2017 ONSC 5437, 2017 ONSC 5437

CITATION : The Corporation of the United Counties of Prescott & Russell v. David S. Laflamme Construction Inc. and Waterproof Concrete (Canada) Ltd. , 2017 ONSC 5437 COURT FILE NO.: 10-48888 DATE: 2017/09/13 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: ) ) The Corporation of the United Counties of Prescott & Russell Plaintiff – and – David S. Laflamme Construction Inc. and Waterproof Concrete (Canada) Ltd. Defendants ) ) ) ) ) ) ) ) )) ) ) )) Allan R. O’Brien and Frances Shapiro Munn, for the Plaintiff James M. Brown for the Defendants ) HEARD: July 5, 2017 reasons for decision o’bonsawin J.

Background [ 1 ] WSP Canada Inc. (WSP) was retained by the Corporation of the United Counties of Prescott & Russell (United Counties) in July 2004 to prepare a proposal for the rehabilitation of the J. Henri Seguin Bridge. This proposal was finalized in November 2004 and contained three alternatives for the rehabilitation of the bridge. Based on WSP’s recommendation, the United Counties chose the third alternative: overlay the entire deck with hydrophobic concrete (full rehabilitation).

WSP indicated that this option negated the need for a waterproofing membrane. [ 2 ] WSP was retained as the consulting engineer for the project and in April 2005, it prepared the specifications for the rehabilitation project. The specifications for the project called for air entrainment at s. 930.04.01 Mix Designs. This

section was later amended by the addition of s. 930.04 Submission and Design Requirements which stated that the concrete was to contain Everdure Caltite. [ 3 ] In 2005, the rehabilitation work was completed by David S. Laflamme Construction Inc. (Laflamme) and involved the use of waterproof concrete made with an admixture known as Everdure Caltite. The admixture was supplied by Waterproof Concrete (Canada) Ltd. (Waterproof), and the concrete mixture was prepared by Cumberland Ready-Mix Ltd. and R.W. Tomlinson Limited.

In May 2006, concrete deficiencies were noted along the full length of the sides of the concrete deck and the base of the parapet wall. Repairs to these sections were completed by Laflamme in or about October 2007. Further deficiencies in the concrete deck and the base of the parapet walls were noted in or about the Fall of 2008. Laflamme refused to repair the bridge again. [ 4 ] The action was commenced by Notice of Action on July 2, 2010. Defences were filed by Waterproof and Laflamme. Waterproof issued a Third Party Claim against Cumberland Ready-Mix Ltd. and R.W. Tomlinson Limited.

The third parties defended the action. The United Counties delivered its Reply to Waterproof’s Defence and amended its Statement of Claim. Mediation was held with all parties on July 18, 2013 and Discoveries on June 16 and 17, 2014.

[ 5 ] Laflamme obtained an expert report dated January 23, 2014, and the United Counties obtained an expert report dated August 26, 2014 and a second Site Review and Core Testing Report on September 25, 2014. These reports raise concerns that the Everdure Caltite product – specified by WSP to be used on the project – should not have been used and that air entrainment was necessary for the durability of the concrete. [ 6 ] The United Counties seek: (

a) an Order granting leave to the United Counties to amend the Statement of Claim to add WSP as a Defendant to this proceeding along with the appropriate amendments to the allegations as set out in the Amended Amended Statement of Claim; (

b) an Order that Mr. Justice Maranger’s Order, dated April 25, 2014, be varied to extend the date to set this matter down for trial; and (

c) costs of this Motion. Issues [ 7 ] The issues on this Motion are:

(1) Has the United Counties brought a Claim against WSP within the limitation period?

(2) Should leave be granted to extend the time to set this matter down for trial? Position of the Parties [ 8 ] The United Counties takes the position that at all material times, WSP acted as its engineering consultant. As part of its consultation work for the United Counties, WSP prepared specification for two sets of repairs to the J. Henri Seguin Bridge.

