GOVERNMENT OF YUKON PLAINTIFF v. NORCOPE ENTERPRISES LTD. and, 2022 YKSC 57

SUPREME COURT OF YUKON Citation: Yukon (Government of) v Norcope Enterprises Ltd, 2022 YKSC 57 Date: 20221114 S.C. No. 16-A0180 Registry: Whitehorse BETWEEN: GOVERNMENT OF YUKON PLAINTIFF AND NORCOPE ENTERPRISES LTD. and INTACT INSURANCE COMPANY DEFENDANTS AND TETRA TECH EBA INC. THIRD PARTY AND NORCOPE ENTERPRISES LTD. NORCON CONCRETE PRODUCTS INC., YUCAL PROPERTIES INC., and DOUGLAS L. GONDER FURTHER THIRD PARTIES Before Justice A. Kent Counsel for the Plaintiff Government of Yukon and the Third Party Tetra Tech EBA Inc. I.H.

Fraser and Lesley Banton Counsel for the Defendant Norcope Enterprises Ltd., and the Further Third Parties Norcon Concrete Products Inc., Yucal Properties Inc., and Douglas L. Gonder James R. Tucker Counsel for the Defendant Intact Insurance Company R. Nigel Beckmann REASONS FOR DECISION The Parties [ 1 ] The Government of Yukon (“Yukon”) operates the Erik Nielsen Whitehorse International Airport (“the airport”). Norcope Enterprises Ltd. (“Norcope”), a general contractor, signed a contract with Yukon to remove and replace the apron at the airport.

Intact Insurance Company (“Intact”) provided a performance bond under which it had certain obligations, should Norcope default under its contract. Tetra Tech EBA (“Tetra Tech”), an engineering firm, had contracts with Norcope to provide quality control (“QC”) and provide

the concrete mix design and a contract with Yukon to provide quality assurance (“QA”). The Claims [ 2 ] Work on the apron began in April 2014. On July 29, 2015, Yukon advised Norcope there were major deficiencies in the work done on the apron. As a result, Yukon declared Norcope in default under the contract and made a claim under the Intact bond. Yukon claims $13,460,400 in damages for breach of contract and up to $1,781,103.03 from Intact. Norcope denies there were deficiencies in the work. [ 3 ] Norcope says if there are any deficiencies they result from outside forces or the actions of Yukon.

In a counterclaim, Norcope claims Yukon breached its duty by providing representations and information about the project that were false or negligent. Further, when Norcope advised Yukon about problems arising because the ground under the apron was unstable, settling and moving, Yukon ignored that advice. Some of the problems caused delay in work such that Norcope makes a claim for delay. In addition, Yukon altered the work to be performed which increased costs for Norcope, which it claims.

Norcope claims further when the work was first disputed, a representative of Yukon made false or misleading statements to the press, which have caused damage to Norcope’s reputation. It also claims that Yukon acted in bad faith. Intact denies Norcope is in default under the contract and therefore, Yukon has suffered no damages. [ 4 ] Norcope issued a Third Party Notice to Tetra Tech, which claims that it breached both its contract to provide the mix design to Norcope and its contract to provide QC services to Norcope.

It also claims that Tetra Tech intentionally interfered with the contractual relationship with Yukon by producing the July 27, 2015 report (the “Final Report”) which, Norcope alleges, was deliberately drafted to attribute responsibility to Norcope for the deficiencies in the apron. Norcope also claims Tetra Tech was negligent in its QA work for Yukon, which in turn caused loss to Norcope.

Norcope also claims Tetra Tech owed a duty of care to Norcope and it breached that duty in issuing a report to Yukon which was wrong and misleading. [ 5 ] Yukon entered into a Pierringer Agreement with Tetra Tech, which provided in part that Yukon assumed the defence of Tetra Tech. The Contracts The Norcope Contract [ 6 ] Norcope was advised it was awarded the contract for the replacement of the apron on February 14, 2014. The contract price was $3,562,206.05. Norcope was the lowest bidder.

On February 27, 2014, in the tender review meeting between Yukon and Norcope, the following was noted by the parties: • Norcope would engage Tetra Tech to design the Portland Cement Concrete (“PCC”) mix and perform QC. • Mr. Beecher, working under Norcope, would oversee the formwork and the paving operations. • Mr. Gonder confirmed that Norcope was satisfied with its bid. • Mr. Gonder raised the issue of the suitability of the sub-base (“…as he is concerned from past-history on other projects at the airport.” In response, Mr.

Jansson said “the only information they had was the geotechnical information provided in the tender viewing package” and “… if there are issues, that they be addressed on a case-by-case basis”). • Mr. Lasker, the Norcope project manager, proposed using a lean mix concrete for the cement stabilization base. [ 7 ] The contract between Yukon and Norcope was signed on March 18, 2014. The Articles of Agreement attached detailed conditions and specifications the way the contract was to be performed.

The relevant sections are: • The Articles state that Norcope will by August 15, 2014, rehabilitate the airport apron in a careful and professional manner and complete the work in accordance with the plans and specifications. • The General Conditions provide that: a. The Engineer is the engineer designated by Yukon who carries out the functions designated to ‘the Engineer’ under the contract, and his role is to ensure that the work is performed in accordance with the contract. b.

Yukon may appoint an expert to examine the work if the Engineer has reason to believe that the work is not being performed in accordance with the contract, and Norcope may be responsible for paying the costs of that examination. c. The Engineer makes the final decision on any question about whether anything has been done under the contract, including the meaning and

interpretation of the Plans And Specifications, the quality or quantity of any material or workmanship; whether the materials or labour are adequate to carry out the work, and the timing and scheduling of various phases. d. Norcope will make good any defects within 12 months from the date of the certificate of Substantial Completion. e. If Norcope fails to comply with a decision or direction of the Engineer, the Engineer may use whatever methods he deems advisable to do what Norcope has failed to do and Norcope will pay all costs and damages incurred by Yukon. f.

Norcope may protest decisions of Yukon about changes in work or a decision by the Engineer by providing written notice of that protest. • Norcope agrees not to disrupt airport operations other than is as permitted by the Engineer and agrees to ensure safety of

the public and personnel. • The process for doing the rehabilitation is also specified and described in the

section of these reasons on How to Build an Airport Apron. • Defective PCC is defined by a list, which includes honeycombing, uncontrolled shrinkage cracking, other surface defects, damage by freezing, air content above or below specifications, a slab containing full-depth cracks, or if the joints are spalled. • Repair and restoration of defective concrete is to be directed by the Engineer and includes removal of defective slabs where appropriate. • Sawcutting and sealing of joints is particularized.

The June 11 Warranty Letter to Norcope [ 8 ] On June 11, 2014, Yukon sent Norcope a letter with respect to apparent settlement in the apron lean mix concrete. As a result, Yukon stated that Norcope was not responsible for subsurface conditions The letter provided Norcope would not be responsible for any vertical shifts due to seasonal fluctuations; and both Norcope and Yukon would investigate any cracking in the concrete panels. If a crack was shown to be caused by differential settlement, it would not be covered by the Norcope warranty to repair damage. [ 9 ] Mr.

Jansson testified the letter was intended to indicate Norcope would not be responsible for cracking caused by lifting. At the time the warranty letter to Norcope was signed, he said they knew the settlement was in the southwest area and that the lean mix had cracked. [ 10 ] Mr. Gonder testified he thought if Norcope met the specifications of the tender, then anything else that damaged the work would not be Norcope’s responsibility. He said he thought the letter was good enough to protect Norcope.

The Norcope/Tetra Tech Contracts [ 11 ] Tetra Tech contracted with Norcope to provide the mix design for the PCC on February 14, 2014. Tetra Tech also contracted to provide QC testing during construction to Norcope. That contract is dated May 9, 2014. The Yukon/Tetra Tech Contract [ 12 ] Tetra Tech contracted with Yukon to provide project inspection, material testing and quantity calculation services for the project, collectively referred to as QA.

That contract is dated April 13, 2014. (The contract was amended throughout the next year to include additional work because of the problems that arose with the project.) The Indemnity Agreement between Norcope and Intact [ 13 ] Norcope and Intact had an indemnity agreement whereby Norcope agreed to indemnify Intact from any claim made against it in an action. The Witnesses [ 14 ] Yukon called nine witnesses : • Geoffrey Petzold – Mr. Petzold graduated in engineering in 2006 from the University of Alberta and is currently pursuing his Masters Degree in engineering. After graduating, Mr.

