and Amanda Wojda of RJC.

They were the owner’s consultant.” In my view, the evidence supports a finding that Flynn was entitled to rely on RJC’s representations and instructions with respect to the Deerfoot Square roof replacement project. D. Rectification for Mutual Mistake [ 98 ] Canada (Attorney General) v Fairmont Hotels Inc , 2016 SCC 56 [ Fairmont ] is the leading authority on rectification. At paragraph 38, Justice Brown for a unanimous Supreme Court of Canada summarized rectification as follows: Rectification is an equitable remedy designed to correct errors in the recording of terms in written legal instruments.

Where the error is said to result from a mistake common to both or all parties to the agreement, rectification is available upon the court being satisfied that, on a balance of probabilities, there was a prior agreement whose terms are definite and ascertainable; that the agreement was still in effect at the time the instrument was executed; that the instrument fails to accurately record the agreement; and that the instrument, if rectified, would carry out the parties’ prior agreement.

In the case of a unilateral mistake, the party seeking rectification must also show that the other party knew or ought to have known about the mistake and that permitting the defendant to take advantage of the erroneously drafted agreement would amount to fraud or the equivalent of fraud. [ 99 ] At paragraph 12, Fairmont states: 12 If by mistake a legal instrument does not accord with the true agreement it was intended to record — because a term has been omitted, an unwanted term included, or a term incorrectly expresses the parties' agreement — a court may exercise its equitable jurisdiction to rectify the instrument so as to make it accord with the parties' true agreement.

Alternatively put, rectification allows a court to achieve correspondence between the parties' agreement and the substance of a legal instrument intended to record that agreement, when there is a discrepancy between the two.

Its purpose is to give effect to the parties' true intentions, rather than to an erroneous transcription of those true intentions (Swan and Adamski, at §8.229). [ 100 ] Common mistake arises when both parties subscribe to an instrument under a common mistake that it accurately records the terms of their antecedent agreement: see Performance Industries Ltd v Sylvan Lake Golf & Tennis Club Ltd, 2002 SCC 19 [ Performance Industries ] . [ 101 ] Rectification corrects the recording in an instrument of an agreement: Fairmont at para 30 .

The purpose is “to restore the parties to their original bargain, not to rectify a belatedly recognized error of judgment by one party or the other”: Fairmont at para 13 ; Beazer v Tollestrup Estate , 2017 ABCA 429 at para 52 , citing Performance Industries at para 31 . [ 102 ] The Supreme Court of Canada in Fairmont cautioned that rectification should not be a substitute for due diligence at the time a document is signed; it is limited to cases where the agreement between the parties was not correctly recorded in the instrument that became the final expression of their agreement: Fairmont at para 3, 13 .

Showing mere intentions is insufficient. The party seeking to correct an erroneously drafted written instrument on the basis of a common mistake must first demonstrate its inconsistency with an antecedent agreement with respect to that term: Fairmont at para 29 . [ 103 ] The party seeking rectification needs to show the alleged error in the instrument and the way in which the instrument should be rectified to correctly record what the parties intended to do.

It must identify the omitted or incorrectly recorded terms, which, if correctly recorded, are sufficiently precise to constitute the terms of an enforceable agreement: Fairmont at para 32 . [ 104 ] The Alberta Court of Appeal in Composite Technologies Inc v Shawcor Ltd , 2017 ABCA 160 at paragraph 129 reiterated that the law on rectification is clear, citing the principles set out in Fairmont . [ 105 ] In Chateauvert v Chateauvert , 2018 ABQB 2 , Chief Justice Moreau outlined the test for rectification in the case of mutual and common mistake as set out in Nature Conservancy of Canada / Societe Canadienne Pour La Conservation De La Nature v Waterton Land Trust Lte , 2014 ABQB 303 at para 300 : 1.

The existence and nature of a common intention by the parties prior to making of the document or instrument alleged to be deficient; 2. That this common intention remained unchanged at the date that the document or instrument was made; and 3. That the alleged document or instrument, by mistake, does not conform to the parties’ prior common intention. [ 106 ] The standard of proof that applies to all civil cases is the balance of probabilities: McDougall at para 40 .