The United Counties seeks to amend its claim to allege that WSP was negligent in the preparation of specifications and in its role as consulting engineer during the project. [ 9 ] The United Counties submits that it brought its claim against WSP within two years of when the material facts of a claim against WSP could have been reasonably discovered by exercise of reasonable diligence. The motion was initially scheduled for April 23, 2015, adjourned to February 25, 2016, then finally adjourned to July 5, 2017.

The United Counties argues that the various adjournments were necessary to complete cross-examinations on the parties’ Affidavits to deal with production issues arising from the cross-examinations. [ 10 ] The United Counties argues that at all material times, WSP assured the United Counties that the problem with the bridge was poor workmanship by the contractor. WSP continued to provide these assurances to the United Counties although it put its insurer on notice in October 2013 that the United Counties might have a potential claim against it.

At no time did WSP advise the United Counties that it could be liable for the damage to the bridge or that it had put its insurer on notice. The United Counties submits that this was in breach with WSP’s professional obligations to avoid conflicts of interest. [ 11 ] For its part, WSP argues that the limitation period in which the United Counties could advance such a claim has long since expired. Since at least 2009, and dating back to the first repair in 2006, Laflamme has denied any liability for the United Counties damages.

Laflamme has consistently and repeatedly alleged that liability lay with the predecessor entity of WSP because it specified the use of Everdure Caltite. This position has been repeated by Laflamme in its pleadings to this action, filed in 2010. Similar allegations were made in the pleadings of the other parties to this action, filed in 2010 and 2011.

Despite the allegations made by Laflamme and the other parties, the United Counties took no steps to initially advance a claim against WSP until November 24, 2014. [ 12 ] WSP has denied and continues to deny any liability arising from the specified use of Everdure Caltite.

However, regardless of the substance of such allegations, WSP argues that the United Counties had sufficient information to make such allegations against WSP since at least October 29, 2009, had the United Counties chosen to do so. [ 13 ] WSP also argues that since commencing this action, the United Counties sought and obtained assistance from WSP with respect to the preparation of its case, including: the gathering of documents, the provision of technical advice, opinions and evidence, and assistance during mandatory mediation.

WSP would not have provided this assistance in the apparently mistaken belief that WSP and the United Counties were working in a common interest in this litigation, as they had similarly done on a previous project. WSP further argues that even if the limitation period has not lapsed, it has been prejudiced as a result of the United Counties obtaining this assistance and evidence under the guise of a common interest. Consequently, leave for the United Counties to now add WSP as a defendant to this litigation should be denied.

The Law and Analysis Issue No. 1 - Has the United Counties brought a Claim against WSP within the limitation period? [ 14 ] The Rules of Civil Procedure , R.R.O. 1990, Reg. 194, authorize that a party can amend pleadings. Rule 5.04(2) of the Rules provides:

At any stage of a proceeding the court may by order add, delete or substitute a party or correct the name of a party incorrectly named, onsuch terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment. [15] Rule 26.01 states: On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice wouldresult that could not be compensated for by costs or an adjournment. [16] The basic limitation period is defined in s. 4 of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B.

Section 4 states: Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day onwhich the claim was discovered. [17] The discoverability principle in s. 5 of the Limitations Act, 2002 states: Discovery 5

(1) A claim is discovered on the earlier of, (

a) the day on which the person with the claim first knew, (

i) that the injury, loss or damage had occurred, (ii) that the injury, loss or damage was caused by or contributed to by

an act or omission, (iii) that the act or omission was that of the person against whom the claim is made, and (iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and (

b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to haveknown of the matters referred to in clause (a). Presumption

(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (

a) on the day the act or omission onwhich the claim is based took place, unless the contrary is proved. [18] At para. 16 in Pepper v. Zellers Inc. (2006), (ON CA), 83 O.R. (3d) 648 (C.A.), the Court of Appealstates that discoverability is: a principle that provides that a limitation period commences when the plaintiff discovers the underlying material facts or, alternatively,when the plaintiff ought to have discovered those facts by the exercise of reasonable diligence.

This principle ensures that a person is notunjustly precluded from litigation before he or she has the information to commence an action provided that the person can demonstratehe or she exercised reasonable or due diligence to discover the information. [19] The discoverability principle ensures that a party is not unjustly precluded from litigation before he or she has the informationnecessary to commence an action.