Petzold worked for a number of engineering firms, primarily on airport projects. He has worked on several airports in British Columbia, Alberta, Northwest Territories, and Nunavut. He currently works for CIMA, an engineering consulting firm. He joined CIMA in 2016. During the apron project, he was the project manager for Tetra Tech. • Brian Crist – Mr. Crist works for the Yukon Transportation and Engineering Branch (“TEB”). He is a civil engineer.

He began his career in the lower mainland of British Columbia, worked in Inuvik, NWT, for 10 years, and then moved to Whitehorse where he first worked with the City of Whitehorse as manager of public works and then acting City Manager. He left the City to join TEB on April 21, 2015. • Kyle Jansson – Mr. Jansson has both a Bachelor of Engineering degree and Masters of Engineering degree. He now works for Public Works and Procurement Canada. He began working with Yukon in 2013 and reported to Terry Bidniak. Mr. Jansson was the project engineer on the Norcope contract. • Michael McFarlane – Mr.

McFarlane works for Tetra Tech. He was assigned to do the QA on the apron project. He prepared site observation reports (“SOR”) each day. • Terry Bidniak – Mr. Bidniak is a retired civil engineer. His last position was Manager of Highway and Airport design and Construction for the Yukon government. In this position, he reported to Paul Murchison. Until his retirement in April 2015, he was the Engineer of Record for the apron project. • Dr. Bozena Czarnecki – Dr. Czarnecki earned a degree in engineering geology and hydrology in Poland before moving to Canada in 1981.

She obtained a job at the University of Calgary in the Civil Engineering Department. She subsequently obtained her Masters and PhD at the University of Calgary. Her doctoral thesis was on concrete. Dr. Czarnecki began working for EBA Consulting in 1992. EBA eventually became part of Tetra Tech, where Dr. Czarnecki continues to work.

• Gordon Leaman – Mr. Leaman was qualified to give opinion evidence on all aspects of the specification, construction, and testing of PCC pavements, including airport aprons. • David Anderson – Mr. Anderson was qualified to give opinion evidence on all aspects of the design, costing, and construction of projects involving the rehabilitation of airport pavements, including the initial evaluation of pavement conditions. Mr. Anderson works for Associated Engineering, the company that designed the apron. • Steven Bartsch – Mr.

Bartsch was qualified to give opinion evidence on all aspect of the design and construction of projects involving the rehabilitation of airport pavements, including the initial evaluation of pavement condition, as well as on the costing of concrete pavement projects in Yukon. Mr. Bartsch also gave evidence on his role in the apron design. Mr. Bartsch works of Associated Engineering. [ 15 ] Norcope called seven witnesses and joined with Intact for its witness: • Dr. Amgad Hussein – Dr.

Hussein was qualified to give expert evidence on good engineering practices in conducting investigations of failure analysis and preparing reports regarding investigations of failure analysis. • Jon Schmidt – Mr. Schmidt was qualified to give expert evidence regarding construction cost estimation including estimating costs of construction using concrete materials and airport pavement construction. • Chadwyck Cowan – Mr. Cowan is a professional engineer, having obtained his engineering degree in Geological/Geophysical Engineering in 1998. Mr. Cowan is the manager of the Tetra Tech office in Whitehorse.

He appeared by way of subpoena and was cross-examined by Norcope. He was also called in rebuttal by Yukon. • Terry Hauff – Mr. Hauff, an experienced surveyor, worked with Challenger Geomatics Ltd. in Whitehorse. • Wayne Schofield – Before retiring, he was a self-employed contractor, including time in Whitehorse as president of Caniwi Enterprises. Caniwi was the general contractor for the rehabilitation of the apron in 1985. • Douglas Gonder – Mr. Gonder moved to the Yukon with his family when he was a child and has lived in the Yukon for all of his life.

He reached Grade 10 at school and then began working with his father. His father’s company grew, obtaining construction contracts with the city and the territorial government. After his father’s company failed, Mr. Gonder worked in mining for several years as well as working for himself in construction. He started doing shallow utilities projects such as street lighting. He then switched to deep utilities. In 1985, he started Norcope. Since its inception, Norcope has been involved in every type of earth excavation. Norcope had done numerous jobs placing concrete.

Norcope did the airport parking lot and the international extension to the airport building. Mr. Gonder testified that this is the only airport apron that Norcope has worked on. • John Beecher – Mr. Beecher is with General Enterprises. It is a concrete supply company. He does their sales and bidding work and manages placing and finishing the concrete. Mr. Gonder is his stepfather. [ 16 ] Intact called one witness and joined with Norcope for all witnesses except Dr. Hussein. • Scott Cumming – Mr.

Cumming was qualified to give expert opinion evidence regarding concrete and concrete construction, materials engineering, including airport pavement constructions, and quality control, quality assurance, concrete rehabilitation and troubleshooting for airport apron construction. The first report prepared for Intact was done by Mr.Russ Riffel. Between the preparation of that report and trial, Mr. Riffel retired, and Mr. Cumming took over. The Riffel report was attached to Mr. Cumming’s report and except for one small area of disagreement, Mr.

Cumming adopted that report. [ 17 ] Two individuals whose names are mentioned frequently throughout the testimony and documents are Miles Plaunt and Malik Lasker. Neither were called as witnesses. Mr. Plaunt was employed at Tetra Tech at the relevant times and did the mix design. Mr. Malik was employed by Norcope as the project manager for this project. One read-in from Daniel Qian will be referenced. Mr. Qian was employed by Tetra Tech. Reliability and Credibility of the Non-expert Witnesses [ 18 ] The balance of these reasons deals with the issues raised by all parties.

For the most part, I have incorporated the evidence of witnesses into the specific issue being addressed rather than going through a serial

summary of each witness’s evidence. In this

section are my impressions on the reliability and credibility generally of key witnesses, excluding the experts whose evidence is addressed separately. In the balance of these reasons, where reliability or credibility is key to a specific issue, it will be specifically dealt with. First, the Yukon witnesses: • Mr. Petzold was generally an honest witness. He did not recall many of the details about the project, but when taken to emails and other documents, he gave straightforward evidence. I was left with the impression that Mr.

Petzold was relying on others to ensure things were done properly and that may have been part of the reasons for the failings of Tetra Tech, which I discuss below. Although he was not qualified as an expert, I will address his evidence about some of the specific issues when I deal with expert testimony and the conflict-of-interest issue. • Dr. Czarnecki testified under a cloud of allegations made by Norcope that she had acted untruthfully, made false statements, and intentionally acted to blame Norcope for the failings of the apron. There were times during her evidence when Dr.

Czarnecki appeared defensive about what she had done and what she had written. Given the allegations, that reaction is not surprising nor did it interfere with her credibility. She admitted to some mistakes that she made in her analyses. Generally, she was a reliable witness in terms of giving straightforward answers to the questions that were truthful. As with Mr. Petzold, I will address her evidence when dealing with specific issues and the conflict-of-interest issue.

• Kyle Jansson has a poor memory of events, so I relied very little on his evidence. • Mr. Cowan was central to the Tetra Tech’s conflict of interest so what he did during the construction of the apron is in issue. However, he was reliable. Mr. Cowan did acknowledge that his opinion was that Norcope was a contractor that did not have the knowledge or experience for apron panel replacement work. Mr. Cowan and Mr. Beecher gave starkly different evidence on exchanges between the two about the payment of Mr. Beecher’s company’s invoices.

That issue is not key to the liability issues but assists in otherwise assessing their credibility. I accept Mr. Cowan’s evidence on that issue. • Mr. Crist arrived on the scene in April 2015, so he was not involved in the construction of the apron, but was central to drafting the Final Report. During his cross-examination, he was accused, by counsel for Norcope, of swearing a false statement, namely the declaration to Transport Canada that the apron was substantially complete.

In re-examination, it was abundantly clear that everyone knew that declaration was made subject to the construction issues that are central to this action. The attack on his character by Norcope counsel was unfounded. • The balance of the witnesses provided generally reliable evidence. [ 19 ] The Norcope witnesses: • Mr. Gonder gave evidence at two different times during the trial. On the first day of evidence, he was cross-examined by counsel for Yukon pursuant to Rule 18. He also testified during Norcope’s case. The fact that he testified at two stages of the trial is, itself, telling.

