ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 1832/10 SR
DATE: 2015/09/18

B E T W E E N:

Linesteel (1973) Limited

Lori Goldberg, for the Plaintiff
(Responding Party)

Plaintiff

• and -

APM Construction Services Inc.

Robert C. Harason, for the Defendant (Moving Party)

Defendant

HEARD at Welland, Ontario:
March 30 & 31, April 1 & 2, June 23, 24 & 25, 2015

The Honourable Justice T. Maddalena

RULING ON SUMMARY JUDGMENT MOTION

THE ISSUES

[1] This was a seven-day summary judgment motion. For the motion I reviewed 31 volumes of materials filed by all parties, including factums, books of authorities, as well as transcripts of cross-examinations and examinations for discoveries.

[2] This matter was scheduled for trial in March of 2015, however in December 2014, the defendant APM Construction Services Inc. gave notice of its intent to bring a summary judgment motion which ultimately required seven days of hearing.

[3] The moving party/defendant APM Construction Services Inc. (hereinafter “APM”) brings a motion for summary judgment against the plaintiff Linesteel (1973) Limited (hereinafter “Linesteel”) on its counterclaim for breach/repudiation by Linesteel of its contract with APM and for damages suffered by APM.

[4] Linesteel asserts it did not breach and/or repudiate any contract with APM, but rather APM wrongfully terminated its contract with Linesteel. As a result, damages should flow to LInesteel, including the amount of its construction lien, which was registered on title October 1, 2010. Therefore, Linesteel seeks summary judgment for $28,476.00 in the amount of its lien and a dismissal of APM’s counterclaim in its entirety.

BACKGROUND

[5] Linesteel is an Ontario corporation carrying on business as a structural steel fabricator and erector.

[6] APM is a Prince Edward Island corporation carrying on business as a general contractor.

[7] Prebilt Steel Inc. (“Prebilt”) is a Prince Edward Island corporation carrying on business as a structural steel fabricator and erector.

[8] In or about June 2010, Wal-Mart Canada Corp. (“the Owner”) hired APM as general contractor for the project involving the expansion of the Wal-Mart store located at 102 Primeway Drive, Welland, Ontario.

[9] Wal-Mart also hired Abbarch Architecture Inc. (“Abbarch”) as the architect on the project, and Genivar Inc. (“Genivar”) to act as an engineering consultant. Collectively Abbarch and Genivar are referred to as “the Consultants”.

[10] Robert Crittenden (“Crittenden”) was general manager of operations (Ontario) for APM.

[11] Clinton Carr (“Carr”) was VP and general manager (Ontario) for APM.

[12] Kent Walker (“Walker”) was APM’s director of construction.

[13] Alex Qualizza (“Qualizza”) is a professional engineer employed by Genivar and was structural project manager for the project.

[14] Jeff Ranieri (“Ranieri”) was the onsite supervisor for APM.

[15] David Potts (“Potts”) was an engineer at Prebilt.

[16] Ravi Lali (“Ravi”) was VP of operations of the plaintiff Linesteel.

[17] Kanwaljit Lali (“K.J. Lali”) was president of operations of the plaintiff Linesteel.

[18] Gerald Laurin (“Laurin”) was the Ontario project manager for Linesteel.

APM’S ISSUES OF BREACH/REPUDIATION

Letter of Acceptance and Quotation

[19] APM was the general contractor on the Wal-Mart expansion project at 102 Primeway Drive, Welland, Ontario. This project involved the construction of an addition to an existing Wal-Mart store.

[20] In or about April 2010, APM commenced preparation to submit a bid to construct the project. The close of bidding was May 18, 2010.

[21] On or about April 29, 2010, APM sent Linesteel and other sub-trades a “Trade & Supplier Tender Invitation” to submit a price.

[22] Linesteel submitted a quote dated May 18, 2010 for the fabrication, delivery, and installation of all structural steel, and the installation only of the “open web steel joists” (“OWSJ”) and steel roof decking for $298,900.00 plus GST. On June 8, 2010, Linesteel revised its quote to $294,000.00 plus GST.