This interest is balanced against the prospective party’s interest in being able to rely on the operationof limitations legislation to be secure from old claims where evidence might have become stale or outdated. The discovery principleapplies both to facts and to the identity of the tortfeasor (Peixeiro v. Haberman, (SCC), [1997] 3 S.C.R. 549, at para. 18& 34). [20] There are two essential elements of the principle of discoverability for a plaintiff: (1) knowledge that someone erred; and (2)whether the plaintiff acted diligently to discover the material facts giving rise to the error.

The party must know that he or she suffered aloss, have knowledge that someone might be responsible, and know the identity of the wrongdoer as well as the nature of the culpableacts (Oakley v. Guirguis, 2014 ONSC 5007, 12 C.C.L.T. (4th) 319, at para. 13). [21] In Wakelin v. Gourley (2005), (ON SC), 76 O.R. (3d) 272 (S.C.), at para. 14, Master Dash asks thequestion of how much evidence is required by the plaintiff to be put in at the pleadings amendment stage to establish that the proposeddefendants could not have been identified with due diligence within the limitation period.

Master Dash states: “The short answer is: notvery much. As stated by the Court of Appeal in Zapfe: [(2003), (ON CA), 66 O.R. (3d) 397 (C.A.), at para. 35] “Inmost cases one would expect to find, as part of a solicitor’s affidavit, a list of the attempts made by the solicitor to obtain information tosubstantiate the assertion that the party was reasonably diligent” and provide “an explanation for why she was unable to determine thefacts”. [22] The United Counties provided an Affidavit from Mr.

William Hunter, their counsel, regarding the numerous good faith effortsto identify the causes of damages and sources of liability with respect to the bridge deterioration. Mr. Hunter constantly inquired withWSP into possible causes of bridge deficiencies. He conducted his own research, reviewed bridge specifications, notes and diagrams,and sought clarifications from WSP. Mr. Hunter questioned design requirements, quality control, materials testing and whether coresamples had been taken. [23] Furthermore, Mr.

Hunter requested clarification on whether proper procedure was followed in performing repairs, whethermore testing was needed to reveal if the Everdure Caltite was properly mixed, whether proper quantities were used, and whether thetemperature control was appropriate. He even requested a report from Mr. Harmer, the Senior Structural Engineer and Director of

Bridges of WSP, on the possible causes of damage to the bridge. [ 24 ] The evidence shows that it was only on August 7, 2013, that Mr. Wasiewicz of WSP questioned the freeze-thaw resistance of the Everdure Caltite product and whether its performance characteristics were less than those claimed. However, without further testing, there was insufficient evidentiary basis for this conclusion. Mr. Wasiewicz recommended that testing be done by Waterproof Concrete, the contractor concrete supplier. [ 25 ] Mr.

Hunter’s Affidavit shows that as of August 2013, WSP still recommended the use of Everdure Caltite for bridge repairs with stronger quality assurance testing. WSP continued to advise the United Counties that the Everdure Caltite admixture was appropriate as long as WSP’s specifications were followed. [ 26 ] The United Counties only discovered evidence supporting an issue with the concrete admixture specified by WSP for the project when it received Dr. Langley’s Report on January 27, 2014. Mr.

Hunter’s evidence is that the United Counties had no reason to believe that allegations to the contrary were anything more than bald allegations by the other defendants. In fact, WSP had always maintained its position that poor workmanship was the cause of the deterioration. WSP never gave the United Counties any cause for concern that it was the Everdure Caltite mixture that could be the issue. [ 27 ] Mr. Hunter’s evidence is that he immediately took steps to clarify the basis for Dr. Langley’s opinion by reviewing contract provisions and specifications and by requesting Ms. Marson’s comments.

She is a Senior Structural Engineer and Director of Transportation Structures Group with WSP and is responsible for the management and coordination of engineering work on transportation/infrastructure projects. She provided Mr. Hunter with an overview of the project and details of the repairs, and answered his questions. Mr. Hunter also performed extensive research on air entrainment, and then arranged for an independent expert report from Mr. Waisanen. [ 28 ] Mr.