During the cross-examination at the beginning of the trial, he not only attempted to avoid answering reasonably direct questions, but the impression he attempted to leave was that nothing that went wrong with the apron construction was Norcope’s fault, even insofar as it may have been work done by one of Norcope’s subcontractors. When he testified as part of Norcope’s case, the theme was different. Essentially, Mr.

Gonder’s evidence was that this project was doomed to fail from the start, not only because of the failure to remove the frost-susceptible subsoil, but also because of a bad mix design provided by Tetra Tech. The subsoil issue was addressed in the warranty letter, but it left unexplained why Norcope continued to work when according to Mr. Gonder, the concrete mix was faulty because of Tetra Tech’s bad design. Mr. Gonder also attempted to leave the impression that Norcope had an otherwise stellar reputation and had no previous problems with its construction projects. However, under cross-examination, Mr.

Gonder acknowledged that in 2011, Norcope sued Yukon, and Yukon counterclaimed, on a project called Whistle Bend. Apparently, Norcope had parked several pieces of heavy equipment around the Yukon Legislative Assembly to block access, in protest of how Yukon was handling the project. Eventually the claims by Norcope and the Yukon counterclaim were settled. Mr. Gonder was an unreliable witness. In many instances, things he said or wrote that were clearly untrue were not, in my view, cases of lying.

Rather, he seemed to come to a view of what was happening, or ought to be happening, was clouded by his temperament and his desire to do the job quickly so Norcope could receive the early completion bonus. During his evidence, at times he seemed to have detailed complaints about Yukon and Tetra Tech but then when pushed on an issue, suggested that he only had a high-level knowledge about what was going on. His several threats to stop work or commence litigation belie any claim that Norcope was entirely an innocent victim of Yukon and Tetra Tech.

Additionally, his hyperbolic description of how the project was doomed from the start again attests to his unreliability. • Mr. Beecher exaggerated in the same fashion as Mr. Gonder. In one case, in terms of his dealings with Mr. Cowan, he lied. He was an unreliable witness. Reliability and Credibility of the Expert Witnesses [ 20 ] These comments relate to some of the expert witnesses who were key witnesses with regards to the liability issues only. For Yukon, that would be Mr. Leaman, Mr. Bartsch, and Mr. Anderson. The latter two gave evidence with respect to the design of the apron in 2014 and 2021.

They were reliable witnesses who held strongly to their opinion regarding the design. Mr. Leaman gave solid, reliable evidence on the general issues about the construction of an airport apron. I found his explanations of ‘how things were supposed to happen’ valuable in my overall understanding of the case. However, his evidence suffered from the fact he had not examined the apron and its deficiencies. His evidence was weak when he was challenged in some areas, which I attribute to the fact he only did a paper-based review of the issues. On occasion, his conviction regarding his opinion seemed unsure.

In at least one case, he reversed his opinion completely. As a result, I have taken care when considering his evidence. [ 21 ] Yukon proposed Dr. Czarnecki as a litigant expert. Dr. Czarnecki was the principal drafter of the report which Yukon relied upon to make a claim against Norcope. Yukon had planned to qualify Dr. Czarnecki as an expert witness but chose not to because of objections about her impartiality. No one disputes that Dr.

Czarnecki has expertise in concrete, but the defendants argued that as an employee of Tetra Tech, she was not impartial as required by White Burgess Langille Inman v Abbott and Haliburton Co , 2015 SCC 23 . Yukon said it would be difficult to meet the White Burgess test given the attacks upon Dr. Czarnecki by the defendants. As a result, Dr. Czarnecki gave evidence as a litigant expert. The question is what I can do with that expert evidence. [ 22 ] Kon Construction Ltd v Terranova Developments Ltd , 2015 ABCA 249 (“ Kon ”) , sets out three categories of witnesses with expertise at para. 35.

They are independent experts who are retained to provide opinions about the litigation but are not otherwise involved in the litigation ( White Burgess experts); witnesses with expertise who were involved in the events underlying the litigation but not litigants; and litigants who were involved in the events, but also have expertise. Dr. Czarnecki falls into the last category as she is employed by one of the parties, Tetra Tech.

The case also confirms that it is not necessary for a litigant expert to provide notice of his or her opinion, as is required with White Burgess experts, since as litigants they would be available for pre-trial examination. In this case, the lack of a requirement for some sort of pre-trial notice is even stronger. The report, and therefore Dr. Czarnecki’s opinions, have been available to the defendants since July 2015. [ 23 ] No one disputes that Dr. Czarnecki could give opinion evidence to defend the allegations made about her.

The issue is whether I can consider those opinions when deciding the underlying issues involving the work done on the apron. In Kon , one of the litigant experts was Mr. Klaver. Mr. Klaver provided opinions about the amount of material moved by the contractor. The trial judge relied on that evidence. The Court of Appeal did not interfere with the trial judge’s decision on that point. [ 24 ] In Newfoundland and Labrador (Indigenous Affairs and Reconciliation) v Newfoundland and Labrador (Information and

Privacy Commissioner) , 2021 NLSC 79 , Justice Boone was faced with an objection to affidavit evidence of two public servants that contained opinion evidence. After reviewing the Kon decision at length, Justice Boone said the following at para. 50: The exceptions from the Mohan analysis for litigant and participant experts developed because these categories of experts do not present the same perils as do experts retained to provide opinion in respect of the litigation: Westerhof, at paras. 74-86.

Litigant and participant experts do not develop their opinions after the litigation has started, and therefore they come to Court without the same inherent credibility problems as experts retained only to testify. There is no concern with the proliferation of an industry of experts who could potentially overwhelm the trial process.

The exclusion of these witnesses or the requirement that they be tested in accordance with Mohan criteria before testifying as to their opinion, could actually exacerbate, rather than reduce, the cost and time involved in trying cases. [ 25 ] In Saskatchewan v Racette , 2020 SKCA 2 , the court cautioned about the breadth of the participant witness exception.

The court stated the evidence should not be accepted without proper notice and formal qualification if “the testimony of such witness goes beyond his or her observations and involvement in the underlying facts, and beyond the opinions formed as part of the ordinary exercise of his or her skill, knowledge, training and experiences, while observing or participating in such events” (para. 61) [emphasis already added]. [ 26 ] Norcope argues the report of Dr.

Czarnecki was prepared in anticipation of this litigation and relying upon it other than to defend the claim against her would essentially be circumventing the Mohan process. It would “allow a pathway for prima facie inadmissible opinion evidence to be tendered and used without subjecting the author to the scrutiny necessary to [sic] they are a properly qualified expert” (Norcope brief). Additionally, they argue there are facts that are not true or exaggerated, not contained in any official record and conclusions are reached with no scientific basis. [ 27 ] I accept that Dr.

Czarnecki can be a litigant expert and that I can weigh her opinions when considering the issues in dispute. I do not accept the argument that accepting Dr. Czarnecki’s argument circumvents the Mohan process. Whether there are untruths or exaggerations or whether her opinions lack scientific basis will be dealt with below. The real difficulty I have with Dr. Czarnecki’s opinions is the conflict of issue that she and her colleagues at Tetra Tech were in. I have decided I must caution myself before accepting any evidence from Dr. Czarnecki because of the appearance of a conflict.

Therefore, when I do accept what she has said, it is done after a healthy period of reflection about how that conflict may affect the testimony. [ 28 ] Even though Mr. Petzold was not qualified as an expert, for the reasons immediately above regarding conflict of interest, I will be equally as cautious. An Overview of the Project [ 29 ] Tenders for the project were closed in January 2014. As the lowest bidder, Norcope had a tender review meeting with Yukon, after which the contract was executed.

In March, there were emails regarding the potential for a conflict of interest by Tetra Tech if they took on both the mix design and QA responsibilities for Norcope and the QC role for Yukon. Notwithstanding the concerns, the contracts identified above were concluded. Work on the project began with the removal of the old apron, levelling and pouring of the lean mix. In early June, the lean mix began to sink. As a result, Norcope and its subcontractors stopped work until a solution was found because of a concern they would be liable if the settlement of the lean mix contributed to other problems on the project.

