ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 10405124
DATE: 2014/04/24

BETWEEN:

Tedescon Infrastructure Ltd.
Plaintiff

– and –

Town of Markham
Defendant

Nicholas C Tibollo and Lori Marzinotto, for the Plaintiff

Vito S. Scalisi, for the Defendant

HEARD: March 31 – April 9, 2014

A.J. O’MARRA J.:

[1] In 2009 Tedescon Infrastructure Ltd. (Tedescon) was awarded a contract for the replacement of approximately 286 meters of existing sanitary sewers under four streets in the Town of Markham (Town). The plaintiff completed the work pursuant to the contract in September and October 2009 in addition to some remedial work due to settlement on three of the four roads. A Certificate of Substantial Performance was issued by the Town, October 27, 2009.

[2] In February and March 2010 additional remedial work was required as a result of significant settlement depressions on two of the roadways in which work was undertaken by the plaintiff. The plaintiff submitted an account in the amount of $90,627.98 for the 2010 remedial work. The defendant refused to pay on the basis that the plaintiff had not sufficiently compacted the backfill in the original trenching as was required under the contract. The plaintiff was responsible for repairing deficiencies at no cost to the defendant.

[3] In addition, the plaintiff claimed $4,273.50 as an amount the defendant deducted from the final payment made to the plaintiff for geotechnical reports conducted by the soil engineer for the remedial work required in 2010. This claim was withdrawn at the end of the trial, when the plaintiff advised it had received payment of the deducted amount later in 2010.

Position of the Parties

[4] It is the position of the plaintiff that the natural select soil excavated from the trenches, which it was required to use as backfill, was too wet to properly compact, thereby causing the subsequent settlement to the roadways. The settlement problems were not as a result of it failing to achieve the required compaction of the soil, but rather it was because the soil had too high of a moisture content, which prevented sufficient compaction.

[5] The position of the defendant is that the plaintiff compacted insufficiently the backfill at the lower levels of the trenches. The defendant, as a result of the remedial work required in October 2009 put the plaintiff on notice that any further settlement should be rectified by the plaintiff at no additional cost to the Town.

[6] The plaintiff asserts that it provided labour and materials in the amount of $90,627.98 at the request and direction of the defendant to rectify the subsequent settlement problems in February and March 2010, just as it had for the earlier remedial work in October 2009. It claims the remedial work was extra to the original contract by oral agreement with the defendant’s representative, its senior engineer and project manager, Prathapan Kumar. In the alternative, the plaintiff claims payment of the sum on the basis of quantum meruit and unjust enrichment, there being no evidence its work was deficient.

[7] The central issue on the trial is whether the remedial work performed by Tedescon in the spring of 2010 to correct significant settlement on two roads under which it had replaced sewers in 2009, Colonsay Road and Royal Orchard Blvd., was extra to the original contract or required to remedy deficient backfilling and compaction of the trenches.

Background to the Claim

[8] The Town of Markham decided to replace the sanitary sewers along four streets in the Thornhill area as a result of the flooding of residential basements and capacity issues in the area: Silver Aspen Drive, Colonsay Road, Royal Orchard Blvd., and Weeping Willow Lane. In terms of municipal infrastructure work it was considered a small project. Prathapan Kumar was the senior engineer who designed the project and prepared the tender materials and contract documents for the Town.

[9] Prior to the design and construction of the sanitary sewer extensions, the Town contracted with Trow Associates Inc. (Trow) to carry out a geotechnical investigation of the soils in the four areas under the roadways to the depths of the proposed sewer extensions to determine the subsoil and groundwater conditions of the sites. The kind of soil, its moisture content, and the groundwater level in the area of the trenching was important with respect to whether the native soil excavated was suitable for backfilling the trenches and compaction, or whether the native select soil should be replaced.

[10] Trow conducted borehole tests March 30, 2009 on the roads where the trenching was to occur. It found the soil was variously native clayey/silt till and silt till which “are generally considered suitable for reuse as trench backfill.” The silt and clayey silt material were found to be wet and “some moisture conditioning will be required (i.e., drying) prior for reuse as backfill.” Drying would entail stockpiling it and turning it prior to putting it back in the trench.