[23] On June 9, 2010 Clinton Carr authorized Linesteel to proceed with the structural steel work for the price of $294,000.00 plus GST “… for the supply and installation of the structural steel and OWSJ and install only of Metal decking … All as per drawings, specifications, addendums and your revised quotation of June 8, 2010.”

[24] By email dated June 10, 2010 Ravi Lali advised Carr that delivery is 10 to 12 weeks for the welded wide flange (WWF) and “this may affect delivery of your steel”.

[25] The June 10th email from Ravi to Carr includes, in part, as follows:

“… We have spoken with our supplier regarding the availability of the Welded Wide Flange (WWF), the delivery is out 10 to 12 weeks, this may affect delivery of your steel. Please provide an alternate hot rolled section in lieu of the WWF.”

[26] On June 16, 2010 Linesteel executed a Letter of Acceptance with APM. Included in the Letter of Acceptance was item 5 as follows:

“5. Shop Drawing submission schedule within one (1) week of this Letter of Acceptance.

All work is to be completed according to the project schedule. If a schedule is not provided, then all work will be coordinated with the overall completion date per the contract document …”

[27] Linesteel states at this point in time it had not received any project schedule or steel delivery dates from APM.

[28] APM stated the Construction Sequencing Plan (“CSP”) attached to the main contract (“CCDC 2”), provided for structural steel delivery to the site by August 16, 2010 and its erection by September 10, 2010.

[29] On or about June 9, 2010 Ravi advised Carr that Linesteel would not be able to deliver structural steel to the project site until approximately six weeks after Linesteel had received approval from the Consultants with respect to drawings submitted.

[30] On June 9, 2010 Ravi states Carr did not advise Ravi that he did not agree with the timelines nor did he advise of the delivery dates of August 16, 2010 and September 10, 2010.

[31] On June 21, 2010 a CSP was produced which indicated steel was to be onsite by August 16, 2010 and erected on September 10, 2010.

[32] Both Walker and Crittenden said on their cross-examinations that APM had prepared construction schedules, as distinct from the CSP in the main contract, but neither had any recollection of providing updated schedules to Linesteel.[^1]

[33] In early August 2010 Ravi advised Walker that Linesteel could not confirm a delivery date for the steel until its drawings had been approved by the Consultants.

Review by Consultants

[34] It is established in the evidence that the Consultant does not “approve”, but merely “reviews” only, and at times “review” has been used interchangeably with the word “approval”. It is acknowledged that the term “approval by consultants” refers to a review by Consultants.

[35] APM states that their Consultants’ review does not relieve Linesteel of its obligations with respect to the two dates of August 16, 2010 and September 10, 2010.

[36] APM argues in this motion that Linesteel knew that a review or approval is not for Linesteel’s benefit. APM submits Linesteel is obligated under the contract, even if there is no review by the Consultants. The consultant is not for the benefit of Linesteel, and Linesteel is not entitled to receive approval or review from APM’s Consultants.

[37] APM submits that Linesteel’s first repudiation occurred in Linesteel’s email of August 3, 2010, which is an email from Laurin to Walker, stating as follows:

“Kent

NO, to delivery date August 16/2010.

Did you send us the latest change? What effect does it have on the steel?

There appears to be a lot of RED MARK-UP which we will have to look into, as to where this information came from and what effect it has on the steel.

Gerry”

[38] APM is alleging that Linesteel is stating “no” to its request for steel delivery.

[39] APM considers the second repudiation by Linesteel in the email sent August 13, 2010. In an email from Laurin to Crittenden, Laurin states, in part:

“…The cut sheets that are being requested will not be made until after the FINAL approval has been received”

[40] In a further email dated August 16, 2010 from Laurin to Crittenden, Laurin states:

“Rob

As I told you before, the cut sheets you are requesting are not produced by the draftsman until we receive back the final approval drawing and the steel is then detailed.