On June 6, a meeting was held to address the lean mix settlement and on June 11, the Warranty letter was issued. [ 30 ] Pouring of the lanes began a few days later and continued into July. Mr. Gonder testified that as early as June 21, he had concerns about the way testing was done but did not say whether that was the QC or QA testing. No issue was raised about the quality of testing until late August and September 2014 in emails between Mr. Gonder and both Mr. McFarlane and Mr. Petzold. In late July, Dr. Czarnecki emailed Mr. Petzold to indicate the cores tested showed the concrete was not freeze-thaw durable.

All the concrete was poured by August 24, 2014. The contractual warranty period was one year so that Yukon needed to give notice to Norcope about deficiencies by August 24, 2015. [ 31 ] On August 23, Norcope submitted a claim for a progress payment. Mr. Petzold advised that payment would be withheld for 13 panels. Mr. Gonder told Mr. Petzold if one dollar was deducted from the invoice, he would start digging up the apron. On September 5, 2014, Mr. Gonder raised the conflict-of-interest issue regarding Tetra Tech making fair decisions. In an email exchange between Tetra Tech employees on this topic, Mr.

Petzold referred to Mr. Gonder as a ‘hot-headed contractor’. On September 11, 2014, Mr. Bidniak directed the replacement of 13 panels and said they would continue to investigate to determine if the cracking was due to sub-surface settlement. Mr. Gonder suggested drilling some core hole and asked to be present when the cores were drilled. Yukon did drill the holes, but Norcope was not present. Mr. Gonder testified the process was therefore unfair. Mr. Gonder said he offered to repair the cracks and did so. Yukon’s position at this time was set out in an email from Mr.

Bidniak dated September 15, 2014, which said in part: Government of Yukon acknowledge that there is still disagreement between us as to the cause of the cracking. Further deliberations will ensue in order to settle that matter. As stated previously, our position remains that the cracked panels must be replaced. In the interim, we have no objection to your sealing the cracks at your own risk and cost. … [ 32 ] Mr.

Gonder testified he thought the repair work Norcope did solved the problem. [ 33 ] Discussions continued into the fall and winter of 2014-2015 about the possibility of a joint Yukon/Norcope expert reviewing the project to provide an opinion about the causes for the failures. Ultimately, there was no such review. Norcope wanted to use the expert it previously had investigate and Yukon wanted someone newly appointed by both. Through this time there were also emails discussing the failures between Yukon and Tetra Tech. On November 5, 2014, Mr. Bidniak wrote to Mr. Petzold about the new geotechnical data.

In that email, he said in part:

The main thing I am hoping we can project is that we have considered all possibilities for cracking before drawing our conclusion. We will certainly be perceived (perhaps even by a Judge) as being fixed on late cutting, etc without adequately considering the contractor’s position (of settlement) if we don’t present both sides of the case. … [ 34 ] When Mr. Hauff sent the draft of the survey comparison between September, 2014 and April, 2015, Mr. Petzold replied that Mr. Hauff should not provide any

interpretation about the cause of cracking because the matter may go to arbitration. Mr. Crist asked Mr. Petzold for comment on his draft letter to Norcope that was sent on July 29, 2014. Mr. Petzold’s opinion then, and as it has remained, was that full replacement of the panels was ‘the way to go’. [ 35 ] On December 16, 2014, Mr. Bidniak sent the December Report to Mr. Gonder. Mr. Gonder challenged the results of that report. He said the concrete from the plant continually tested inaccurately, and nothing was done by Yukon or Tetra Tech.

The Condition of the Apron [ 36 ] On the first day of trial, I viewed the apron. At the time, my knowledge of the issues was limited to the pleadings and a review of some expert reports in connection with some pre-trial procedural issues regarding their admissibility.

Even to an untrained eye such as mine, the cracking in the concrete was obvious. [ 37 ] There are different kinds of cracks, which will be addressed below, but here are the types of cracks relevant here: - Reflective cracks are cracks that exist in the top layer of concrete (the PCC layer) because of a crack in a subsurface layer (here the lean mix).

The crack below reflects up and causes cracking above. - Dry shrinkage cracking occurs when water in the concrete evaporates from the concrete before the concrete is cured and joints are cut, the concrete shrinks and cracks result. - Other cracking can result from poor consolidation of the concrete. Consolidation is the process of vibrating the concrete after pouring to eliminate entrapped air. How to Build an Airport Apron [ 38 ] The plans and specifications detailed how the work was to be done. During construction, there were changes to the specifications, and some of those changes are matters at issue.

What follows is a description of how to construct an airport apron, and where relevant, indicate where changes were permitted. The issues regarding those changes are dealt with further on in these reasons. [ 39 ] After removing the old apron, the subsurface needs to be levelled. One of the most significant issues is whether frost-susceptible material should have been removed. That procedure was not in the specifications. After levelling the ground, a cement stabilizing base is installed.

Yukon agreed to a request by Norcope to change this specification to use a lean mix base. [ 40 ] Once the lean mix is poured, a bond breaker is applied. The bond breaker ensures that the PCC is able to move free of the lean mix, which in turn prevents stresses on the PCC which could cause cracking. There is an issue about the material chosen to be the bond breaker and whether it was applied as instructed. [ 41 ] After the bond breaker is applied, the frames are constructed for the PCC lanes.

The specification called for steel frames, but after some debate and discussion, Yukon agreed to a request by Norcope to use wood frames. Dowels are inserted. The purpose of dowels is to assist with load transfer, allowing the concrete to transfer load from one panel to another. There are two ways to insert the dowels. One is to place them before the PCC is poured. The other is to drill holes after the PCC is poured and insert the dowels. Although the latter process was specified, Norcope used the former which was ultimately agreed to by Yukon. [ 42 ] The mix design is critical to ensuring a good PCC.

The mix is first made at the plant, transported to the site, tested at the site, and then poured. The mix must pass three tests to be appropriate: a flexural strength test, an air content test and, on site, a slump test. Flexural strength measures the strength of the unreinforced concrete to resist cracking under pressure. The air content must be tested to ensure the concrete does not crack when frozen. These tests are done as part of the mix design process. [ 43 ] Once the concrete arrives on-site, a slump test in performed. That will tell how fluid the concrete is.

The test involves pouring some concrete into a cone-like structure and observing how much it slumps. If it is determined that the concrete is not fluid enough, admixtures (also called plasticizers) can be added. Adding water is not an acceptable method to increase fluidity. [ 44 ] Once the concrete is poured, it is consolidated. The equipment used to consolidate the concrete is called a screed. The choice of screed used by Norcope became an issue. Tetra Tech was consulted about Norcope’s request to use the specific piece of equipment that was eventually approved. Dr.

Czarnecki was concerned about its suitability but indicated that a test panel could be tried. There was no evidence before me that such a test was performed, but Yukon did approve its use. Once the concrete is consolidated, it is finished with a broom, textured, cured, and the joints are cut. It is important to cut the joints in a timely fashion so that the cracking is controlled. The joints are sealed.

The timing of these post-pour processes and the joint sealing are in issue. [ 45 ] The apron layout consisted of rows (sometimes called lanes), labelled from A to J in generally a south to north direction with A at the terminal side and J at the runway side. The panels along the row are numbered from 1 to 25, with 1 generally on the west side and 25 to the east.

In several iterations of diagrams prepared at the time of the construction, and as a result of this litigation, cracks are evident in the southwest quadrant, along Row H in the northeast quadrant, a continuous crack through Row B from 13 to 25, a continuous crack through Row I from 1 to 5 and then some small bits and pieces elsewhere. [ 46 ] Finally, during the construction of the apron, it is important to keep the area clear of foreign object debris (FOD) since FOD can

damage the aircraft which can be expensive and create a risk to human safety. Once the apron is completed, any failure of the concrete also can create a risk of FOD. The Subsoil and Geotechnical Data [ 47 ] A key issue is the state of the material below the apron. Under the contract, Norcope was not required to remove frost-susceptible material. There was no dispute that the soil was subject to movement. The issue is whether the apron as designed was able to withstand any such movement. [ 48 ] In 2010, Tetra Tech provided a geotechnical report regarding subsurface conditions of the apron.

The depth of silt varied across the six boreholes. The minimum depth of silt was in a borehole in panel C3 which is in the southwest corner of the apron. The silt was at 1.5-2.1 metres. Silt is frost-susceptible material. [ 49 ] In September 2014, a second set of four boreholes were taken. The minimum depth of silt was in panel A1 which is in the southwest corner. The silt was at 2.1-4.4 metres. Tetra Tech concluded the subsoil surface conditions encountered in 2014 were very similar to those encountered in 2010. The report was prepared by Chadwyck Cowan. Mr.