[11] Ground water was located on Royal Orchard Blvd in borehole 1B at 4.16 meters, on Colonsay Road in borehole 2A at 3.86 meters, Silver Aspen Drive in 2C at 2.79 meters and Weeping Willow Lane in 3A at 4.72 meters. The new sanitary sewers were to have invert depths of about 3.2 to 4.5 meters below the existing grade. It was noted that seasonal fluctuations of the ground water level at the site should be expected. Generally the ground water is greater in the spring than in the summer when there are drier conditions.

[12] So-Lim Yip, the geotechnical engineer who prepared and submitted the Trow report to the Town, dated April 13, 2009 reported in terms of backfilling the following:

All backfilling and compaction operations must be closely examined by technical representatives of this office to ensure uniform compaction to specification requirements, especially in the vicinity of maintenance holes and catch basins, near the ends of compaction runs, and in all areas that are not readily accessible to compaction equipment.

All backfill should be placed in lifts not exceeding 300 mm in thickness and be uniformly compacted to a minimum of 95% of SPMDD (Standard Proctor Maximum Dry Density). Within the upper 600 mm of pavement subgrade, the fill material should be compacted to at least 98% of the SPDMM. Thinner lifts may be required depending on the size and type of compaction equipment used by the contractor and the moisture content of the fill material at the time of construction.

[13] The trenching process for such a project is generally as follows:

• The trenches with widths of approximately 1 meter to 2 meters are excavated to depths of about 3 meters to 4.5 meters. The excavated material is removed from the trench and set aside for later use as backfill.

• The trench excavation is supported by trench boxes for safety reasons and to prevent cave-ins.

• Once the trench is excavated the sanitary sewer pipes are placed on granular bedding material and then covered by granular soil.

• The trenches were then backfilled in layers of 300 millimeters and compacted in lifts up to the elevation of the underside of the pavement subbase granular soil.

• The compacted granular subbase and soils were followed by placement and compaction of the asphalt road surface.

[14] Lifts are the thickness of the layers of soil being put back into the trench and pounded by the compaction equipment required to push out the air molecules. Some moisture is required to permit the soil to particles to adhere. The optimum water content in this instance was 15.2, plus or minus 3%. Too much moisture content and the specified degree of compaction cannot be achieved.

[15] In May 2009 the Town issued a request for tenders, which included the Trow report.

[16] Tedescon as the lowest bidder was awarded the work on July 13, 2009 under purchase order for the amount of $249,477.90. Tedescon was to dig the trenches and lay sewer pipes under 85 meters of Silver Aspen Drive, 108 meters on Colonsay Road, 68 meters on Royal Orchard Blvd. and 25 meters under Weeping Willow Lane.

[17] Tedescon was incorporated in 2007 as an infrastructure contractor to install sewers, water mains and related services to municipalities and regions in the Greater Toronto area. Fred Tedesco is the owner and president of Tedescon. He had 6 employees. In addition to supervising his crew on site, Mr. Tedescon worked daily as a machine operator backfilling and compacting the soil in the trenches. Tedescon was a relatively new company having one other contract nearing completion in Newmarket. Mr. Tedescon had more than twenty five years of experience working for companies involved in sewer and water main infrastructure projects.

[18] In addition to awarding the contract to Tedescon Infrastructure Ltd. the defendant contracted with Chisholm Fleming Associates, (CFA) a consulting engineering firm to act as the its representative on the construction site, on a part-time basis (four hours daily) to supervise and to monitor the work and ensure compliance with the terms of the contract by the contractor.

[19] Also, the defendant hired Trow & Associates to attend as required to conduct random soil and compaction testing.

[20] With respect to testing, the terms of the contract between Tedescon and the Town read as follows:

The Contractor is responsible for ensuring that all materials and workmanship meet the specifications. The Town may take random tests on the quality of materials and workmanship; however, such testing shall not relieve the Contractor of his responsibilities under the contract.

Compaction testing will be carried out after the Town is notified that an area is ready for testing. After the tests are taken, if the results show that the required compaction has not been obtained, the Town may charge the contractor the cost of the testing.

Should any testing done by the Town reveal a deficiency in the Work it is understood that it is the Contractor’s responsibility to rectify such a deficiency. The Town may make a reduction in payment for any deficiencies encountered and the amount so withheld shall be at the direction of the director.

[21] The contract required that the backfill materials “shall be selected native material unless otherwise noted in the contract documents”. The contractor was to use the material excavated from the trenches to backfill the trenches.

