COURT OF APPEAL FOR ONTARIO
CITATION: Bruell Contracting Limited v. J. & P. Leveque Bros. Haulage Limited, 2015 ONCA 273
DATE: 20150421
DOCKET: C57554
Feldman, Watt, and van Rensburg JJ.A.
BETWEEN
Bruell Contracting Limited
Respondent (Plaintiff)
and
J. & P. Leveque Bros. Haulage Limited and Her Majesty the Queen in Right of Ontario, as represented by the Ministry of Transportation Ontario
Appellants (Defendants)
AND BETWEEN
J. & P. Leveque Bros. Haulage Limited
Respondent (Plaintiff)
and
Her Majesty the Queen in Right of Ontario, Earth Tech Canada Inc. now doing business under the name of AECOM Canada Ltd., Bruell Contracting Limited and McAsphalt Industries Limited
Appellant (Defendants)
Counsel:
Ronald Carr and Fatema Dada, for the appellant
Jeffrey S. Percival, for AECOM Canada Ltd.
Charles Loopstra and Daron L. Earthy, for Bruell Contracting Limited
Tom Corbett and Marcia Oliver, for J. & P. Leveque Bros. Haulage Limited
Heard: June 17, 2014
On appeal from the judgment of Justice David J. Nadeau of the Superior Court of Justice, dated July 25, 2013, with reasons reported at 2013 ONSC 1985 and additional reasons reported at 2013 ONSC 6676.
Feldman J.A.:
Overview
[1] This action arose out of a road surfacing contract between the Ontario Ministry of Transportation (“MTO”) and the contractor, J. & P. Leveque Bros. Haulage Limited (“Leveque”). The contract was administered by the MTO and by Earth Tech Canada Inc., now AECOM Canada Ltd. (“AECOM”). AECOM was also the Highway Designer.
[2] Between September 24, 2007 and October 1, 2007, Leveque and a sub-contractor, Bruell Contracting Limited (“Bruell”), constructed a double lift surface treatment on Hwy. 575 near Verner, Ontario. Shortly after completion, the surface treatment began to show signs of failure. The MTO required Leveque to remove the initial surface and reapply it, then refused to pay for that work.
[3] The two liability issues at trial were (i) who bore responsibility under the terms of the contract in the event of a performance failure, and (ii) what caused the surface treatment to fail. The MTO alleged that Leveque was responsible because, although Leveque used materials specified in the contract, it did not test the compatibility of the specific products it sourced. The MTO’s position was that the resulting incompatibility of the materials caused the failure.
[4] The trial judge found that the contract was a “method specification” contract, under which the contractor was not responsible for performance failure provided it followed the contract specifications, which in this case Leveque did. He also found that the primary causes of the failure were high binder application rates prescribed by the MTO, weather, and the heavy truck traffic that MTO allowed on the road before the surface had fully cured. The incompatibility of the resurfacing materials used was at most a contributing factor. The trial judge rejected the opinion evidence of the MTO’s expert witness, in part because he found improper conduct by counsel who instructed the expert and obtained his report. The trial judge also found that MTO personnel had acted improperly in a number of ways in their dealings with Leveque in regards to the remediation of the problem. The trial judge awarded full indemnity costs to Leveque because of his findings of misconduct by MTO personnel, including MTO counsel. He awarded mixed partial and substantial indemnity costs to Bruell. He also made the MTO responsible for AECOM’s costs on a partial indemnity basis through a Sanderson order.
[5] The MTO appeals the trial judge’s interpretation of the contract, his findings regarding the cause of the failure of the surface treatment, his findings of misconduct by the expert witness and counsel, and the costs awards.
Facts
[6] Under Contract 2007-5182, awarded by the MTO to Leveque on June 19, 2007, Leveque and its subcontractor Bruell constructed a “double lift surface treatment” on 17.9 kilometres of highway in northern Ontario. The surface treatment was applied from September 24, 2007 to October 1, 2007. By October 10, 2007, there were visible signs of deterioration. When Bruell observed these problems, it ordered sanding of the highway surface in order to minimize damage, but the MTO directed that the sanding be discontinued.
[7] Through a work directive, the MTO required Leveque to remove the surface treatment, which it did on November 18, 2007. Leveque completed the reapplication of the surface treatment in June 2008 under protest. The MTO refused to pay for the costs of the removal of the initial installation and for the second surface treatment, resulting in the action under appeal.