Evidence must always be sufficiently clear, convincing and cogent: McDougall at para 46 ; Fairmont at para 36 . “Convincing proof” is required to counteract the cogent evidence of the parties’ intention displayed by the instrument itself: Fairmont at para 36 ; see also Performance Industries at para 41 . [ 107 ] Metrowest argues that there was no mutual or unilateral mistake regarding the Contract. It states that Addendum 1 did not form part of the Contract because it was not listed in

Article A-3 Contract Documents. Metrowest relies on the testimony of Mrs. Myron, the email correspondence between March 22 and April 11, 2013, and the “entire agreement” clause in the at 2.1 of

Article A-2 of the Contract. Metrowest further asserts that Flynn has not satisfied the high threshold for a court to order the remedy of rectification. I disagree. [ 108 ] The evidence supports a finding of a prior agreement between Metrowest and Flynn. Metrowest retained RJC as its consulting engineer with respect to the Deerfoot Square project. Part of RJC’s role as consultant pursuant to the Contract was to tender the project,

review contractor queries, issue addenda and review bid submissions. RJC was the go-between between the owner Metrowest and the contractor Flynn. There was no evidence provided at trial to indicate that there was any communication between Metrowest and Flynn – all communication went through RJC. [ 109 ] RJC developed Addendum 1 following a pre-tender closing site meeting on March 7, 2013 when concerns were raised regarding removing the HVAC unit on site. Testimony from Mr. Parker and Ms.

Wojda indicated that lifting the HVAC unit off the roof was extremely costly, and would necessarily have involved permission from the airport authority due to the size of crane required for such a large HVAC unit being in a direct flight path. [ 110 ] Addendum 1 was listed in the tender submitted and distributed to the bidding contractors; it formed part of the spec package that the bidders used to prepare their bid for the Deerfoot Square project. Ms. Wojda copied Mrs. Myron on the email with these documents attached on March 12, 2013. While Mrs.

Myron testified that she had not seen the bid package that had gone out to the bidders prior to March 22, 2013, the emails indicate that she was copied on this email, and as such, would have seen it. [ 111 ] The bids submitted on March 21, 2013 specifically referenced Addendum 1, and the prices reflected Addendum 1. Ms. Wojda sent the submitted bids, and the Spec Package and Addendum 1 to Mrs. Myron on March 22, 2013. Mrs. Myron had ample opportunity to specifically address Addendum 1 and ensure it was not part of the Contract. Yet, she did not do so.

She continued to reiterate her concern about the removal of wet and/or compromised insulation – a concern that Mr. Parker and Ms. Wojda were aware of and acknowledged. [ 112 ] The subsequent conduct of RJC and Flynn is consistent with Addendum 1 forming part of Contract. Ms. Wojda and Mr. Playsted testified that Flynn generally performed the work in accordance with Addendum 1. [ 113 ] The agreement was in effect at the time of signing. The testimony of Mr. Parker, Ms. Wojda and Mr.

Playsted confirm that Addendum 1 was not cancelled or withdrawn between the date of its issue and the date bids were received by Flynn and Skyline. Both Mr. Parker and Ms. Wojda testified that Addendum 1 was left off the list by mistake. [ 114 ] Further, I find that the email correspondence sent by Mrs. Myron to RJC indicate that her concern was the removal of wet and/or compromised insulation. The written evidence being the email correspondence between Mrs. Myron and RJC, and the inclusion of Addendum 1 in the tender and bidding documents are far more objective evidence than Mrs. Myron’s testimony at trial. Mr.

Parker testified that Metrowest was a “rather engaged client” throughout the project. Mrs. Myron’s testimony that Addendum 1 was not part of the Contract is implausible given the totality of the evidence. When asked why Addendum 1 was not listed, Ms. Wojda and Mr. Parker testified that it was an oversight. [ 115 ] The Contract fails to list Addendum 1 under

section 3.1 of the Contract. This is not a disputed fact. Rectification in this instance gives effect to the true intention of the parties, rather than a transcription mistake. I find that the evidence establishes that Addendum 1 was mistakenly left off under

Article 3 – Contract Documents of the Contract. The email correspondence between Metrowest and RJC demonstrates that Metrowest was aware of and agreed with leaving the HVAC unit in place. The concern was that all wet and/or compromised insulation was removed. The mistake here was the failure to list Addendum 1 in