[22] Under the heading “Compaction of Bedding and Backfill Materials” the contract stipulated:

Bedding and backfill material shall be tested at minimum 200 meter intervals, each layer.

(i) Bedding materials shall be placed in layers not exceeding 200 millimeters in loose thickness and mechanically compacted to 95% SPMDD (Standard Proctor Maximum Dry Density).

(ii) Backfill shall be placed in layers not exceeding 300 millimeters in loose thickness and each layer shall be mechanically compacted to 95% SPMDD before a subsequent layer is placed. Top 600 millimeter of backfill below subgrade on the road allowance shall be mechanically compacted to 98% SPMDD.

(iii) In fill areas the last 1.0 meter fill below subgrade shall be compacted to 98% SPMDD and below this 95% compaction is acceptable unless noted otherwise in the soils report.

(iv) Acceptance of compaction shall be based on the nuclear density test gauge result.

[23] In summary, under the Contract the responsibility for placement and proper compaction of the backfill was the responsibility of the Contractor. The material for the trench backfill was to consist of the selected native material excavated. The trench backfill was to be placed in layers, called “lifts”, not exceeding 300 millimeters in thickness. Each layer at the lower level was to be compacted to a density of at least 95% of the materials Standard Proctor Maximum Dry Density (SPMDD). On completing compaction of each backfill layer the contractor was to inform the Town so the inspection and testing company could test the backfill density and verify its degree of compaction.

[24] When the contractor notified the onsite consulting engineer, in this instance, Chisholm Fleming Associates, the compacted backfill layers were ready for inspection, CFA would notify Trow, the geotechnical consultants, to attend the site to test backfill density and compaction using specialized equipment, the nuclear density test gauge.

[25] The CFA engineer on site for most of the project was Simon Leung. When the contractor notified Mr. Leung the lifts were ready for testing, in turn, he would contact Trow, and various geotechnicians would attend the site to test the material and compaction.

[26] The contract required that the construction was to be completed within 30 working days and if it took longer, under the heading “Liquidated Damages” the contractor was required as a penalty to pay the Town the sum of $500 for each and every calendar day that the work remained unfinished after the time specified. In this instance the project took 59 days, but no penalties applied because most of the additional time was required when unexpected contaminated soil was found.

[27] Tedescon started its work on August 11, 2009 on Silver Aspen Drive, working north toward the intersection at Colonsay Road. Prior to reaching Colonsay Road on August 24 the Contractor excavated foul smelling soil later found to have been contaminated by hydro carbons, furnace fuel from a former distribution line in the neighbourhood. The work had to be stopped at that location in order to determine the nature of the contamination. The site was closed from September 3 to 23, 2009 to conduct the laboratory examination of the soil, and then to train the contractor’s crew in the safe handling of the excavated material.

[28] When the contamination was found Tedescon was directed to move to one of the other sites, Weeping Willow Lane where it had completed its work by August 26. Subsequently, the crew was directed to carry out its work on Royal Orchard Blvd. The work on Royal Orchard Blvd. was completed September 1, 2009. Tedescon remained in a hold position until September 23, after which Tedescon was directed to excavate all of the contaminated soil on Silver Aspen and Colonsay and truck it to an approved environmental containment site. Over 1000 tonnes of contaminated soil was removed and replaced by imported fill.

[29] The contract with Tedescon increased to $353,141.25 because of a number of additional purchase orders issued by the Town, inclusive of the contaminated soil removal.

Road Settlement Problems 2009

[30] In September, a cave in problem occurred on Weeping Willow that was rectified by the contractor with additional shoring. It was the view of the town that the contractor had not been using proper shoring to prevent the caving in of soil into the trench from under the cut asphalt.

[31] On October 13, 2009 other problems arose on Weeping Willow Lane and Silver Aspen Drive. Initially, in an email the Contractor notified the Town that the paving sub-contractor Ashland Paving Ltd. provided a letter to Tedescon stating it would be unable to warranty the asphalt pavements on Silver Aspen Dr. because of the poor ground conditions.

[32] In response, as a result of additional settlement observed on the other roads as well, the Town put the contractor on notice by email later on October 13, 2009 from Mr. Kumar, which read in part:

The Contractor is responsible for all works until one year from substantial completion date. Town is not responsible for any settlement of asphalt during this period…

We are very much concerned about the settlement of trench in Weeping Willow Lane for the second time on Oct 13th and had noticed slight depression on Royal Orchard Blvd. The road surface will be inspected at the end of the maintenance period and any settlement should be rectified by the Contractor at no additional cost to the Town.