[8] The contract documents are extensive. The parties called expert evidence on the issue of the characterization of the contract to assist the trial judge in interpreting the contractual terms with which the experts had familiarity. Leveque’s position was that the contract is a “method specification contract”, where the owner specifies every aspect of the project and the contractor performs exactly as specified. The MTO position was that the contract is a “mixed specification contract” with many “performance elements”, which allocated responsibility for the “means and methods” of the project and for quality control to the contractor.
[9] The MTO relied on the General Warranty provision GC 7.17, which provides:
GC 7.17 General Warranty
.01 Unless otherwise specified in the Contract for certain materials or components of the Work, the contractor shall be responsible for the proper performance of the work only to the extent that the design and specifications permit such performance.
.02 Subject to the previous paragraph, the Contractor shall correct promptly at no cost to the Owner defects or deficiencies in the Work which appear prior to and during the period of (12) twelve months after the date of completion of the Work set out in the Completion Certificate or such longer periods as may be specified for certain materials or components of the Work. …
[10] The MTO also referred to GC 7.01.03, “Control and Responsibility”, which stipulates:
GC 7.01.03 Control and Responsibility
.01 The Contractor shall have complete control of the Work and shall effectively direct and supervise the work so as to ensure conformity with the Contract Documents. The Contractor shall be responsible for construction means, methods, techniques, sequences and procedures and for coordinating the various parts of the Work.
.02 The Contractor shall have the sole responsibility for the design, erection, operation, maintenance and removal of temporary structures and other temporary facilities and the design and execution of construction methods required and their use.
.03 Notwithstanding paragraph 02) of clause GC 7.01.03, Control and Responsibility, where the Contract Documents include designs for temporary structures and other temporary facilities or specify a method of construction in whole or part, such facilities and methods shall be considered to be part of the design of the Work, and the Contractor shall not be held responsible for that part of the design or the specified method of construction. The Contractor shall, however, be responsible for the execution of such design or specified method of construction in the same manner that the Contractor is responsible for the execution of the Work.
[11] As explained at trial, surface treatments are applied in layers of binder and aggregate, which are then rolled in order to bond the emulsion and the aggregate together. The contract provided that the surface treatment would consist of spraying the highway surface with a binder or liquid asphaltic emulsion, specified as HF-150S, which was suited for late-season application, in combination with Class II aggregate.
[12] The MTO’s position was that the failure of the highway surface was caused by the incompatibility of the specific Class II aggregate that was chosen by Leveque and the specified binder. There was no compatibility test required under the contract. However, the MTO submitted that there was an implied term in the contract that the aggregate selected would be compatible with the binder. Therefore, Leveque was obliged to conduct testing on the products to ensure their compatibility, and their suitability for the purpose of the project, before using them. Because Leveque did not undertake any compatibility testing, the MTO’s position was that Leveque was responsible for the failure under the General Warranty provision.
[13] Subsequent testing showed that the binder and the chosen aggregate required the addition of an anti-stripping additive in order to be compatible. Leveque pointed to evidence that such additives were not approved by the MTO. In any event, the chosen aggregate and the binder were tested by the MTO and passed all the tests required by the contract specifications.
[14] Leveque’s position was that the early deterioration of the surface was caused by excessive application of the binder, as directed by the MTO; by wet and cool weather conditions, which extended the curing period of the surface; and by heavy truck traffic that the MTO allowed on the highway before the surface was cured, which led to the creation of potholes and deterioration. Leveque submitted that the damage was exacerbated by the MTO’s cancellation of the sanding ordered by Bruell and its refusal to impose a load restriction following the initial signs of deterioration.
The Trial Judge’s Reasons
(1) Interpretation of the contract
[15] The trial judge first addressed the issue of the proper interpretation of the contract. The MTO called expert evidence from Dr. Maher of Golder Associates Ltd. (“Golder”), whose expertise included all aspects of surface treatment projects including contract preparation. His evidence was that, although the MTO conducted quality assurance on the aggregate and the binder, it was the contractor’s responsibility to deliver a surface that met the performance requirements under the 12-month warranty provision. He also testified that there had been increased downloading of such responsibility on contractors in circumstances where they choose the aggregate themselves.