Article A-3 Contract Documents due to an inadvertent oversight. [ 116 ] In my view, it is clear on the evidence before me that it was a mistake to not have listed Addendum 1 in the Contract. Rectification in this case restores Metrowest and Flynn to its original bargain. I find that Flynn has met the requirement of “convincing proof” such that rectification due to mutual mistake is warranted. [ 117 ] Therefore, I order rectification of the Contract to include listing Addendum 1 under

Article 3 – Contract Documents. This necessarily means that the scope of work pursuant to the Contract includes Addendum 1. [ 118 ] Given my finding above that rectification is appropriate in this case of mutual mistake, it is unnecessary to address rectification due to unilateral mistake. Issue 2: Was Flynn in breach of Contract and/or negligent? A. Relevant Terms of the Contract [ 119 ] The following provisions of the Contract are relevant to the issues of breach of contract and negligence:

ARTICLE A-1 THE WORK The Contractor shall: 1.1 perform the Work required by the Contract Documents for Deerfoot Square Roof replacement located at 2938 – 11 Street NE Calgary, AB for which the Agreement has been signed by the parties, and for which Read Jones Christoffersen Ltd. Is acting as and is hereinafter called the “ Consultant ” and 1.2 do and fulfill everything indicated by the Contract Documents... ...

ARTICLE A-2 AGREEMENTS AND AMENDMENTS 2.1 The Contract supersedes all prior negotiations, representations or agreements, either written or oral, relating to any manner to the

Work , including the bidding documents that are not expressly listed in

Article A-3 of the Agreement – CONTRACT DOCUMENTS. 2.2 The Contract may be amended only as provided by the Contract Documents . ...

GC 3.10 SHOP DRAWINGS 3.10.1 The Contractor shall provide Shop Drawings as required in the Contract Documents . 3.10.2 The Contractor shall provide Shop Drawings to the Consultant to review... ... 3.10.4 The Contractor shall provide Shop Drawings in the form specified, or if not specified, as directed by the Consultant . ... 3.10.6 The Consultant ’s review is for conformity to the design concept and for general arrangement only. ... 3.10.8 The Contractor shall review all Shop Drawings before providing them to the Consultant .

The Contractor represents by this review that: .1 the Contractor has determined and verified all applicable field measurements, field construction conditions, Product requirements, catalogue numbers and similar date, or will do so, and .2 the Contractor has checked and co-ordinated each Shop Drawing with the requirements of the Work and of the Contract Documents . 3.10.9 At the time of providing Shop Drawings , the Contractor shall expressly advise the Consultant in writing of any deviations in a Shop Drawing from the requirements of the Contract Documents .

The Consultant shall indicate the acceptance or rejection of such deviation expressly in writing. 3.10.10 The Consultant ’s review shall not relieve the Contractor of responsibility for errors or omissions in the Shop Drawings or for meeting all requirements of the Contract Documents . [ 120 ] Shop Drawings are defined in the Contract as drawings, diagrams, illustrations, schedules, performance charts, brochures, Product data, and other date which the Contractor provides to illustrate the details of portions of the Work . [ 121 ]

Section 01 10 01 GENERAL REQUIREMENTS provides: 1.1 DESCRIPTION OF WORK .1 Conduct the Work to roof at 2938 11 th Street N.E. building as denoted on the drawings as described herein. The work outlined below is general in nature. For the complete scope of work, refer to the drawings, addenda and other sections of the specifications. .2 The Work includes, but is not necessarily limited to the following: .1 Demolish and remove all existing roofing materials, down to the structural slab. .2 Supply and install new roofing assemblies as denoted on the drawings and in accordance with applicable specification sections. [ 122 ]

Section 07 53 52 MODIFIED BITUMEN MEMBRANE ROOFING provides: 1.1 WORK INCLUDED .1 Remove the existing roofing assembly down to the structural deck and install new roofing assemblies, sheet metal flashings, wood blocking and sealants as described on the drawings. ... 1.9 COMPATABILITY .1 Compatibility between all components of roofing system is essential. .2 The Contractor shall be responsible for ensuring that all items elected for use are compatible with each other. .3 Procure all roofing membranes from one manufacturer certified by them that all components are compatible with each other. ... 2.1 VAPOUR RETARDER