[33] On October 14, 2009 Mr. Yip (Trow), Mr. Kumar (Town) and Simon Leung (CFA) met on site with the contractor (Fred Tedesco) to examine Weeping Willow, Silver Aspen and Colonsay. A test pit was dug on Weeping Willow Lane after the asphalt was removed to 1.2 meters (approximately 4 feet) and material was found to be wet. Silver Aspen and Colonsay, which had yet to be paved, were proof rolled by driving a tri-axel dump truck over the backfilled trenches. A number of soft spots (deflections) were detected.

[34] Mr. Yip, the Trow geotechnical engineer, made the following observations and corrective recommendations:

1. Weeping Willow Lane: It is understood that there is ongoing settlement of the trench which was recently backfilled for the sanitary sewer replacement. The trench sewer invert was about 3.0m deep. A test hole was dug to a depth of about 1.2m indicates that the backfill material was generally very moist to wet, and not well compacted. We recommend that the entire length of the trench be sub-excavated to the depth of about 1.2m. the exposed surface should be thoroughly compacted using a hoe pac. The trench may be backfilled with 2” recycled concrete and granular “A” compacted to at least 98% of its Standard Proctor Maximum Dry Density.

2. Silver Aspen Drive: The road sub-base was proof rolled using a loaded truck. Two (2) soft areas were noticed on the east side of Silver Aspen Drive. The areas were about 26m x 3m, and 6m x 3m. It is recommended that the soft areas be sub-excavated to a depth of about 600 mm below subgrade. The exposed surface should be thoroughly compacted, covered with R270 filter cloth, and backfilled with 2” recycled concrete material. The existing road granular material may also be used as backfill. The granular material should be placed in 300mm thick lifts and compacted at least 98% SPMDD.

[35] On Colonsay Road, after the proof roll, Mr. Yip noted that there were four soft areas, 6 meters x 2.5 meters, 6 meters x 2.5 meters, 12 x 2.5 meters and 12 meters x 2.5 meters. He recommended that the soft areas be excavated to a depth of about 600 millimeters below subgrade. The exposed surface thoroughly compacted, covered with R270 filter cloth and backfilled with 2 inch recycled concrete material, then covered in 300 millimeter lifts with granular material and compacted to 98% SPMDD.

[36] The Town issued a change order to Tedescon to rectify the subgrade on Silver Aspen Drive, Colonsay Road and Weeping Willow Lane in the additional amount of $22,856.13, $4,299.25 of which was for Weeping Willow Lane.

[37] It was the view of the project manager for the Town, Prathapan Kumar that the deflections on Silver Aspen and Colonsay occurred as a result of heavy rains in the early part of October having saturated the exposed areas prior to paving. A photograph taken on Silver Aspen Drive at Tab 48, p. 6 of Exhibit 1 shows rain water ponding. Tedescon was not considered to be responsible for the settlement and as such, rectification was an extra to the contract. It was not determined what had caused the settlement on Weeping Willow. It had been paved in September. But Mr. Kumar testified that he agreed to pay for the rectification on Weeping Willow in fairness to Tedescon.

[38] On October 27, 2009 the Town issued a Certificate of Substantial Completion for the work done by Tedescon.

Road Settlement Problems 2010

[39] In February 2010 the Town informed Tedescon that a section of the trench on Royal Orchard Blvd. and another section on Colonsay Road had settled causing large depressions in the roadways. Tedescon conducted emergency repairs by using cold patch to fill the depressions until warmer weather permitted more extensive remedial repairs. Further settlement had occurred by March10, 2010 to the trenched areas on the roads - deepening asphalt depressions measuring a couple of inches up to one foot (300 millimeters) in places, with noticeable cracking of the pavement at the edges.

[40] On March 29, 2010 Mr. Tedesco, Mr. Kumar, and representatives of Trow, So-Lim Yip and Chisholm - Fleming, Neville Morrison met to discuss the required repairs. By April 2, 2010 based on the recommendations of Trow, Tedescon carried out the remedial works on Colonsay Road and Royal Orchard Blvd. by:

• removing the backfill material to a depth of approximately 1.2 meters below the existing ground surface

• compacting the surface of the native trench backfill materials at a depth of about 1.2 meters

• placing a geo-textile on the trench backfill at the 1.2 meter depth

• placing approximately 2 inches of recycled crushed concrete backfill in layers and compacting to 100% of the materials SPMDD, and

• placing and compacting asphalt to match the surface level of the existing road.