Cowan admitted in cross-examination that a conclusion in the geotechnical report of September 26, 2014, was in error when it indicated that there would only be minimal movement under panel C given that the silt was in fact shallow under that panel. [ 50 ] Wayne Schofield testified that for the former project the engineers required the removal of a thick layer of blue clay, which was then replaced and compacted. Mr. Schofield said they were about 70% through that process when the owners decided, for budgetary reasons, to cease the removal of blue clay. Ketza Pacific Contracting, Mr.

Scofield’s new company, also bid on the 2014 project. Mr. Schofield raised his concerns with Mr. Bartsch about the fact the tender did not require the removal of subsoil. Ketza was the second lowest bidder. In cross-examination he said in submitting the bid, he intended on fulfilling all the obligations under the contract, but also said he would be very vocal about the failure to remove the subsoil. He said without the removal of the subsoil he would have expected the project would fail. The Survey Results [ 51 ] Terry Hauff, now retired, was a survey engineer with Challenger Geomatics Ltd. in 2014.

Challenger had a contract with Tetra Tech to do survey work on the apron. Their job was to ensure the contractor had done the work properly as the work proceeded. [ 52 ] Once the work was complete, Challenger did a survey in September 2014. As Yukon wanted to monitor the movement, they did a second survey in April 2015, and a third in October 2015. The movement from September to April varied throughout the apron from a rise of 1 centimetre over a large part of the apron to 11 centimetres in the south westerly portion.

The comparison from April 2015 to October 2015 showed the portions with the largest rise had fallen the most, again around an 11-centimetre drop. Essentially, from September 2014 to October 2015 the apron had moved up in the spring and moved back to as-built in the fall. Mr. Hauff’s survey charts show the location of cracking. Most of the cracking is in the south-westerly portion of the apron, but there is one long crack that starts at the northwest corner and goes straight through Row B from panel 25 to 14 and then proceeds in a diagonal direction through panels 13- 10.

There is also a horizontal crack through panels 5-1 in Row I and a mostly horizontal crack in Row B from panel 12 through to 6. All of the other cracks are contained in individual panels. The Conflict-of-Interest Issue [ 53 ] Tetra Tech was the sole bidder for Yukon’s QA contract. In a tender review meeting on March 20, 2014, between Mr. Jansson for Yukon and Mr. Petzold for Tetra Tech, Mr. Jansson noted Tetra Tech also had a contract with Norcope for QC.

As a result, to receive the Yukon QA contract, Tetra Tech would need to provide independent teams with reporting and testing kept separate “as much as possible”. Mr. Petzold indicated the teams would be separate with different field technicians and senior reviewers. Mr. Jansson requested a letter “to demonstrate the two separate teams and describe the testing and reporting procedures”. [ 54 ] On March 24, 2014, Tetra Tech provided the letter requested by Mr.

Jansson, stating it acknowledged that “…there are perceived conflicts associated with providing QC testing services for the general contractor … while also being relied upon to provide QA testing services to Tetra Tech EBA’s Airports Group as part of their inspection contract.” It goes on to itemize the work Tetra Tech would be doing in its QA role.

It states the testing would be performed by technical staff at the Whitehorse office and there would be “…no overlap of personnel during testing (the same technician will not be performing QC and QA testing). …” The letter acknowledges that during construction, there would be equipment and staff overlap between the QC testing and QA testing, but assures Yukon of the rigour of its testing requirements. The letter states Tetra Tech would isolate the QA flexural strength beams and compressive strength cylinders from the QC concrete samples during the curing stage. The numbering systems would be different.

The letter concludes by saying: “It should be stated that if the lines of communication are open to all parties working on this project, the more transparent the QC/QA testing programs will become and hopefully a higher level of trust will be quickly established.” [ 55 ] Mr. Bidniak testified that he was concerned about the conflict of interest. However, Tetra Tech was the only firm with local testing facilities. He concluded there was no other option. He had Mr. Jansson inform Mr. Cowan that personnel and testing facilities were to be kept separate and that the operation of each unit was to be separate. Mr.

Gonder testified he knew that Tetra Tech would be providing QA services for Yukon, but no one asked Norcope for their consent. The Site Observation Reports (“SORs”) [ 56 ] Mr. McFarlane was the resident inspector for Tetra Tech performing its QA function for Yukon. Mr. McFarlane prepared the SORs each day. The SORs recorded what was going on on-site. The only documents that he was referred to during the trial were the SORs. They are clean, well-typed documents that would have been prepared on a computer. Sometimes there are photos appended to the SORs. Mr.

McFarlane was asked if he had notes that he took while he was observing the work but did not produce any. Mr. Jansson, as Yukon’s project engineer, received the SORs from Mr. McFarlane. Mr. Jansson said he would also receive information by phone and at construction process meetings. He would be on the site, sometimes daily and sometimes only once per week.

[ 57 ] At the end of trial, on one of the days set for argument, counsel for Yukon advised Mr. McFarlane had just contacted him and told him that he had come across a notebook containing notes from the time he was working on the apron. The book is entitled ‘Field Borehole Logs and Field Notes’. The dates of the notes are from July 15, 2014, to August 12, 2014. The book is handwritten and contains times, notes, and figures of various activities which happened on each day. Yukon and Norcope both created charts to show what was and was not transferred to the SORs.

These charts show there are additional notes in the field book such as temperatures and times for curing and cutting. For example, on July 15, 2014, it notes: “At 2:40 p.m., the workers had cured to C20 and textured to C18. At 3:50 p.m., the workers had cured to C14 and textured to C18.” On July 16, 2014, it notes “bleed water was seen at panel F21 at 12:40 p.m.” On July 20, it notes “Row “c”, no curing compound as of 8 am July 21”. On July 22, 2014, it notes “At 7:00 p.m. cut J23/J22”.

One of the issues is the fact the Final Report and its drafts contain times for certain processes like texturing and curing that are not contained in the SORs. [ 58 ] Counsel for the Defendants objected to any evidence from Mr. McFarlane about this notebook other than an affidavit which stated he had just found the notebook and which attached the notebook as an exhibit. They did not object to me making a reasonable inference that there were other notebooks used by Mr. McFarlane during the project, and they were now lost. [ 59 ] Mr.

McFarlane was asked about times for certain activities that were not noted in the July 8 technical memo. He could not recall whether he told Mr. Cowan about times that were not noted in the SORs. [ 60 ] In early July, after Row E was poured, cracks were identified in the row. Yukon asserted the cracks were identified prior to the start of joint cutting. The SORs for the relevant days state that Row E was poured (June 30 and July 1, 2014) and cutting in Row E (July 2, 2014). The first note in an SOR that referenced the cracks was on July 4 when Mr.

McFarlane noted “I talked with Geoff (Tt EBA) about cracks in panels E24, E22 and some surface cracking in panel E1. I told him it was hot the day it was poured and that it was sometime after texturing that the curing compound was applied”. In cross-examination, Mr. McFarlane was challenged about the fact that uncontrolled cracking was identified prior to starting the contraction joint cutting, according to the technical memo (2.2.4) but the SOR dated July 7 did not say the cracks were identified before cutting. Mr.

McFarlane testified he did identify those cracks before cutting. [ 61 ] Counsel for both Yukon and Norcope directed Mr. McFarlane to SORs to note specific things, including: • Norcope began to use wood forms and Mr.

McFarlane requested more QC testing because of rain; • the lean mix had been poured too high in Row G and 18 cracks in lean mix needed to be reinforced; • confirmed that Norcope was cleaning up FOD, instructions to Norcope regarding the application of bond breaker to dowels; • difficulties with the high slump; • dowels too close to construction joints; • testing each truck of PCC; • slump too high, but added water rather than plasticizer; • concrete out of spec because of high slump and low air content; • refusal to put in a bulkhead where pouring had to stop because of a power outage; • sides of PCC rows not sprayed with curing compound; • out of tolerance dowel bars, respraying bond breaker; • E2 and E3 were not straight so panel had a bow in it; and • the first day that he noted cracking in row E was July 4 th , when the pour and cutting had been done on July 1 st . [ 62 ] Mr.