.1 SBS modified bitumous membrane with reinforcement to CGSB 37-GP-56 .2 Manufacturer: .1 Lastobond 195 or 240 by Soprema .2 IKO MVP by IKO Industries Ltd. 1.2 MODIFIED BITUMEN TORCH APPLIED MEMBRANE .1 Two (2) ply system made from prefabricated modified bitumen membranes containing minimum 15% of elastomer Styrene ButadieneSytrene (SBS) and reinforced with nonflammable, fireproof and stress-resistant insert of glass fibre or polyester. ... 2.3VAPOUR RETARDER .1 For Self-adhering vapour retarder. .1 Prime deck as recommended by manufacturer. ... .3 Apply pressure to membrane surface to ensure adequate adhesion... [123]

Section 01 78 40 WARRANTIES AND BONDS provides: 1.2 ROOFING SYSTEM WARRANTY/GUARANTY PERIOD .1 All of the Work of the Contract shall include a written joint and several certificate, signed by both the Manufacturer andContractor, providing a ten (10) year warranty, commencing on the Final Holdback release date stating that all materials and labour shallbe free of defects, premature deterioration and will not leak of a ten (10) year warranty period. Submit signed certificates assuring theabove to the Owner. B.

Legal principles regarding breach of contract and negligence [124] Justice Nielsen in Vermillion & District Housing Foundation v Binder Construction Limited, 2017 ABQB 365, outlines legalprinciples regarding breach of contract and negligence in construction: 121 A contractor must act according to the terms of the contract and the directions of the consultant authorized under the constructioncontract.

In the absence of an express provision to the contrary, a contractor is in breach of the contract if it does not carry out theperformance obligations in the contract or if it performs work which does not meet the requirements of the express terms andspecifications and the implied terms of the contract. A contractor who undertakes to carry out the work according to specifications mustadhere strictly to all the details, and is not entitled to make substitutions or changes without the owner's consent.

If the contractor holdsitself out as qualified to do the work, then a failure to do so competently is a breach of contract. Whether work or material supplied bythe contractor is defective or not is a question of fact in each case, depending on the proper

interpretation of the specifications, and onexpert or other relevant evidence as to what is reasonable: TG Heintzman and I Goldsmith in Heintzman and Goldsmith on CanadianBuilding Contracts, 5th ed (Toronto : Carswell, 2014-) at 4-35, 5-2, 5-5, 7-29, 7-30, and cases cited therein. 122 Unless the contract or the circumstances indicate otherwise, the contract will contain an implied term that the work will be donein a good and workmanlike manner, the workmen employed on the work will possess the ordinary skill of those exercising the particulartrade, and the materials will be of good quality and reasonably fit for the purpose for which they are used: Heintzman and Goldsmith at4-50.

In G. Ford Homes Ltd. v. Draft Masonry (York) Co. (1983), (ON CA), 43 O.R. (2d) 401, 1 D.L.R. (4th)262 (Ont. C.A.), Cory J., as he then was, observed that a contractor undertaking to do work implicitly undertakes that it will beundertaken with care and skill or in a workmanlike manner and will be reasonably fit for the purpose for which it is required, unless thecircumstances of the contract exclude such liability. 121 A contractor must act according to the terms of the contract and the directions of the consultant authorized under the constructioncontract.

In the absence of an express provision to the contrary, a contractor is in breach of the contract if it does not carry out theperformance obligations in the contract or if it performs work which does not meet the requirements of the express terms andspecifications and the implied terms of the contract. A contractor who undertakes to carry out the work according to specifications mustadhere strictly to all the details, and is not entitled to make substitutions or changes without the owner's consent.

If the contractor holdsitself out as qualified to do the work, then a failure to do so competently is a breach of contract. Whether work or material supplied bythe contractor is defective or not is a question of fact in each case, depending on the proper

interpretation of the specifications, and onexpert or other relevant evidence as to what is reasonable: TG Heintzman and I Goldsmith in Heintzman and Goldsmith on CanadianBuilding Contracts, 5th ed (Toronto : Carswell, 2014-) at 4-35, 5-2, 5-5, 7-29, 7-30, and cases cited therein. 122 Unless the contract or the circumstances indicate otherwise, the contract will contain an implied term that the work will be donein a good and workmanlike manner, the workmen employed on the work will possess the ordinary skill of those exercising the particulartrade, and the materials will be of good quality and reasonably fit for the purpose for which they are used: Heintzman and Goldsmith at4-50.