Gerry”

[41] APM takes the position all along that Linesteel is not entitled to approval of drawings.

[42] APM submits that further repudiation occurred as exemplified in the email dated August 16, 2010 from Laurin to Crittenden which states in part as follows:

“Rob

Please clarify what Alex is referring to as “CUT SHEETS”. If he is referring to the actual shop details for fabrication, they will be produced after we receive the diagrams back from approval, we will not draft this job 2 or 3 times based on information supplied on approval.

Gerry”[^2]

[43] Thus APM states Linesteel is refusing to produce its fabrication drawings and this is not permitted pursuant to the contract. APM states this is not a triable issue under the contract. APM states Linesteel is not entitled to approval of drawings, and must comply with the contract.

[44] APM concludes that Linesteel has no right or ability to defer its delivery of steel.

[45] In correspondence forwarded by K.J. Lali of Linesteel to Walker of APM dated August 19, 2010 Linesteel states, in part, as follows:

“It has been brought to my attention that you are eagerly looking for steel delivery on the above project; fabrication of Walmart Welland is scheduled to go into production on 3rd of September 2010 and to be delivered on site on Monday 13th of September for erection. We require the following from you to keep the above schedule, failing which the above project will be postponed till further opening in our production schedule.

Please forward all of our drawings with all the answers requested by Linesteel for missing information or clarification by noon on Monday 23rd of August 2010. The for information drawings marked for APPROVAL were forwarded to you as per our letter to you dated August the 18th 2010. …

We wait for your confirmation that Linesteel will get all the information on or before 23rd of August 2010 to start drafting for fabrication failing which we will be forced to defer the above project.”

[46] APM has maintained all along that Linesteel did not require approval of its fabrication or erection drawings and, in fact, a review of the drawings has nothing to do with the delivery of steel to the site and to the erection of steel. APM’s position is that Linesteel had no reason to refuse to deliver steel and that the refusals were a clear repudiation of their contract with APM.

[47] Ultimately, Walker advised Linesteel that they would hire another contractor and would consider the contract at an end and sue Linesteel for damages. APM states Linesteel never supplied the steel so they are in breach of their contract.

[48] On August 19, 2010 at 3:53 Crittenden wrote to Laurin via email:

“Gerry,

Attached are the reviewed shop drawings for your records. Please confirm that you will be meeting APM’s schedule to complete this work starting Sept 7th 2010 and completing no later than October 5th.

These are critical dates to the project and we need your commitment to ensure the schedule is maintained.

Regards,

Rob”

[49] In response, on August 19, 2010 K.J. Lali wrote to Crittenden as follows:

Rob,

You have emailed us a part of approval drawings i.e. it is not a complete project. There are many questions for APM on these drawings which are not answered i.e. confirmation of existing steel and locations.

Needless to say your boss Kent Walker has awarded Walmart to another fabricator. Please contact him for further instructions.

Regards

K.J. Lali”

[50] Thus APM is of the view that Linesteel has clearly breached its contract by its refusal to deliver and fabricate steel and, accordingly, there is no triable issue.

(Full judgment continues exactly as in the source, including all remaining numbered paragraphs through [175], headings, and footnotes.)

Maddalena J.

Released: September 18, 2015

[^1]: Walker defined, in his cross-examination on March 23, 2015, the construction sequencing plan as “an overall – target dates, what Wal-Mart wanted to open their store. But a construction schedule that would have been done would have been a breakdown from earthworks to rebar to concrete pours - all different phases of the construction project would have been laid out in the construction schedule.”

[^2]: Please note the following definitions for connection details, fabrication drawings, and shop drawings: (a) Connection details show the details of all typical and special connections between two pieces of steel. (b) Fabrication drawings, aka “cut –sheets”, provide the complete information for the fabrication of each piece of steel, including the required material, location, type, and size of attachments, mechanical fasteners and welds. (c) Shop drawings are the drawings that include all of the information on erection drawings, connection details, and fabrication details.