McFarlane said some of the issues noted above were corrected by Norcope. He was not on the site 24 hours a day so did not see that bond breaker was sprayed twice. He was told it had been and had no reason to not believe what he was told. Meetings [ 63 ] Throughout the project, there were construction progress meetings. The points of note are: 1. Preconstruction meeting (April 24, 2014) – Norcope proposed an alternate kind of bond breaker. 2. Construction Meeting (May 7, 2014) – Tetra Tech was testing for vapour content of the soil but found no high concentrations. 3.

Construction meeting (May 14, 2014) – Mike Lasker asked that QA and QC surveys be done at the same time. Mr. McFarlane reported that he noted a soft spot on May 12 under panels 17-20 in Row A. By May 13, the area was retested and passed. 4. Construction Meeting (May 21, 2014) – There was discussion about replacing the steel form work with wooden forms. Wooden forms had been used and Mr. McFarlane noted that some of the forms had begun to twist. 5. Construction Meeting (May 26, 2014) –

a. There was a discussion about the two methods of inserting the dowels (explained above). The specifications called for the dowels to be drilled into the concrete, but Norcope wanted to place them before pouring. Mr. Gonder and Mr. Lasker noted that the drill method would affect the completion

schedule and using epoxy coated dowels would increase the cost. Mr. Bidniak noted that from a quick review of documentation, Norcope may have been given approval for the in-situ method. If further investigation proved that to be the case, and the in-situ method could not achieve the required results, Norcope may be entitled to compensation. b. There was also discussion about Norcope’s request to use wooden rather than steel forms. Mr. Lasker said that either wood or steel would meet that required performance criteria. If the use of wooden forms did not meet specifications, Norcope would make it right. Mr.

Gonder noted that they were having difficulty locating steel forms and that they would be more expensive. He confirmed Mr. Lasker’s statement that Norcope would ensure that contract requirements were met using wooden forms. 6. Construction Meeting (May 28, 2014) – Norcope was given permission to pour a test strip of 10 panels using wooden forms. Norcope asked to pour an entire row as the test strip. 7. The decision to permit Norcope to use the in-situ method of dowel placement was rescinded and Norcope was directed to drill and epoxy dowels into the concrete. 8.

Construction Meeting (June 4, 2014) – Nothing of note other than that the lean mix had all been poured and passed its 7-day test. 9. Construction Meeting (June 6, 2014) – Mr. McFarlane noted settlement of the lean mix occurring in the southwest corner. Mr. Jansson said that Yukon would provide a letter that Norcope would not be responsible for any vertical movement so long as the forms were set to grade and within tolerances. As Norcope and the subcontractors were concerned about the settlement, there was discussion about pouring PCC over cracked areas of lean mix.

The following statements are contained in the meeting minutes: a. Mr. Petzold said that the intent of the design was not to fix the subgrade issues but to bridge over top of it and that it was not surprising that cracking occurred, given the nature of the soil underneath. He said that no issues were being raised about the cracking of the lean mix because he was not surprised to see movement in the soil. b. Mr. Petzold said that if the forms were set to the design grades, the formwork crews would not be held accountable for any movement after they had been set.

He also said that he was willing to accommodate relaxing the vertical tolerance if the quality of the concrete met specifications. c. Mr. Jansson confirmed that Norcope would not be responsible for any cracking in the PCC if the cracking was determined to be from settlement issues. d. Mr. Petzold said that if any cracks should occur after the PCC had been poured during the warranty period, everyone would need to work together to determine whether it was caused by settlement or poor-quality paving. 10. Construction Meeting (June 11, 2014) – Mr.

McFarlane reported that random cores were taken, which passed testing except those in Rows I and J which had high air voids. Three more cores were taken in that area and they all failed. The area was removed and new lean mix was poured. Discussions about the dowelling process continued. 11. Construction Meeting (June 18, 2014) – Surveys showed that the slab had stabilized. 12. Construction Meeting (July 4, 2014) – Nothing of note. 13. Construction Meeting (July 16, 2014) – Mr. Jansson said that he had an updated memo about the investigation of cracking which he would send to Mr. Lasker.

Yukon stated that it required the cracked panels from Row E (22 and 24) be replaced. Yukon said that it was open to having the cracked panels in Row H repaired with an increase in the warranty period by four years. Otherwise, the panels would need to be replaced. Mr. Petzold said that the later the panels were replaced the more disruption there would be at the airport. Mr. Jansson said that any issues with inspections, questions, and concerns should be directed to him and Mr. Petzold and not directly and solely to Mr. McFarlane. 14. Construction Meeting (July 30, 2014) – Mr.

Jansson stated that Yukon was willing to explore repairing panels. It would be Norcope’s decision to repair the panels immediately or in the spring. He said that if the repairs failed, the panels would need to be completely removed and replaced. 15. Construction Meeting (August 6, 2014) – Mr. Gonder said that he would like to investigate the soil under the apron. He suggested drilling deeper than the lean mix to obtain soil samples. Mr. Gonder said that Tetra Tech could drill the holes but that he would like a third party to analyze the results. 16.

Construction Meeting (August 13, 2014) – Tetra Tech was reviewing the crack repair methods submitted by Norcope. Tetra Tech Reports [ 64 ] One of the issues in the case is the claim that Tetra Tech, through Dr. Czarnecki and Mr. Petzold, prepared reports that contained false information and conclusions. The key report is dated July 27, 2015 (the Final Report). It is the report which is the basis for Yukon’s claim against Norcope. There are drafts of this report and other reports appended to it. One of those appended reports is of particular importance.

Drafting of that report began early in July and was released in December 2014 (the “December Report”). In its closing argument Norcope says about the Final Report (called by Norcope the “Demand Report”): The Demand Report was prepared by Professional Engineers who were directly involved in the construction of the Apron and highly qualified in the engineering of concrete. The Demand Report was comprised of mistakes, falsehoods, exaggerations and unsupported

conclusions. It was false and misleading. The quantity and scale of issues with the Demand Report leads (sic) to the conclusion that it is not only a report that has no merit and cannot be relied upon, but that it was drafted for the deliberate purpose of affixing Norcope with complete responsibility for replacing 100% of the Apron while ensuring that nothing and no one else would hold any responsibility for it. [ 65 ] As a result of these allegations: the process for preparing the report and its drafts; the appendices and the authorship of the report; and its draft are themselves in issue.

The construction issues contained in the report are dealt with elsewhere in these reasons. [ 66 ] The first draft of the December Report was a memo dated July 8, 2014, to Mr. Jansson from Mr. Cowan and Mr. McFarlane entitled ‘Concrete Apron Panel Placement Assessment – Field Observations’. The memo describes the process for PCC pouring in Lanes (also referred to as Rows) G, I, E and H and site observations of cracks.

The conclusion in part says, [b]ased on previous experience and knowledge with concrete apron panel placement projects and from the project information listed above, Tetra Tech EBA has concluded that the uncontrolled cracking, identified in the panels for Pilot Lane E and Fill-in Lane H, is unlikely the result of settlement or movement and likely the result of improper finishing techniques, in particular delaying the cutting of the contraction joints. [ 67 ] For each of the lanes, times are identified for the start of the pour, start of texturing and curing, and start of contraction joint cutting.

The air temperature is also noted. When the times in this first draft are compared to the SORs for the relevant days, there are times in the draft that are not in the SORs. Mr. Cowan was crossed examined extensively about this report. He said he and Mr. McFarlane worked together to put it together by reviewing the SORs and discussing the contents. He said everything in the report would have been because of discussions with Mr. McFarlane. He was asked more than once whether he fabricated the information in the report and he denied doing so. [ 68 ] The next draft of the December Report is dated July 14, 2014.

The draft is from Mr. Cowan, Mr. McFarlane, and Dr. Czarnecki and addressed to Mr. Jansson. This draft incorporates the times that had been contained in the July 8 th version. In this version, there is a comment that there were cracks discovered in two panels in Pilot Lane E. The report says the cracks were identified prior to starting the contraction joint cuts. Mr. Cowan agreed the notation about cracking in those panels did not appear in an SOR until two days after cutting.

At one point, he said he did not have any memory of the discrepancy between the date of the notation and the fact that it was made two days after cutting. He also said it must mean the notation was incorrect. The conclusion states the cracking in E and H was not due to settlement or movement, but delayed application of the curing compound when evaporation rates were high. It further states delayed cutting of contraction joints most likely caused the shrinkage cracking. For Lanes G and I, because of the high evaporation rates, the report concluded there was the possibility of shrinkage cracking. Mr.