In G. Ford Homes Ltd. v. Draft Masonry (York) Co. (1983), (ON CA), 43 O.R. (2d) 401, 1 D.L.R. (4th)262 (Ont. C.A.), Cory J., as he then was, observed that a contractor undertaking to do work implicitly undertakes that it will beundertaken with care and skill or in a workmanlike manner and will be reasonably fit for the purpose for which it is required, unless thecircumstances of the contract exclude such liability.

123 The conduct of a contractor may constitute not only a breach of contract but also negligence: Heintzman and Goldsmith at 7-2.Generally speaking, there is a duty of care owed by a contractor to an owner: University of Regina v. Pettick (1991), (SK CA), 90 Sask. R. 241, 6 C.C.L.T. (2d) 1 (Sask. C.A.).

What is undertaken by the contract will indicate the nature of the relationshipthat gives rise to the common law duty of care, but the nature and scope of the duty of care that is asserted as the foundation of thetortious liability does not depend on specific obligations or duties created by the express terms of the contract - the distinction isbetween what is to be done and how it is to be done: Central & Eastern Trust Co. v. Rafuse, (SCC), [1986] 2 S.C.R.147 (S.C.C.) at 204, [1986] S.C.J. No. 52 (S.C.C.). 124 In Fraser-Reid v. Droumtsekas (1979), (SCC), [1980] 1 S.C.R. 720 (S.C.C.) at 726, [1979] S.C.J.

No.125 (S.C.C.), Dickson J. for the majority stated the relevant question as being: "Did the builder act as a competent and careful builderwould have acted in what he did or did not do?", citing Batty v. Metropolitan Property Realisations Ltd., [1978] 2 All E.R. 445 (Eng.C.A.) and Dutton v. Bognor Regis United Building Co. (1971), [1972] 1 All E.R. 462 (Eng.

C.A.). 125 An owner may sue a building contractor alternatively or concurrently in contract and tort, and a contractor who is negligent in theperformance of a contract to build is liable in tort to any person suffering resultant injury to person or property, unless such liability islimited by the contract: Dominion Chain Co. v. Eastern Construction Co. (1976), (ON CA), 12 O.R. (2d) 201, [1976]O.J. No. 2104 (Ont. C.A.), aff'd without reference to this point (SCC), [1978] 2 S.C.R. 1346 (S.C.C.), Dabous v.Zuliani (1976), (ON CA), 12 O.R. (2d) 230, 1 C.P.C. 48 (Ont.

C.A.), Central Trust Co.; BG Checo International Ltd. v.British Columbia Hydro & Power Authority, (SCC), [1993] 1 S.C.R. 12, [1993] S.C.J. No. 1 (S.C.C.). C. Expert Evidence [125] Both Metrowest and Flynn proffered expert evidence at trial. [126] Metrowest obtained an expert report from Entuitive Corporation. The report was authored by Jonathan Bains, Senior BuildingEnvelope Engineer, and reviewed by Brian Shedden, Senior Associate at Entuitive, dated December 7, 2016 (Entuitive Report). [127] Flynn obtained an expert report from Petra Contract Services Ltd.

The report was authored by Jon Peat, a Registered RoofConsultant and a Registered Roof Observer, dated October 31, 2017 (Petra Report). [128] Metrowest retained EXP Services Inc. to prepare a rebuttal report to the Petra Report. Mr. Bains, who had left Entuitive and atthat time was a Project Manager and Building Envelope Engineer of EXP Services Inc. authored the rebuttal report, dated January 12,2018 (EXP Rebuttal Report). [129] Metrowest originally sought to have Dr. Muneer Matti of M&J Consulting testify, however Flynn objected and a mid-trialapplication took place. Dr.

Matti inspected the Deerfoot Square roof in 2014 and 2015, and prepared a report (M&J Report). Uponsubmissions from counsel and review of the case law, I determined that the denial of Dr. Matti’s evidence was the only suitable remedydue to the obvious prejudice to Flynn in not being allowed a rule 5.18 examination of Dr. Matti that was not compensable in costs and/oradditional time with which to cross-examine Dr. Matti. Further, I determined that Metrowest had other experts being called and that thedenial of Dr.