[41] In a reporting letter from Trow concerning the settlement, prepared by So-Lim Yip and co-signed by his manager, Peter Chan, to Prathapan Kumar, dated April 5, 2010 his observations and comments read in part:

During the recent site visit, it was observed that settlement about 1.0 to 1.5 m wide has occurred along Colonsay Road between the two manholes west of Silver Aspen Drive. The depth of the settlement ranged from minimal up to 300 mm. The settled area has been temporarily filled in with asphalt by the contractor. In addition, some settlement was observed within the new trench on Royal Orchard Blvd.

Based on our review of the construction and site observations, it is our opinion that the settlement is due to consolidation of insufficiently compacted backfill. From our experience, loose backfill placed within the lower zone of a trench takes 8 to 12 months to consolidate.

[42] Mr. Tedesco’s evidence with respect to the March 29 meeting was that his company was to do the repairs on the same basis as the earlier change orders and remedial work in September and October 2009, specifically on the basis of time and material expended. An invoice in the amount of $90,627.98 was submitted.

[43] The evidence of Mr. Kumar was that the remedial work was to be conducted by Tedescon in accordance with the notification provided in October 2009, specifically at no additional cost to the Town. Relying on the April 5, 2010 Trow report and opinion that the cause of the trench settlement was due to consolidation of insufficient backfill compaction, the Town advised Tedescon in a letter dated April 19 reiterated that Tedescon was responsible as a result to rectify the deficiencies on Colonsay Road and Royal Orchard Blvd. at no extra cost to the Town.

[44] On June 17, 2010 the plaintiff issued its statement of claim for the unpaid invoice.

[45] Fred Tedesco, the owner and president of Tedescon, testified that throughout the project he complained that the select native soil Tedescon was required to use as backfill was too wet to achieve appropriate compaction. He described the soil at all stages of the project as wet, muddy or soupy. Mr. Tedesco operated the compacting equipment, a hoe pac, himself. He claimed to have notified the CFA representative, Simon Leung the soil was wet, but was told to go ahead and use the native soil as backfill. He would tell Simon to notify Trow to attend to test the soil, but often Trow would not show up or they would attend only when they were at higher levels of backfilling. If geotechnicians attended when they were at the deeper levels they would not get into the trenches when the trench boxes were removed for fear of cave ins. The Trow geotechnician would tell them to use the native soil as backfill.

[46] He reviewed photographs taken by Mr. Kumar of the project at different stages in 2009 and described excavated backfill material shown as being wet, muddy, muck and soupy. He maintained that the native backfill material was consistently muddy throughout the project from day one. One of his truck drivers, Thomas Calandra, who drove the tri-axel truck proof rolls in October, described the ground conditions on Colonsay as wet, “mud you can say”.

[47] Mr. Simon Leung, the CFA supervising engineer testified that Mr. Tedesco never complained about the use or suitability of the backfill material. Mr. Leung’s daily inspector reports do not reflect any contractor complaints about the suitability of the backfill, (Exhibit No. 1, Tab 11). Similarly, until the soft spots were observed following the test rolls in mid-October there had been no concerns that compaction had not been met.

[48] Further, Mr. Leung testified the Trow geotechnicians attended as required and conducted tests at the compacted lifts that were available at the time of their attendance. He witnessed no refusals by the technicians to enter the trench to test at lower levels.

[49] Mr. Leung observed that the Contractor had been compacting lifts of more than 300 millimeters, as required. He spoke with his supervisor at CFA, Neville Morrison who advised him that as long as the Contractor was using heavy equipment, like a hoe pac, more could be used, but ultimately the contractor was responsible and Trow was testing to ensure compaction.

[50] Several Trow geotechnicians, Rajinder Balasar, Joseph He and Dale Snodden, testified on the trial as to their testing of materials and compaction at the trenching sites.

[51] Rajinder Balasar said his testing did not raise any concerns as to the suitability of the soil for backfilling in terms of the optimum moisture content or any concerns raised by the compaction testing. Preliminary “In Situ Density Summary” Reports confirming compaction and field moisture measurements were left either with Simon Leung on site or the contractor on each day he tested, as did the other geotechnician.