Cowan said those conclusions were drawn as a result of discussions with Dr. Czarnecki and Mr. Petzold. [ 69 ] The next draft of the December Report is dated September 9, 2014. It is no longer in the form of a memo, but a draft report. This draft was prepared by Mr. Cowan, reviewed by Mr. Petzold and approved by Dr. Czarnecki. This report and the final December Report (issued December 12, 2014) repeated the information included in previous drafts in addition to more information.

Although the information for each of Lanes G, I, E and H are different, the narrative of one is reflective of the types of changes made to them all. For Lane G, the July 8 memo reads: Pilot Lane G was completed on June 21, 2014. The pour started at 10:15 am and was completed at 9:30 pm. The air temperature ranged from 7 to 17 degC, windy and mainly clear of clouds. Surface texturing started at 12:30 pm and curing application started at 2:00 pm. Contraction joint cutting started around 12:00 pm an June 22. 2014. [ 70 ] The final

section on Lane G reads: Pilot Lane G was completed on June 21, 2014. The pour started at 10:15 a.m. and was completed at 9:30 p.m. The air temperature ranged from 7 to 17 o C, windy and mainly clear of clouds. Surface texturing started at 12:30 p.m. and curing application started at 2:00 p.m. A delay between surface finishing operations and the curing compound application was 4 hours (surface finishing started at 10:15 am). During that length of time the concrete surface was exposed to high evaporation rates (defined as significantly higher than 0.5 kg/m2*hr) without any protection.

In addition, the edges of the panels were not sprayed with the curing compound at all after the forms’ removal, leaving the sides of the concrete unprotected. Contraction joint cutting started around 12:00 p.m. on June 22, 2014 – 26 hours following start of the paving operation. The calculated evaporation rates obtained from historical data during June 21, 2014 pour are plotted below. [ Here a chart is inserted ] The evaporation rates were higher than 0.5 kg/(m2.

h) and a delay in curing of concrete combined with the unprotected sides of the Lane G may lead to a high potential for cracking. It should be noted that while there was no cracking observed at the time of writing this memo, the contributing factors mentioned above indicate a significant potential for cracking to appear.

[ 71 ] Mr. Petzold was cross-examined about the times set out in the December Report and asked to reconcile some of the statements made. Mr. Petzold did admit that some of the times set out in the report were not noted in SORs. He said there would have been conversations with Mr. McFarlane but he had no recollection about specific conversations about information that was in the report but not in SORs. Mr. Petzold testified that Mr. Bidniak likely provided comments that resulted in some of the changes between the initial memo and the December Report in its final form.

However, before including any of the comments, Tetra Tech would have evaluated them. [ 72 ] The Final Report had several attachments: • elevation and cracking charts, two site instructions, a memo from Petzold to Czarnecki, cc Habibova regarding the speed screed; • the December Report, borehole logs, the September Geotechnical Report, Borehole logs and soil test results, the Voigt Paper; • survey data and a concrete core examination report dated July 27, 2015 (a renamed final copy of the draft report attached to the December report with photos and laboratory test results attached). [ 73 ] Mr.

Petzold testified that the purpose of the Final Report is set out in the last paragraph of the Executive

Summary which reads: … The causes of the concrete failure are identified, and the feasibility of repairs and/or replacement of the panels is assessed. The potential impact of the current condition of the apron and the impact of the safety of the operations is discussed. [ 74 ] In addition to these reports, Mr. Petzold and Dr. Czarnecki issued a Technical Memo on August 22, 2014. The purpose of the memo was to assess possible crack repair products for the full panel thickness cracks because of the assessment done on July 8, 2014, of Lanes E, G, H, and I.

The memo concluded that none of the products were suitable for the apron surface. The memo recommended either replacement of the panels; or repair using one of the products listed or a flexible joint sealant, with this second method at the contractor’s risk and with the approval of the airport operator. [ 75 ] Mr. Petzold’s evidence about the December Report generally was that he relied on the information provided in the report and when he had questions about specific items, he would ask.

He did admit that to draw some of the conclusions about timing of certain processes during the PCC pour, there would need to be more information than was contained in the SORs. However, he did not recall specific conversations when that additional information was supplied. With respect to the reference to cracks in Lane E identified prior to cutting even though the SOR that contained the information was dated after the cuts were made, Mr. Petzold had no specific memory of discussions he may have had with Mr. McFarlane, but repeated that if he needed more information, he would have picked up the phone.

He disagreed when challenged that the allegations of excessive delay between steps were false. With respect to the September 9 draft, Mr. Petzold believes they set up a call to discuss questions that Mr. Bidniak had regarding the contents. He said by this time they had concluded the cracking was because of Norcope’s deficient work; even though Mr. Bidniak wanted to be sure they considered everything. He said Mr. Bidniak’s comments would have been considered in drafting the final version of the December Report, but the conclusions were Tetra Tech’s. [ 76 ] Dr.

Czarnecki said some of the contents in the Final Report. written by Mr. Cowan, were incorporated into

section of reports authored by her. Dr. Czarnecki was challenged on why she signed and stamped the September 2014 version of the report when she had only written portions. She said she wrote portions and approved the balance of the report. She said by signing as a professional engineer, she is responsible for the report. The September draft ultimately became the December Report which was issued for use and became an appendix to the Final Report. Dr. Czarnecki was asked why she did not sign the December report. She speculated that she may have been unavailable at the time. [ 77 ] Dr.

Czarnecki was cross-examined extensively about the narrative in the December Report concerning the four Lanes. She testified that she wrote the portion of the report dealing with the field inspection and the weather conditions. She said because of the developing cracks, Tetra Tech decided to look at weather records to see whether the site conditions called for additional action. There is a guide that provides evaporation rates for concrete. The exterior of concrete dries much faster than the interior of the concrete and that differential can lead to dry shrinkage cracking. Dr.

Czarnecki’s concluded that for each lane there was a delay between surface finishing and the application of the curing compound. She concluded there was exposure to high evaporation rates without any protection and the edges of the panels had not been sprayed with curing compound once the forms were removed. Dr. Czarnecki was asked whether she was aware that Mr. Gonder had threatened litigation at the time that she was preparing the report. She said she was not. Dr. Czarnecki did know the purpose of the report was to use in discussions regarding deficiency mitigation with Norcope.

The Editing of the Final Report [ 78 ] When Mr. Crist took over in May 2015, his goal was to obtain the final Tetra Tech report so Yukon could present it to Norcope. As the work was finished on August 24, 2014, August 24, 2015, was a critical date. After that date, there would be no warranty on the work. Mr. Crist said when he walked the apron, the deficiencies were very clear to him. On June 15, 2015, Mr. Crist received a draft of the report. He reviewed it and then sent detailed comments to Mr. Petzold and Dr. Czarnecki itemizing several issues where he was looking for clarification.

Another draft was forwarded on June 23, 2015, and Mr. Crist again sent back comments and pressed Tetra Tech for the final report. At that time, he drafted a letter to Norcope so he could immediately begin discussions with Norcope about the

deficiencies once he had the final report. In the meantime, there was an email exchange between Dr. Czarnecki and Mr. Jay, an engineering trainee at Yukon, which included Mr. Crist and Mr. Petzold about new cracking at the airport. Dr. Czarnecki indicated the new cracking was typical for crazing or map cracking that is related to inadequate or delayed curing. She indicated since there was evidence that the slumps were too high and the surface wet and poorly finished, this would be expected. She finished by indicating that this potentially affected 100% of the work. Mr.

Crist said that when he read that email, bells started to go off that the apron may require 100% replacement. [ 79 ] The next draft of the report is dated July 13, 2015. Mr. Crist and Mr. Toleman, also of Yukon, suggested edits to this draft. Norcope argues the fact Mr. Crist and Mr. Toleman suggested edits that were then adopted by Tetra Tech is evidence that is part of the scheme to intentionally interfere with Norcope’s relationship with Yukon. Mr.