Matti’s evidence did not leave Metrowest in a position where its ability to meet its burden of proof was jeopardized. I onlyrefer to this mid-trial application because the M&J Report is referenced in the expert reports admitted at trial. i. Entuitive Report of Metrowest [130] Mr. Shedden was qualified as a building envelope expert to give an opinion with respect to roofing systems, roofing systemconditions, roofing system condition assessments and roofing replacement generally, and specifically in the context of the within case.Following argument by counsel, I ruled that Mr.

Shedden was permitted to give evidence that did not overlap with the evidence ofJonathan Bain, a building envelope engineer, who authored the Entuitive report. [131] Entuitive was retained to investigate and review the north roof at Deerfoot Square. It was advised by Metrowest that variousissues had occurred with the roof since its replacement in 2013, including leaking, ridging and blisters, as well as wet insulation andexisting roof membrane abandoned below a large mechanical unit. Mr.

Shedden confirmed that he did not know whether there was anywater underneath the HVAC unit; this information was provided to him by Metrowest’s counsel. [132] Entuitive’s scope of work was to review all the drawings and documentation provided by counsel for Metrowest (whererelevant), interview on-site personnel knowledgeable about the current and past performance of the building envelope systems, perform avisual review of the existing roofing systems and perform strategic cut tests into the roof to further evaluate the existing condition andconstruction of the systems and/or diagnose known issues. [133] Mr.

Shedden testified that during Entuitive’s visual inspection, there was localized bubbling in the roof membrane and someridging telegraphing through the roof membrane. He explained that ridging can be caused by vapour or by a lack of adhesion. In hisopinion, lack of adhesion was more likely the cause of the ridging because vapour usually presents as a blister. [134] Following the visual inspection, Entuitive performed three cut tests in the field. Mr. Bain selected the location of the three cuttests.

Each was approximately 16 inches by 16 inches in size, resulting in a total of 6.75 square feet of the total 7,200 square foot area ofthe north

section of the roof, or less than one percent of the north cap. [135] No moisture was evident in the three cut tests, although components were noted to be poorly adhered together, with theadhering asphalt demonstrating a shiny glaze. Mr. Shedden testified that this shiny glaze typically occurs when the hot-applied asphalthas cooled beyond its proper application level and has begun to set before being placed. Based on the three cut tests performed, Entuitivestated that it could reasonably infer that this condition was systematic throughout the roof. In my view, Mr.

Shedden’s inference that thequality of adhesion at three cut tests that represent less than one percent of the reroofed area necessarily applies to the entirety of theDeerfoot Square roofing system is problematic, particularly in light of Mr. Parker’s evidence.

[ 136 ] Mr. Parker testified that there would naturally be some variances in the degree of adhesion through the roof. Based on his experience, he stated that he would expect 90 cut tests if he were asked to test the performance of the roof design. Even if conducting 90 cut tests is considered excessive, it is noteworthy that when Mrs. Myron retained Skyline to investigate the roof initially, Skyline conducted 24 cut tests to determine its performance as of November 2012. While I appreciate that Mr.

Shedden qualified his opinion regarding adhesion by stating that it was “likely systematic” throughout the roof, in my view, this inference is neither persuasive nor conclusive. [ 137 ] The Entuitive report notes that the sketch provided by RJC in Addendum 1 document illustrates that the existing material is isolated from the balance of the roof via liquid membrane. Mr. Shedden acknowledged that the best opportunity to observe whether in fact the area under the HVAC unit is wet was when the roof was being taken off.

He stated that the design with curbs beneath the HVAC unit satisfied him that no water can get underneath the HVAC system and that this would mean it was properly enclosed or encapsulated. Entuitive opined that if the insulation was dry beneath, there would be no issue, however if the material was wet, then it would need to be removed to ensure no leak into the interior and no continued deterioration. Mr. Shedden confirmed at trial that the only issue from his perspective was whether there was wet material there when the curbs were built and the roof was redone. I accept Mr. Shedden’s opinion on this point.

Based on the evidence put before me, I find that there is agreement that if wet material is in the roofing system

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