[16] The respondent Leveque called evidence from David Peshkin, who was qualified as an expert in all aspects of road surfacing and on “surface treatment contract document preparation.” Mr. Peshkin’s opinion was that the contract was a method specification contract. His analysis was summarized in Leveque’s written closing argument, at para. 26, which the trial judge explicitly endorsed. That summary is not included in the trial judge’s reasons, but portions of it were provided to this court as part of the record.
[17] Essentially, Mr. Peshkin explained that the difference between the two types of contracts is that the risk under a method specification contract is with the owner, whereas the risk is transferred to the contractor under a performance specification contract. The price of the latter contract will therefore be higher. Under the Leveque contract, the “working variables”, including the specified tools, emulsion, aggregate, equipment and instructions for surface preparation, were controlled by the MTO and AECOM. As Mr. Peshkin explained, this degree of control by the owner was inconsistent with a performance specification contract: an owner cannot retain control and at the same time hold the contractor responsible for performance – the two are mutually exclusive.
[18] Mr. Peshkin compared this contract to other MTO road contracts. He concluded that, unlike other contracts, this one had no explicit surface treatment design requirement nor did it have a specific warranty or a requirement for compatibility testing, all of which would indicate that the contractor was responsible for performance. Similarly, the inspection tasks AECOM followed were consistent with a method specification contract rather than a performance contract.
[19] Mr. Peshkin observed that the contract contained no explicit performance criteria to evaluate post-placement performance, unlike other performance contracts. Further, payment was based on the quantity of materials used, indicating that payment would be made upon compliance with the specifications. Finally, Mr. Peshkin highlighted other MTO contracts entered into in the same time period that incorporated performance specifications that were absent from the Leveque contract.
[20] On the issue of the interpretation of the contract, the trial judge accepted what he characterized as the “thoughtful, detailed and compelling analysis” of Mr. Peshkin. The trial judge concluded that the warranty made the contractor responsible for proper performance only to the extent permitted by the design and the specifications.
(2) Cause of the surface treatment failure
[21] Having found that the contract allocated the risk of performance failure to the MTO, the trial judge went on to decide the issue of causation. Evidence adduced on this issue consumed much of the trial.
[22] The trial judge began by discounting the expert opinion of Dr. Maher. Dr. Maher testified that the primary cause of the deterioration of the highway surface was the poor compatibility of the binder and the Class II aggregate that Leveque had sourced from the Beauparlant Quarry. The trial judge found that Dr. Maher’s expert opinion was “not very helpful” for three reasons. First, counsel for the MTO was “extremely influential in instructing Golder Associates” pursuant to their retainer agreement and had tainted the fairness and independence of Golder’s opinion. Second, from his observation of Dr. Maher during his cross-examination, “and perhaps due to such MTO manipulation”, the trial judge was concerned that Dr. Maher was committed to advancing the MTO’s theory of the case and had assumed the role of advocate. Third, the factual underpinnings of Dr. Maher’s opinion were inconsistent with some of the facts that were proven at trial.
[23] The trial judge concluded that he was attaching very little weight to most of Dr. Maher’s opinions as a result of “his instructing and manipulating client,” preferring the “thoughtful, independent, fair, objective and non-partisan expert opinion evidence presented by David Peshkin”.
[24] The trial judge then made the following findings on the issue of causation: 1) the incompatibility of the binder and the aggregate may have been a contributing cause of the deterioration, but was not a primary factor; 2) the MTO’s decision to opt for surface treatment rather than the previously approved “hot mix design”, and its “redesign” of the project to a double surface treatment without external design or engineering input, demonstrated “intentional risk-taking, unwise decisions, and a refusal to implement self-help options”; 3) after the award to Leveque, the MTO created delay and was uncooperative despite the fact that the late-season application of surface treatment was known not to be optimal; 4) the specified binder application rates were too high given the cool late season temperatures and the heavy traffic allowed by the MTO on the highway, resulting in slow curing and “bleeding/flushing”; 5) heavy truck traffic on or around October 10, 2007 caused or accelerated the deterioration of the treatment; 6) rain was another accelerating factor; 7) all of this led to the “picking” of the roadway; 8) because of the failure to sand and stop the traffic, the picking led to potholing and further deterioration.