[52] The trenches were between 3.5 to 4 meters deep over the course of the project. After the problems were found on Colonsay and Royal Orchard, the Trow In Situ Density Summary Reports showed that the random compaction testing occurred only within the top 1 to 1.5 meters of the subgrade. No testing was conducted at the lower levels of the trench during the backfilling. The geotechnicians testified they tested at the levels available on attendance.

[53] None of the geotechnician reports up to October 13 indicated that the soil moisture content required adjustment or further compaction, with the exception of the one test of five on Colonsay Road, October 5, 2009. In that instance, at .9 meter it was found to have been insufficiently compacted in one area. After further compaction it met 99%.

[54] In support of Mr. Tedesco’s view that the soil was to too wet for compaction, the plaintiff called Mr. Stephen Blaney, P.Eng, a consulting construction engineer with CCI Group, a geotechnical engineering firm. Mr. Blaney has more than 35 years’ experience in construction and municipal infrastructure work. Although he has worked and consulted in the field, he is not a geotechnical engineer.

[55] Mr. Blaney’s opinion was that the settlement-depression problems that occurred in October 2009 in various locations on Silver Aspen Drive, Colonsay Road and Weeping Willow Lane, was because the backfill material the Town required Tedescon to use was of questionable quality due to high moisture content. As such, compaction could not have been achieved at the lower levels. He based his opinion on the April 13, 2009 Trow report, which noted the native soil from bore hole tests as moist to very moist, and an incomplete investigation of the areas that failed in 2009.

[56] In Mr. Blaney’s opinion had Trow fully tested to the lower depths of the native backfill as it was placed in lifts in the sewer trench it would have determined the backfill was unsuitable for its intended purposes. It could have been replaced during the original construction in 2009, thereby avoiding the subsequent settlement to Royal Orchard Blvd. and Colonsay Drive in February and March 2010. Trow, by not testing to determine compaction and suitability at the lower trench levels and the Town by not providing an adequate contingent amount for imported materials had set the contractor up for failure.

[57] The material used failed because it was poor quality silt and/or clay. It could never have been adequately compacted under normal construction site conditions in the wet fall of 2009.

[58] Contrary to Mr. Tedesco’s evidence that the photographs entered as Exhibit No. 1, Tab 48, pages 1-4 showed muddy and soupy soil at the Silver Aspen and Colonsay trenching sites, Mr. Blaney, when shown the photographs, testified he did not see soil of that description.

[59] The Defendant called Mr. John Westland P.Eng, a geotechnical engineer with Golder Associates, a geotechnical consulting firm to provide an opinion as to: 1) the suitability of the trench backfill for compaction, and 2) the likely cause of settlement on Royal Orchard Blvd. and Colonsay Road.

[60] Mr. Westland observed that the Trow testing records, as to the water content and degree of compaction tested on the two roads in question, met the specified degree of compaction, 98% of the SPMDD, and the water content of all the backfill, not more than 3% of the optimum water content for compaction, as required. The tests indicated that the backfill materials had the appropriate water content for compaction. As such compaction of the native soils to the required level was achievable. Even though Trow had tested only at the upper levels of the trench, the same native backfill with the same moisture content used at the upper levels was also used to backfill the lower portions of the trench.

[61] Mr. Westland testified there were two possible reasons for the lower portions of the trenches on Royal Orchard Blvd. and Colonsay Drive to have been poorly compacted leading to the significant settlement that occurred:

1. The trenches were narrow requiring trench boxes and shoring which would have made it awkward to control backfill lift thicknesses and to provide access for compaction equipment, the hoe pac, while the trench boxes were in place, making it difficult for the contractor to achieve the required degree of compaction; or

2. The material available for use in the lower portion of the trench was all saturated and unsuitable for compaction while the backfill available in the upper portion of the trench was suitable, as indicated by the Trow test results.

[62] The more plausible explanation was the former because the same material used at the lower levels of the trench was used in the upper levels where testing revealed the moisture content as appropriate and compaction achieved. The degree of settlement, 300 millimeters in places, occurred because loose unconsolidated soil at the bottom of the trench became consolidated. The wetness found in the test pit on Royal Orchard was likely as a result of rain, ice and snow melt through the cracked pavement.

[63] In this instance, I accept the explanation as provided by Mr. Westland as being both logical and reasonable.

