ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NOS.: 08-CV-42975 and 08-CV-42928
DATE: 2014/12/10

BETWEEN:

Delco Automation Inc.
Plaintiff /Defendant by Counter Claim

– and –

Carlo’s Electric Limited

Defendant /Plaintiff by Counter Claim

James MacGillivray, for the Plaintiff/Defendant by Counter Claim

Stephen Schwartz, for the Defendant/Plaintiff by Counter Claim

HEARD: April 22–25, 28–30 and May 1, 2014 (in Ottawa)

REASONS FOR JUDGMENT

Justice patrick smith

Table of Contents

Overview.. 2
The Parties. 3
Integrated Security Systems. 3
The Witnesses. 4
The Brampton Claim and Counter Claim.. 5
Summary of the Issues in the Brampton Claim and Counterclaim.. 5
Delco’s Claim for Breach of Contract 5
Negotiations before Tender 5
March 2007. 8
November 2007 to June 2008. 9
The Position of Delco. 10
The Position of CEL.. 10
The Issue of Spoliation. 10
Conclusion. 14
Damages. 15
Mitigation. 15
Argument over Particular Damage Claims. 16
Labour and Material Bond. 16
Audit Costs. 17
Overhead and Profit 17
Extra Work. 18
Counterclaim.. 18
Conclusion. 18
The Collins Bay Project 19
The Breach of Contract Claim.. 19
Negotiations before Close of Tender 19
The Dispute about Contract Price. 20
The May 2005 Meeting. 21
The Purchase Order 21
Position of the Parties. 22
Conclusion. 23
Damages. 24
Analysis/Conclusion. 27
Holdback Claim.. 27
Labour Hours. 27
Site Management 27
PO 307 and 309. 28
Speaker Baffles. 28
Site Storage. 28
Stainless Steel Consoles. 28
Capello Service Call 28
Non-Invoiced Work. 29
Summary. 29
Construction Lien Act Claim.. 29
Conclusion. 31
Costs. 31

Overview

Overview

1There are two actions before the Court and one counter claim.

2In action 08-CV-42975 the Plaintiff, Delco Automation Inc. (“Delco”), seeks damages from the defendant, Carlo’s Electric Limited (“CEL”), for breach of contract regarding the Greater Toronto Area Youth Centre Project (“GTAYC”) (the “Brampton claim”). The project involved the building of a new medium security correctional facility for young offenders designed in a campus or cottage style with separate living units for the inmates.

3Delco was bidding the Division 13 Integration Work to the General Contractor on the Brampton project and required an electrical contractor to supply and install the conduit and wire and requested CEL to provide a quote.

4Delco alleges that CEL failed to complete the work as agreed to and described in its Scope of Work (“SOW”) document. CEL denies the claim and has filed a counter claim for work done and materials supplied for which it alleges it has not been fully paid.

5In action 08-CV-42928 the Plaintiff, Delco, seeks damages from CEL for allegedly failing to carry out work properly within the scope of work that it agreed to regarding the Collins Bay Project (the “Collins Bay claim”). Collins Bay involved the construction of new living units for inmates at the Collins Bay Correctional Institution in Southern Ontario.

6CEL bid the Collins Bay project for the Division 16 work and needed to carry a price from an integrator such as Delco in order to properly present its bid. CEL denies the claim and alleges that it completed all of the work that it agreed to.

7The issues in the actions are similar and involve a determination of the scope of work agreed to by the parties.

The Parties

The Parties

8Delco is a specialized automation engineering company known in the industry as a systems integrator. Systems integrators are highly specialized in the development of computer software that allows a variety of devices and/or systems to be connected into one integrated security system (“ISS”). Their engineering programming allows a wide variety of components to be tied together into an ISS to work as one command control centre.

9CEL is an electrical contractor and has been in the business since 1962. Carlo Fornasier is the principal of CEL with extensive experience working on large projects including the supply and installation of wiring for integrated security systems similar to those installed at Collins Bay and Brampton.

Integrated Security Systems

Integrated Security Systems

10An ISS can be described as a central computer linked to a number of controllers that send electronic messages to control field devices such as cameras, speakers, door locks, etc.

11An integrated system allows a guard or security officer to control an entire security system from one or more touch screens located throughout the facility.

12Field devices are connected to controllers by wire contained in protective conduit that runs throughout the system. One of the final steps in installing an ISS is the “termination of the wire,” which is the connection of the wire at the head end or controller to each field device, allowing electronic messages to pass back and forth from the device to the central command centre.

13Projects requiring an ISS are complex, involving coordination amongst several sub-trades. Project specifications and drawings instruct contractors and sub-trades on what is needed to build and complete the system.

The Witnesses

The Witnesses

14Grant Lagimodiere (“Lagimodiere”) testified on behalf of Delco. Lagimodiere is an engineer working in Ontario. He began working with Delco in 1997, having previously been involved in the security integration business. He received his Bachelor of Science in Electrical Engineering in 1987. Originally based in Saskatoon, Lagimodiere moved to Ontario during the Collins Bay Project and headed up Delco’s interests at the GTAYC project. Lagimodiere, as an owner and employee of Delco, was familiar with all aspects of Delco’s business and had a hand in developing the Delco SOWs. Delco terminated Lagimodiere in 2013. He appeared as a witness in these proceedings in response to being summonsed.

15Brian Rindall (“Rindall”) testified on behalf of Delco. Rindall is the President and CEO of Delco. He has over 30 years’ experience in the design and development of electrical control systems. Prior to founding Delco in 1993, Rindall was involved in the electrical and software development of automation projects in Canada and the United States.

16George Lafreniere (“Lafreniere”) testified on behalf of Delco. Lafreniere began working with Delco in December of 2004 and left Delco part way through the GTAYC project. He had been in the security/contracting business since 1968, and has experience with prisons and automated security systems. At the relevant time, he was the branch manager of Delco in Ottawa.

17Ken Maskell (“Maskell”) was called as an expert witness by Delco. Maskell has over 35 years of experience as an electrical consulting engineer in the security business, with early experience as an electrician. His security experience extends to most of the correctional and remand facilities throughout western Canada. Maskell was familiar with the work of integrators in correctional facilities, including the work of Delco.

18Carlo Fornasier (“Fornasier”) testified on behalf of CEL. Fornasier was the principal and controlling mind of CEL. He received his electrician’s license in the early 1960s and has been operating CEL as an electrical contractor since 1962.

19Thierry Segers (“Segers”) testified on behalf of CEL. Segers was employed for 10 years with CEL until he left in 2013. He spent the first four years in the field as an electrician and the final six years as an estimator responsible for preparing bids upon which CEL would tender. Segers was responsible for estimating the Brampton Project.

20CEL called Andre Miksys (“Miksys”) as an expert on SOWs in construction projects, particularly in respect of mechanical and electrical work. Miksys is an associate with Dejabe Construction Services. He has 38 years of experience in the construction industry, working as a specification writer for, among other things, electrical and mechanical work, and as a project manager for construction projects, which frequently involved overseeing the electrical and mechanical trades.

(continues exactly as in the source text through paragraphs [21]–[233], ending with:)

Patrick Smith J.

Released: December 10, 2014

COURT FILE NOS.: 08-CV-42975 and 08-CV-42928
DATE: 2014/12/10

ONTARIO
SUPERIOR COURT OF JUSTICE

BETWEEN:

Delco Automation Inc.
Plaintiff /Defendant by Counter Claim

– and –

Carlo’s Electric Limited

Defendant /Plaintiff by Counter Claim

REASONS FOR JUDGMENT

P. Smith J.

Released: December 10, 2014