(3) Compliance with the contract
[25] The trial judge also addressed the opinion expressed in the Golder report that there was an industry practice for contractors to conduct compatibility testing on prescribed materials before using them. Although that was the case in 2012, Dr. Maher acknowledged in cross-examination that he did not know whether it was standard practice in 2007. The trial judge found that “[t]here was certainly no proven industry practice in September 2007 requiring contractors to conduct aggregate-binder compatibility testing.” He concluded that in fact, Leveque would not have been permitted under the contract to carry out such testing and unilaterally add an anti-stripping agent. He also commented that the MTO’s “demonstrated attitude” would likely have resulted in it denying any request by Leveque to add such an additive.
[26] The trial judge concluded that throughout the project, the MTO had acted as if Leveque carried all of the risk, and therefore the MTO would bear no responsibility for the directions and decisions it took, when in fact, the opposite was true. The trial judge found that Leveque and Bruell met all specifications under the contract, and that any warranty by Leveque did not apply due to the contributory fault of the MTO – particularly in causing delay, specifying excessive binder application rates, failing to manage heavy truck traffic and refusing to permit sanding when the bleeding and flushing occurred. Finally, the trial judge found that Leveque and Bruell performed their work in a “good and workmanlike manner” and supplied materials that were “fit for the purpose” in accordance with the contractually prescribed requirements.
(4) Misconduct by the MTO
[27] The trial judge considered awarding punitive damages against the MTO because of its conduct, but ultimately declined, finding no separate actionable wrong – though he made reference to various misconduct by the MTO including “patently inaccurate and false meeting minutes” and “material non-disclosure”.
[28] However, he did order full indemnity costs to Leveque. In separate reasons, the trial judge again impugned the conduct of both trial counsel in the litigation, and the MTO in its dealings with Leveque in remedying the problem. He found that the latter type of misconduct had been proven at trial, although he had not referred to it in the reasons for judgment. In his costs decision, he mentioned – but did not explain – a cancelled Change Order, an improper press release and various threats of infractions, among others. Ultimately, the trial judge found the overall conduct of the MTO to be in bad faith, describing it as “unconscionable, egregious and reprehensible.” In those circumstances, he imposed what he acknowledged was a rare order of full indemnity costs in favour of Leveque.
[29] He also made a Sanderson order that the MTO, rather than Leveque, pay the costs of AECOM. He ordered the MTO to pay Bruell’s costs on a mixed partial and substantial indemnity scale, with the substantial indemnity scale commencing on the date of Bruell’s offer to settle that was rejected by the MTO.
Issues
[30] This appeal raises the following issues:
Did the trial judge make a reversible error in the interpretation of the contract between MTO and Leveque?
Did the trial judge err in his finding that Dr. Maher’s evidence was tainted by undue influence, and in his findings regarding the cause of the surface treatment failure?
In the alternative, should Leveque have been required to contribute to the cost of the remediation?
Did the trial judge err in his findings of litigation misconduct?
If so, does the error affect the costs award? And were the costs awards excessive and unreasonable?
Analysis
(1) Issue 1: Did the trial judge err in his interpretation of the contract and in finding that the warranty given by Leveque did not apply?
[31] The appellant submits that the trial judge erred in finding that the contract is a method specification contract and that the warranty for performance of the work therefore did not apply. In particular, the appellant argues that the trial judge erred in his interpretation of the words “or specify a method of construction in whole or in part” in GC 7.01.03.03 and of the contractor’s responsibility for “construction, means, methods, techniques, sequences and procedures” in GC 7.01.03.01.
[32] In its recent decision in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, the Supreme Court reconsidered the historical approach of treating contractual interpretation as a pure question of law. Rothstein J., speaking for the court, articulated the new governing approach as follows, at para. 50:
Contractual interpretation involves issues of mixed fact and law as it is an exercise in which the principles of contractual interpretation are applied to the words of the written contract, considered in light of the factual matrix.
[33] As such, deference is owed to the trial judge on questions of contractual interpretation, subject to extricable legal errors including “the application of an incorrect principle, the failure to consider a required element of a legal test, or the failure to consider a relevant factor”: Sattva, at para. 53, citing King v. Operating Engineers Training Institute of Manitoba Inc., 2011 MBCA 80, 341 D.L.R. (4th) 520, at para. 21.