[64] Plaintiff’s counsel argued that the only way to have determined whether there was insufficient compaction at the lower levels on Royal Orchard and Colonsay in 2010 would have been to conduct further boreholes at the time. I accept the explanation by Mr. Kumar, and Mr. Yip that it would have been unnecessarily risky and problematic. Such a procedure would have exposed the pipes to being drilled into, and all providers of underground services would have to approve. Moreover, as noted by Mr. Westland, the settlement was caused by loose material at the lower level that had consolidated. The tests would only have confirmed consolidation.

[65] Even if soil suitability was the cause, I take into account that Tedescon was responsible under the contract to advise the Town through its site inspector (CFA) if there was concern as to the suitability of the native soil backfill. I accept the evidence of Simon Leung, Prathapan Kumar, and the various Trow geotechnicians that Mr. Tedesco did not raise any concerns as to the suitability of the soil during the August, September and October trenching and backfill operations.

[66] In my view, Mr. Tedesco tried to shift responsibility to Trow in not testing more frequently, and in particular at the lower levels of the trenches, whereas it was his firm’s responsibility to not only notify when testing was required but to make available the lifts for testing. Tedescon was responsible for ensuring compaction and the only way it could be ensured was through testing.

[67] Trow did not owe a duty to the contractor to conduct inspections or testing. Its duty was to the project owner, the Town with which it had a contractual obligation. In Twin Cities Mechanical and Electrical Inc v. Progress Homes Inc., [2005] NLTD 134 at para. 53 citing The Canadian Law of Architecture and Engineering, (2nd edition) at p. 130 it is noted that the engineer’s duty of inspection is to the client, the project owner, not the contractor. The principle is based on the doctrine that the method of executing the work is within the purview of the contractor.

[68] In substance, if the backfill material was suitable for compaction at the upper levels of the trench, then the cause of the subsequent settlement on Royal Orchard Blvd. and Colonsay Road was due to a lack of compaction of the same backfill at the lower levels of the trench.

[69] However, Mr. Tedesco contends that he had an oral agreement with the Town as of the March 29, 2010 roadside discussion concerning remedial work as recommended on Royal Orchard Blvd. and Colonsay Road to perform the work as an extra to the contract for which the Town would compensate Tedescon. Mr. Kumar, on the other hand, maintained on behalf of the Town that no such agreement occurred. To the contrary, the position of the Town, consistent with notification as given in the email of October 13, 2009, Exhibit 1, Tab 11, was that any settlement due to work deficiencies should be rectified by the contractor at no additional cost to the Town.

[70] In this instance, I find that the Town did not reach an agreement with Tedescon through Mr. Kumar to consider the remedial work as an extra. Rather, the Defendant accepted the Trow opinion that settlement occurred as a result of insufficient compaction at the lower levels of the trench. In the email, dated April 5, 2010 to Mr. Tedesco and his project manager, Nick Gagliardi, Mr. Kumar referred to the remedial work as “compaction deficiency works”.

[71] Further, in response to Mr. Gagliardi’s email of April 6, 2010 that Tedescon Infrastructure Ltd. would be submitting a claim to recover all costs for completed work, Mr. Kumar in his letter of April 19, 2010 re-asserted the Town’s position that Tedescon should rectify the deficiencies along Colonsay Road and Royal Orchard Blvd. at no extra cost to the Town. Tedescon was responsible to ensure compaction.

[72] I find that there was no oral agreement to compensate Tedescon for remediation of the settlement due to the consolidation of loose unconsolidated backfill. Similarly, the claim based on quantum meruit fails as well because the remedial work was required under contract as a result of the work deficiency.

[73] In concluding that Tedescon’s claim in contract or in the alternative, on a quantum meruit basis fails, it is unnecessary to determine whether the amount claimed for the work completed by Tedescon was reasonable.

[74] The action is dismissed and costs will follow the result. If the parties are unable to agree as between themselves as to the matter of costs, counsel may make written cost submissions no more than four pages in length, including a costs outline within 15 days of the release of this judgment. Responding submissions are to be made within a further 15 days.

A.J. O’Marra J.

Released: April 24, 2014

COURT FILE NO.: 10405124
DATE: 2014/04/24

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

Tedescon Infrastructure Ltd.
Plaintiff

– and –

Town of Markham
Defendant

REASONS FOR JUDGMENT

A.J. O’Marra J.

Released: April 24, 2014