Waisanen’s report confirmed that the Everdure Caltite admixture has not been as impermeable to moisture as advertised, thus allowing moisture to penetrate the concrete. It was only as a result of the combined reports from Dr. Langley and Mr. Waisanen that the United Counties and Mr. Hunter discovered that WSP may have been negligent in specifying an inadequate product for the bridge repair. Upon discovery of WSP’s potential negligence, the United Counties took steps to add WSP as a Defendant. [ 29 ] It is clear from Mr.

Hunter’s evidence that, in line with the principle of discoverability, the United Counties only had knowledge that WSP may have been negligent when it received the expert reports and the United Counties acted diligently to discover the material facts giving rise to the error (see Oakley v. Guirguis ). In addition, the evidence provided by Mr. Hunter and the United Counties of the numerous steps taken meets the requirements to be put in at the pleadings amendment stage to establish that the proposed defendants could not have been identified with due diligence within the limitation period (see Wakelin v.

Gourley ; Zapfe v. Barnes ). [ 30 ] WSP argues that when the United Counties initially commenced the action, it chose not to advance a claim against WSP. Instead, the United Counties sought the assistance of WSP within this litigation. A similar relationship had previously occurred with respect to another project involving the Azatika Bridge. During the project, WSP had worked with the United Counties in a collaborative fashion and provided assistance to it with respect to litigation in which the United Counties had become involved.

WSP understood that it would be providing similar assistance to the United Counties in this litigation and the latter had decided that it would not be advancing a claim against WSP. [ 31 ] There is a significant issue with WSP’s argument regarding the assistance that it provided to the United Counties during this litigation: it was acting as a professional engineering advisor for the United Counties in the course of the bridge repairs and in the ensuing litigation.

In its capacity as the United Counties’ engineering advisor, WSP maintained its opinion that the problem with the bridge repairs was the faulty workmanship rather than a problem with the Everdure Caltite mixture. It would have been unreasonable for the United Counties to have distrusted WSP’s advice as its professional advisor. WSP had acted in this capacity with the United Counties in the past. Consequently, the latter would not have any reason to doubt the actions of WSP. [ 32 ] In Ferrara v.

Lorenzitti, Wolfe Barristers and Solicitors , 2012 ONCA 851 , 113 O.R. (3d) 401, there was an issue regarding a longstanding solicitor-client relationship where the lawyer did not inform the client of a possible error. Rather, the lawyer repeatedly assured the client that no error had been made. In this case, the lawyer’s repeated assurances to his client that he was right and had not made a mistake served to delay the commencement of the limitation period.

Justice Epstein, in her dissenting decision, found that it would be unreasonable for the client to distrust his or her professional advisor simply on the basis that the advice had been called into question. Although she ultimately determined that the limitation period began to run when the appellants retained independent legal counsel, she concluded that it would be a violation of professional trust to state than an action is statute-barred because the client made the mistake of relying on his or her professional advisor.

Justice Epstein states, at para. 44: To tell the appellants that they made the mistake of relying on their own lawyers and then allow these lawyers to use this erroneous reliance to support their position that the action was commenced out of time would reward a particularly pernicious violation of solicitor- client trust. [ 33 ] In the recent decision Lauesen v. Silverman , 2016 ONCA 327 , 130 O.R. (3d) 665, the Court of Appeal relied on the Ferrara decision.

The plaintiff sued her former lawyer six years after her lawyer allegedly entered into an improvident settlement for injuries the plaintiff sustained in a motor vehicle accident. In holding that the plaintiff’s claim was not statute-barred by the Limitations Act, 2002 , the Court of Appeal held that where the lawyer did not know she had made an error, and did not advise her client that she made an error, the plaintiff also could not have known the lawyer made an error.