[34] In this case, expert evidence was called to assist the court in interpreting the contract. The expert evidence effectively formed part of the factual matrix, as it was proffered to educate the court about the types of contracts that exist in the road construction industry. Of course, the trial judge was not bound to accept the expert evidence. It was his task to interpret the contract – in particular, the obligations of the contractor and the scope of the warranty.
[35] The trial judge reviewed the contractual language and considered the explanations of the expert witnesses regarding the operation of a method specification contract as compared to a performance contract in the context of highway construction and resurfacing. He concluded that the contract between the MTO and Leveque was a method specification contract.
[36] The trial judge clearly preferred the evidence of the respondent’s expert, Mr. Peshkin, over the evidence of the appellant’s expert, Dr. Maher, and gave several reasons for this preference. He believed that Dr. Maher was influenced by counsel for the MTO. I will say more about whether counsel acted improperly later in these reasons. However, it was also the trial judge’s impression from the way Dr. Maher gave his evidence that he treated his role as an expert as that of an advocate for the MTO.
[37] Further, the trial judge rejected Dr. Maher’s evidence because certain facts proven at trial did not support the conclusions in his expert report, for example, the condition of a parking lot surfaced by Leveque at the same time as the highway. In addition, the trial judge rejected Dr. Maher’s description of the damage as a “‘catastrophic failure’ over the full length and width of the placement”, as the photographic evidence did not support such an “expressive opinion”.
[38] The trial judge also focused on the report’s conclusion that there was an industry practice for contractors to test materials for compatibility. As discussed above, when confronted in cross-examination, Dr. Maher acknowledged that although that practice existed in 2012 when he wrote the report, he did not know whether it existed in 2007, the relevant time when this contract was being performed.
[39] The trial judge was entitled to accept the expert evidence that he did on the characterization of the contract. I see no extricable error in his approach to the interpretation of the contract, or in his conclusion that the contract specified everything the contractor was to do. There was no basis to imply a term other than those explicitly provided. In fact, to imply a requirement for compatibility testing, or a requirement that the contractor “ensure suitability”, could have contradicted what was specified in the contract.
[40] I therefore see no basis to interfere with the conclusion of the trial judge that the warranty provided by the contractor did not oblige it to conduct compatibility testing on the specified aggregate and the specified binder or to assume responsibility for any failure that was caused or contributed to by any incompatibility between those two materials, provided the specified materials and specified procedures for their application were used. As the respondents did use the specified materials and applied them in accordance with the contract specifications, the responsibility for any failure rested with the owner.
(2) Issue 2: Did the trial judge err in his conclusion regarding the cause of the failure of the surface and in rejecting the evidence of Dr. Maher?
[41] It was conceded that if the trial judge made no error in his interpretation of the contract or in his finding that the respondent Leveque was not liable under the warranty, it becomes unnecessary to decide the cause of the failure.
(3) Issue 3: Is Leveque required to contribute to the cost of the remediation?
[42] Similarly, the argument that Leveque should be held partially responsible for the failure of the surface treatment was premised on reversing the finding that the contract is a method specification contract. Again, in light of my conclusion on the first issue, it is not necessary to address this question.
(4) Issue 4: Did the trial judge err in his findings of litigation misconduct?
[43] The trial judge was highly critical of two aspects of the conduct of the MTO. One criticism involved the conduct of MTO personnel who dealt with Leveque in the supervision of the remedying of the surface treatment failure. The other was the trial judge’s disparaging view of the conduct of trial counsel, Mr. Weilenmann, in his dealings with the expert witness, Dr. Maher, and in relation to disclosure.
[44] The trial judge did not have the benefit of this court’s recent decision in Moore v. Getahun, 2015 ONCA 55, where the court discussed counsel’s proper role in instructing and preparing expert witnesses, as well as the question of whether draft expert reports and correspondence between counsel and expert witnesses must be disclosed. Counsel for the appellant sought, and all counsel were granted the opportunity to provide further written submissions to this court following the release of that decision while this appeal was under reserve.