Crist testified that his comments and edits were intended to make the report clearer and more comprehensive so he would be able to discuss the results with Norcope and Intact. Mr. Crist knew the report was not going to be well received by Norcope and discussions were going to be turbulent. The edits are: 1. In the draft executive

summary, Tetra Tech had written: “Prior to commencing construction, several changes were requested by NORCOPE to accommodate the construction methodology and materials available to them that were non-compliant with the project specifications. As the changes were reviewed, it became evident that the quality of the final product, i.e., the apron, may be compromised by the requested changes.” Mr. Crist’s comment was that that was a strong statement, and “may suggest that by YG allowing the changes essentially created the failures.

My understanding is that the [sic] it was a performance-based specification and that NORCOPE was advised that the final product may be affected by the requested changes but they took that risk and proceeded anyway. Suggest re-wording to make this clear.” The final report made a slight change to the first sentence and then said “The changes were reviewed and NORCOPE was advised by GY that the final product might have been compromised.

Ultimately, since the specification was performance-based, it was understood that the contractor was accepting the risk associated with the selected construction methodology and the impact on the quality of the final product.” Mr. Crist testified that he later learned that the contract was not performance-based. 2. In the

section dealing with seasonal elevation change, the draft said: “The survey conducted in April 2015 indicated that the southwest portion of the apron experienced elevation gain and the largest gain was concentrated in the area between Line B and Line D and rows 5 to 7 with one crack in Panel C-6 that can be possibly attributed to the elevation change. ” The last phrase, highlighted here, was not in the final draft. Mr. Crist said that he did not remember discussing the deletion with Tetra Tech. He does not recall asking them to remove it. He agreed that the omitted comment does conflict with what is said in #10 of the Executive

Summary. 3. In #10 of the Executive

Summary, the draft said: “The seasonal elevation changes potentially caused by frost heave were monitored and there is no evidence that the panel movement contributed to the cracking noted on the apron.” Mr. Crist commented that Norcope would be using elevation change as its main argument, and the report needed to reinforce the conclusion that the cracks were not caused by heaving. He then said: “In discussion with Geoff and Bozena you acknowledged the seasonal elevation but stated that if the Apron was constructed properly it would withstand the shifting ground and would not crack.

This should be confirmed within the report.” The final report added “Cracking of the panels is consistent with the shrinkage cracks, reflective cracking and crack propagation with time. The changes in the direction of the propagating cracks are influenced by high friction and bonding to the LMC base.” In cross- examination, Mr. Crist acknowledged that Tetra Tech never told him that they did not design the apron and they did not know how much vertical movement the apron could withstand. 4. There is also the notation by Mr. Toleman asking who approved the bond breaker. [ 80 ] Mr.

Petzold testified he did not recall telling Mr. Crist if the apron was properly constructed, it would not crack notwithstanding elevation changes, but that was Tetra Tech’s opinion. Mr. Petzold said the change to the report included the statement that it was a performance-based specification which was done at the request of Mr. Crist. With respect to the removal of the phrase regarding the crack in Panel C, he first said he did not know why it was removed, nor did he recall any discussions about removing it. He said the phrase would have been removed because of a re-evaluation by Dr. Czarnecki.

He did not agree that one crack could result in a conclusion that all of the cracking was caused by frost heave, given the size of the apron and the number of other cracks. He agreed Tetra Tech did not add a statement that if the panels were built to specification, they would withstand cracking, as requested by Mr. Crist. However, there was wording added to #10 of the Executive

Summary that the cracking was consistent with shrinkage cracks, reflective cracking, and crack propagation. However, he admitted, that at the time of testifying, the crack in C is some evidence of it being caused by seasonal movement. Mr. Petzold did know the report was going to be used to make a claim against Norcope. He acknowledged the report said nothing about Tetra Tech’s QC role for Norcope, nor Tetra Tech’s role in the mix design, nor Tetra Tech’s involvement in the bond breaker choice. [ 81 ] Dr. Czarnecki agreed she made the changes requested by Mr. Crist in the executive

Summary (No.1 above). She said the changes in no way affected her engineering conclusions. She testified there is never one reason for any failure and crack development is one of those situations. When she included the notation about panel C6 in the draft, it was because that possibility could not be omitted even if it is a remote possibility. As she was writing the report, she said more information was coming out. Because she had doubts about the possibility that elevation change contributed to the C6 cracking, she removed it from the final version.

It was her decision as an engineer to remove the section, in light of the above, to delete the reference. Dr. Czarnecki said when she told Mr. Crist if the apron was constructed properly to withstand the shifting ground, it would not crack, she believed the statement to be true. Dr. Czarnecki said the elevation changes due to soil conditions are not unique to Whitehorse. From her previous experience in Calgary, where she dealt with the same seasonal changes, there was no evidence that the cracking of the apron was related to seasonal changes.

Controlled cutting as part of the finishing process would mean that any elevation change would be uplifted at the joint and then go back down. She said that she could not reconcile the type of cracking on the apron with elevation change. She said that the cracks were not caused by frost heaves but were exacerbated by them. Dr. Czarnecki said that she maintains this opinion. [ 82 ] Dr. Czarnecki said as part of the engineering analysis, she included all possible causes of the cracking and then excluded the least probable. Then she considered all the information she had, including the information from Mr. Jay.

She concluded that elevation change was the least likely cause of the cracking in panel C6.

[ 83 ] Dr. Czarnecki had asked Mr. Jay to inspect specific areas as there were areas of high uplift that cracked and areas of high uplift that did not crack. She concluded where there was cracking, it was exacerbated by the presence of movement but was caused by something else. She withdrew the comment about C6 because it is impossible for one panel to crack because of uplift and not another one. Her opinion is there were several contributing causes for the cracking. [ 84 ] In preparing the drafts for the Final Report, Dr.

Czarnecki knew it was the intention of Yukon to use the report for discussions about deficiency mitigation with Norcope. She agreed Mr. Crist indicated how the report was to be structured in terms of tying the deficiencies to long term operation and safety of the airport. [ 85 ] Dr. Czarnecki was taken to the draft that had comments from Mr. Crist and Mr. Toleman. She says the comments by Mr. Crist about this being a performance-based contract were not part of her investigation. Those comments were separate from the engineering recommendations and decisions. It was part of the background information. [ 86 ] Dr.

Czarnecki said the changes made between the July 13 and the July 27 report were not necessarily because of new information but rather a result of a review of the available information and her assessment of that information. In terms of removing the information about C6, she looked long and hard to make a final decision. She said never in her career has she changed her technical opinion at someone’s request, and it did not happen here. [ 87 ] The Final Report concludes with a

summary of deficiencies as follows: • lack of bond breaker which contributed to cracking, and affecting 100% of the panels; • poor concrete consolidation, affecting 100% of the panels; • inadequate air void characteristics, caused by lack of production controls and QC testing, affecting 100% of the panels; • improper joint installation, causing an accumulation of dirt and sand, contributing to high FOD risk, affecting 100% of the panels; • joint ravelling which would continue to deteriorate and cause risk of FOD, affecting 30% of the panels (Norcope notes that joint ravelling is not listed in the Plans as a condition which would cause the concrete to be defective); • poor surface finishing, combined with lack of freeze thaw durability, would contribute to surface paste loss, affecting 100% of the panels; • panel cracking, affecting 58 panels. [ 88 ] Mr.

Crist testified that he hoped that Yukon and Norcope could work together to address the deficiencies. The Criticism of the Final Report [ 89 ] Norcope alleges the Final Report contained falsehoods and was prepared deliberately to point blame at Norcope.

Norcope says the following items prove their assertion: • the phrase “with one crack in Panel C-6 that can be possibly attributed to the elevation change” was removed from the Final Report; • there was no mention that Tetra Tech recommended the bond breaker that was used; • the misstatement that this was a performance-based contract and that Norcope was accepting the risk associated with the selected construction methodology and the impact on the quality of the final product; • it did not say that Tetra Tech did the mix design; • it did not say that Tetra Tech was contracted to do QA for Norcope; • there were misstatements or falsehoods about the information in the report, including the timing of certain activities, how many layers of bond breaker were applied, and that cracks were identified in SORs after the panels were cut, but alleged that the cracks appeared before cutting; • There were mistakes about whether certain equipment was approved for use. [ 90 ] Yukon also responded to an undertaking given during the examination of Daniel Qian.

He had been asked what Tetra Tech knew about the vertical movement. There were two questions and answers as follows: Q Advise if Tetra Tech is now aware of how much vertical movement the apron was designed to withstand due to frost heave and, if so, when it beca

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