Court of Appeal for Ontario

Date: 2004-05-12
Docket: C39382

Re:
Deman Construction Corp. (Plaintiff/Respondent) v. Magna International Inc. (Defendant/Appellant)

Before:
Doherty, Laskin and Feldman JJ.A.

Counsel:
Dennis M. O’Leary for the appellant
Anne Kennedy for the respondent

Heard:
May 6, 2004

Released Orally:
May 6, 2004

On appeal from the judgment of Justice MacKenzie of the Superior Court of Justice dated November 4, 2002.

Endorsement

[1] We read the trial judge’s reasons (paras. 24 and 36) as holding that adjustments to the contract price based on additional excavation and haulage costs were to be governed by the letter of June 3, 1997, which specifically anticipated those adjustments, and not by the terms of Article 12 of the contract, which governed work changes in general. We agree with this interpretation. The conduct of the parties at the time is entirely consistent with the trial judge’s interpretation.

[2] The letter provided that the charges for excavation and haulage would be “adjusted” if more than the anticipated number of truck loads had to be removed from the construction site. The bid form, which was also part of the contract, provided that “the unit prices attached as Schedule A will govern adjustments to the work” [emphasis added]. Schedule A set out various unit prices and provided that those prices could be used by the contractor in computing the value of additions to the contract. The respondent invoiced the appellant for additional excavation and haulage costs based on those unit prices. Since we are satisfied that Article 12 of the contract did not apply, the respondent was entitled to use the unit prices set out in Schedule A to quantify the adjustment necessitated by the extra excavation and haulage.

[3] Counsel for the appellant conceded in this court that the respondent was entitled to compensation for the extra excavation and haulage, but argued, relying primarily on Article 12 of the contract, that the respondent’s compensation should be based on his costs plus 10 per cent. Counsel further argued that the trial judge had improperly interfered with trial counsel’s cross-examination as to the respondent’s costs.

[4] We are satisfied, as indicated above, that Article 12 of the contract does not apply. Consequently, we must reject the argument that the respondent’s compensation should have been determined according to the costs plus 10 per cent provision in that Article. We also cannot agree that the trial judge improperly interfered with cross-examination. The argument that the respondent’s compensation should be determined on the basis of his costs plus 10 per cent was not pleaded and was not advanced at trial. The appellant’s argument at trial was that the respondent was entitled to nothing.

[5] For the reasons set out above, we would dismiss the appeal with costs to the respondent in the total amount of $10,000.00.

“Doherty J.A.”
“John Laskin J.A.”
“K. Feldman J.A.”