[45] The trial judge’s findings on improper influence in his reasons for judgment were repeated at paras. 17 and 18 of his reasons for costs:
In my Reasons for Judgment, I specifically addressed my finding from the trial that there “is convincing evidence that Mr. Weilenmann was pivotal in the development of MTO defence strategies including being extremely influential in instructing Golder Associates pursuant to their Retainer Agreement. Exhibit 37 is but one striking example. Exhibits 30, 34, 35, 36, 38, 40, 41 and 42 display much of the same. For all of the reasons submitted in paragraph 92(c) (i) to (vi) of the Leveque Closing Argument, such MTO influence and suppression has definitely tainted any ‘fair, objective and non-partisan’ opinion ultimately presented by Golder Associates.”
I have determined, as a result of what I had witnessed during this trial, that MTO was quite improperly instructing and manipulating their supposedly “fair, objective and non-partisan” expert opinion as presented to this Court.
[46] The exhibits referred to came from Golder’s litigation file, which was produced on request during the trial. The appellant now submits, based on Moore, that this file was privileged and need not have been produced. The respondents argue that the file was produced voluntarily without a court order and that any privilege was thereby waived. They submit that there is therefore no decision for this court to review.
[47] In my view, the pertinent issue before this court is not whether the appellant can now claim privilege over the file, but whether the trial judge unfairly impugned the conduct of trial counsel.
[48] In Moore, this court made clear that it is not only appropriate but essential for counsel to consult and collaborate with expert witnesses in the preparation of expert reports. Counsel must explain to experts their duties to the court, clarify the relevant legal issues, and assist experts in “framing their reports in a way that is comprehensible and responsive to the pertinent legal issues in a case”: Moore at para. 62. Normally, communications between counsel and the expert, as well as draft reports, will be subject to litigation privilege. Only if there is reasonable suspicion that counsel has improperly influenced the expert may production of notes and drafts be ordered.
[49] In this case, the file was produced on request during trial. Though there may have been some uncertainty in the law regarding the scope of litigation privilege, this does not in itself call for appellate intervention to address what was essentially a voluntary disclosure. As I stated, at this point the issue is whether the impugned communications from counsel warrant the severe criticism levelled by the trial judge.
[50] The trial judge referred to a number of exhibits that he viewed as examples of Mr. Weilenmann “being extremely influential” in instructing Golder. Exhibit 37 was described as a “striking example”. That exhibit is an email from Mr. Weilenmann to Dr. Uzarowski, another expert at Golder, dated August 12, 2010. It includes other emails from the MTO that deal with traffic volumes regarding the hauling of sand over the project. Mr. Weilenmann tells Dr. Uzarowski that he thought Golder’s experts should be aware of that information, that they may already have it, that they may or may not include it in their report, and that regardless they may be asked about it at trial.
[51] This is clearly the type of input from counsel to an expert preparing a report that is contemplated in Moore as being appropriate. Counsel does not instruct the experts as to what conclusions they should draw from the information. Counsel leaves it to them to decide whether to include it in the report, but notes that it could be an issue at trial.
[52] Exhibit 41 is another impugned email from Mr. Weilenmann to Dr. Uzarowski. It refers to the fact that Mr. Weilenmann had circulated the draft report to MTO staff for comments. He notes that the comments, which he attached to the email, mainly involved typos. However, one suggestion, which he repeated, was to delete a quote from Irys Steblynsky, an MTO employee, who did not consider herself an expert on the subject matter of the quote. This email chain also included diaries of weather conditions for relevant times, which Mr. Weilenmann wrote “will not change your opinion about the weather, only improve the data.”
[53] The trial judge appears to have been persuaded by, and to have accepted, the cogency of certain paragraphs of Leveque’s written closing argument that suggested that Mr. Weilenmann’s conduct was improper. The portion of the Leveque closing argument that the trial judge referred to was provided on appeal, although it is not quoted by the trial judge. In relation to the weather diaries in Exhibit 41, Leveque argued in its closing submissions that MTO’s influence on Golder was demonstrated by “the suggestion that further information provided about weather ‘will not change your opinion about the weather’”. Leveque seems to be suggesting that Mr. Weilenmann was effectively telling Golder not to change its opinion. However, in my view, a fair reading is that Mr. Weilenmann, having read the data, believed it would not change the experts’ opinion, but rather would provide further support for it. Similarly, counsel’s instruction to remove the quote by Irys Steblynsky from the report on the grounds that she was not an expert, which Leveque characterized in its closing argument as “the deletion of ‘quotes of Irys’”, appears to have been an exercise of judgment by counsel regarding the reliability of the report, not a deliberate suppression of information. I see no attempt by counsel to influence the experts.
