Court of Appeal for Ontario

Date: 2019-09-30 Docket: C66126

Judges: Juriansz, Benotto and Miller JJ.A.

Between

Mississippi River Power Corporation Plaintiff (Appellant)

and

WSP Canada Inc., Genivar Inc., William R. Walker Engineering Inc., Wm. R. Walker Engineering Inc., Douglas Leask, M. Sullivan & Son Limited, Michael Dent, Dent Engineering, 1009044 Ontario Ltd., Harrington Plumbing and Heating Limited operating as Harrington Mechanical Defendants (Respondents)

Counsel

Helmut R. Brodmann, for the appellant

David M. Adams and Matthew E. Taft, for the respondents Michael Dent, Dent Engineering and 1009044 Ontario Ltd.

David A. Tompkins, for the respondent M. Sullivan & Son Limited

Christopher F. Reil, for the respondent Harrington Plumbing and Heating Limited operating as Harrington Mechanical

J. Stephen Cavanagh, for the respondents WSP Canada Inc., Genivar Inc., William R. Walker Engineering Inc., Wm. R. Walker Engineering Inc. and Douglas Leask

Heard: September 24, 2019

On appeal from: the judgment of Justice Robyn M. Ryan Bell of the Superior Court of Justice, dated October 15, 2018.

Reasons for Decision

[1] The appellant appeals from partial summary judgment: (1) granted in favour of the Walker respondents limiting the Walker respondent's potential liability to the appellant's to $2 million; (2) granted in favour of the remaining respondents also limiting potential liability to $2 million.

[2] The Walker respondents entered into a personal services contract ("PSC") with the appellant which contained a clause limiting the liability of Walker to $2 million.

[3] The appellant argues that the motion judge erred in her interpretation of the PSC by impermissibly using subsequent conduct of the parties to interpret that contract. Specifically, the error is said to be in finding that the parties had agreed by their conduct to extend the terms of the PSC beyond design services to govern the construction phase of the project as well.

[4] The appellant argues that the motion judge ought to have taken the minutes of the MRPC board meetings as evidence that the appellant and the Walker respondents had entered a second contract to govern the construction phase, and ought to have applied the terms of that contract.

[5] The motion judge did not accept this argument, and held that the PSC "was extended, by way of a stipulated price contract, so as to apply to services provided by Walker during the construction phase of the project." The motion judge's interpretation of the contract is entitled to deference. We are not persuaded that the motion judge made any error in principle or any other reviewable error. We would not interfere with this determination.

[6] With respect to the second issue, the appellant argues that the motion judge erred in extending the benefit of the limit on liability to the remaining respondents. The motion judge found that the appellant and Walker intended to extend the benefit of the insurance covenant to the remaining respondents. She did so on the basis that it would have made no sense commercially for Walker to bargain to limit its own liability to $2 million, while leaving itself exposed to claims for contribution and indemnity from the remaining respondents.

[7] The appellant conceded that this is a question of mixed fact and law to be assessed on the standard of palpable and overriding error. The motion judge's interpretation of the contract was open to the motion judge on this standard of review.

[8] We do not agree with the submission that the motion judge erred in not finding that the insurance limits prescribed by the PSC were increased by the quantum required by the CGL coverage set in the stipulated price contract. The insurance limits prescribed by the stipulated price contract do not relate to professional liability, which is the subject of the insurance clause in the PSC. The PSC has a mechanism for increasing the limit, and that mechanism was not used.

[9] The appeal is dismissed. We are advised that the parties have agreed on costs and there is no need for this court to make an order in this respect.

"R.G. Juriansz J.A."

"M.L. Benotto J.A."

"B.W. Miller J.A."