The Court of Appeal noted that had the lawyer thought otherwise, she was obliged by the Rules of Professional Conduct to advise her client she had made an error. [ 34 ] The Court of Appeal held in Lauesen that advising a client of “an error or omission will normally give the client knowledge of the facts necessary to know that she has a claim, and thereby commence the running of the limitation period under s. 5(1)(a) [of the Limitations Act, 2002 ]” (para. 23). The Court of Appeal found that this did not occur and accepted the plaintiff’s evidence that she did

not know that she had a claim against her former lawyer until she obtained an expert report, and her new lawyer advised her that the earlier settlement was improvident. [ 35 ] I agree with the United Counties’ submission that similar to the legal profession, engineers have professional guidelines that set out the steps the engineer is to take when a conflict arises with a client. The Code of Ethics of the Association of Professional Engineers of Ontario clearly defines an engineer’s duty to avoid or disclose conflicts of interest ( R.R.O. 1990, Reg. 941, s. 77(4) ).

A professional engineer’s duty to clients means they must immediately disclose any direct or indirect interest that might prejudice or appear to prejudice their professional judgment. It does not assist WSP that it put its insurer on notice of a potential claim in October 2013 and did not advise the United Counties of its actions. [ 36 ] During her cross-examination of July 8, 2015, Ms. Marson testified that she was familiar with the professional guidelines for conflicts of interest with clients.

The evidence shows that from 2006 to 2014, she did not believe that WSP was in a conflict of interest position with the United Counties. As a result, she never advised the United Counties that she may be in a conflict of interest or take any steps under the professional guidelines that engineers ought to take when a conflict arises. From 2006 to the end of 2014, WSP maintained the position that the problems with the bridge rehabilitation were cause by improper work completed by the contractors and any sub-contractors retained for the project.

The simple fact that the defendants in this litigation pointed the finger at WSP is not enough. The evidence supports the United Counties’ position that it only became aware of WSP’s possible negligence when it obtained Mr. Waisanen’s expert report dated August 26, 2014 and a second Site Review and Core Testing Report on September 25, 2014. Consequently, the statute of limitations only starts to run on August 26, 2014, at the earliest. The steps taken by Mr.

Hunter and the United Counties meet the requirements of the principle of discoverability and the Limitations Act, 2002 . [ 37 ] WSP were acting as trusted advisor throughout the bridge rehabilitation. The United Counties were relying on WSP’s support during this process to their own detriment. WSP cannot benefit from this “support” provided to the United Counties during this litigation.

As in Epstein J.A.’s analysis in Ferrara , WSP’s position that the United Counties action was commenced out of time cannot be rewarded by a pernicious violation of the professional relationship that the United Counties had with WSP. [ 38 ] Consequently, I find that the United Counties can add WSP as a party to the litigation since its actions to do so were within the limitation period.

Issue No. 2 - Should leave be granted to extend the time to set this matter down for trial? [ 39 ] Based on my finding that the United Counties can add WSP as a party to this litigation, I provide leave to the former to extend the time to set this matter down for trial. Conclusion [ 40 ] For the reasons noted previously, I provide as follows: (1) an Order granting leave to the United Counties to amend the Statement of Claim to add WSP as a Defendant to this proceeding along with the appropriate amendments to the allegations as set out in the Amended Amended Statement of Claim; and (2) an Order that Mr.

Justice Maranger’s Order, dated April 25, 2014, be varied to extend the date to set this matter down for trial. Costs [ 41 ] The United Counties are the successful party on this motion. If the parties cannot agree as to costs, the United Counties may provide the Trial Coordinator with brief written submissions on costs not exceeding three pages, exclusive of the Bill of Costs. WSP will have ten days from the date of this Order to provide its submissions. The United Counties will be allowed a brief reply if deemed necessary, of no more than one page, which shall be provided within the next five days. Justice M.

O’Bonsawin Released: September 13, 2017 CITATION : The Corporation of the United Counties of Prescott & Russell v. David S. Laflamme Construction Inc. and Waterproof Concrete (Canada) Ltd. , 2017 ONSC 5437 COURT FILE NO.: 10-48888 DATE: 2017/09/13

ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: The Corporation of the United Counties of Prescott & Russell Plaintiff – and – David S. Laflamme Construction Inc. and Waterproof Concrete (Canada) Ltd. Defendants reasons for decision O’Bonsawin J. Released: September 13, 2017