[54] The other email exhibits that the trial judge refers to are equally innocuous. In Exhibit 34, another impugned email, Golder is told by Mr. Weilenmann: “You are not permitted to contact Miller [Paving] directly to find out more information, as this is inappropriate in the circumstances of this litigation.” Miller Paving was a subsidiary of another company that had been a party to the litigation at one stage, which the appellant argues is why it was considered inappropriate to contact them directly. In its written argument, Leveque cites this instruction as an example of Mr. Weilenmann trying to exert improper influence over Golder, describing it as “the Weilenmann directive that Golder is not to speak to their client Miller Paving during their investigations.” This submission suggests something nefarious which is not borne out by the email. In fact, the expressed concern regarding propriety demonstrates that Mr. Weilenmann was aware of his ethical obligations and was attempting to abide by them.
[55] In my view, there was no factual basis for the allegations by Leveque of impropriety by Mr. Weilenmann in his instructions and dealings with Golder in the preparation of the expert report. The trial judge was unimpressed with Dr. Maher for other reasons, having heard his testimony and observed him under cross-examination. The trial judge was also concerned about the attitude displayed by MTO staff in their dealings with Leveque throughout. However, the extension of his criticisms of Dr. Maher and other MTO staff to the conduct of trial counsel in his dealings with the experts does not withstand scrutiny. Counsel’s reputation for integrity is a precious commodity, not to be impugned without a clear, substantiated basis. In my view, the evidence in the record that the trial judge relied on is benign and is no basis to impugn trial counsel.
[56] I note that the trial judge was also critical of the MTO for non-disclosure and “suppression” of evidence, as well as the “patently inaccurate and false meeting minutes”. He did not specify the “non-disclosure” that he was referring to or who was responsible for it. On appeal, the respondent advised that the trial judge was referring to non-disclosure of information regarding heavy traffic loads carried over the surface treatment on October 10 and 11, 2007, although Leveque became aware of this information before trial. Although the trial judge impugns the conduct of the MTO in respect of non-disclosure, without clear findings, the trial judge’s reasons are not sufficient to permit this court to address any issue pertaining to non-disclosure. With regard to the false meeting minutes, this misconduct was not attributed to trial counsel and this court has not been asked to revisit the trial judge’s findings on this issue.
(5) Issue 5: Costs
[57] The awarding of costs is a discretionary matter that attracts considerable deference on appeal, unless the trial judge makes an error in principle or the costs award is plainly wrong: Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27.
[58] MTO objects to the quantum of costs awarded to Leveque and Bruell as being unreasonable, submits that a number of offers to settle made by the MTO were not considered, and argues that the trial judge erred in awarding the Sanderson order which rendered the MTO responsible for AECOM’s costs, the quantum of which is not disputed.
[59] The trial judge was clearly very concerned about the conduct of the MTO throughout, and was satisfied that the award of costs should adequately reflect his concerns and disapproval. Although the amounts awarded are very high, I see no basis in law or principle to interfere with the orders made on these grounds.
[60] However, one ground of appeal merits intervention. The trial judge ordered full indemnity costs against the MTO in favour of Leveque on the basis that MTO’s misconduct was “unconscionable, egregious and reprehensible” and constituted bad faith. Because part of the misconduct that influenced the trial judge’s full indemnity costs award was the alleged misconduct attributed to trial counsel, a finding which has been set aside on appeal, the award of costs at the full indemnity level no longer rests fully on findings supported by the record. Based on that error, I would grant leave to appeal costs and reduce the quantum of costs payable to Leveque by 20% to reflect an award of substantial indemnity costs, rather than full indemnity.
Conclusion
[61] I would dismiss the appeal, grant leave to appeal costs, allow the appeal against costs by reducing the amount of costs payable to Leveque by 20%, and otherwise dismiss the appeal against costs. I would order the costs of the appeal to the respondents fixed at $20,000 for Leveque and $15,000 for Bruell inclusive of disbursements and HST.
Released: “KF” APR 21, 2015
“K. Feldman J.A.”
“I agree. David Watt J.A.”
“I agree. K. van Rensburg J.A.”