2018 ONSC 2219

COURT FILE NO.: CV-14-501818

DATE: April 5, 2018

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Roni Excavating Limited

R. Kennaley, for the Plaintiff Fax: 519-426-3777

Plaintiff

• and -

Plus Development Group Corp.

R.D. Rollo, for the Defendant Fax: 416-369-0665

Defendant

HEARD: November 3, 7, 8 and 16, 2017

Master C. Albert

[1] Plus Development Group Corp. (“Plus”) is the owner and developer of a condominium building at 251 King Street East (the “Project”). Plus contracted with Roni Excavating Limited (“Roni”) to excavate and dispose of soil and fill from the site. Roni performed the services but Plus failed to pay Roni the amount charged. Roni claims payment and on February 26, 2014 registered a claim for lien for $857,374.49 for contract work and extras. Plus initially counterclaimed for $500,000.00 for deficiencies and delay but prior to trial, triggered by Roni's motion for summary judgment, Plus abandoned its counterclaim and agreed to pay Roni $332,131.80[^1] of its claim, with the $525,242.69 balance of Roni's claim to be determined at trial.

[2] The two main issues are:

a) Was Roni entitled to charge Plus extra for the increased cost of disposing of the excavated materials as impacted (contaminated) materials rather than as MOE Table 2 clean materials and if so, how is the extra properly quantified? Roni values this portion of its claim at $451,263.23. Plus’ position is that disposal as contaminated materials is included in the contract price because Roni knew or ought to have known that the excavated materials were not clean when it submitted its bid. Plus takes the alternative position that portions of the excavated materials for which Roni charged extra were not contaminated.

b) Was Roni entitled to charge extra for other miscellaneous items, valued by Roni at $56,445.78, for disposing of mixed garbage and debris, plus $15,532.98 for other changes to the scope of work. Plus’ position is that its project manager did not have authority to approve these extras and changes.

[3] Justice Akhtar signed the judgment of reference on September 23, 2015[^2]. In accordance with the mandate to conduct the trial in as efficient a manner as required to meet the needs of the case (section 67 of the Construction Lien Act, R.S.O. 1990, c.C.30 (the “Act”)), the trial proceeded as a summary trial with affidavit evidence in chief. Four trial days were required.

I. Background

[4] Plus owns 251 King Street East. Walter Aronovitch is president and owns 70 percent of Plus, and Ali Mohtahshami is vice-president and owns 30 percent of Plus. Plus retained The Moro Group (“TMG”) to act as its construction manager on the Project. Ivan Rak was the project manager in charge of the site on behalf of TMG. Vijay Chansingh was a site superintendent employed by TMG. Plus did not call either Mr. Rak or Mr. Singh as trial witnesses.

[5] According to the August 2, 2011 report of geotechnical engineers Terraprobe Limited the surface of the site sits at an elevation of 81 masl[^3], and the site was to be excavated to a depth below 73 masl[^4] to allow for several levels of underground parking for the proposed condominium building.

[6] Roni is an experienced excavator, having been in the business for over 33 years. According to its founder and president, Giocondo Niro, Roni owns over 300 pieces of excavation equipment. Mr. Niro characterized this Project as a small job.

[7] According to Mr. Niro, Mr. Rak told him about the Project and represented to him that the materials to be excavated were environmentally clean materials, as defined by environmental protection regulations and referred to as “MOE Table 2”. Plus did not adduce evidence from Mr. Rak to refute Mr. Niro’s evidence.

[8] The significance of whether the materials to be excavated qualified as MOE Table 2 materials is cost: a different and more expensive disposal site must be used to dispose of materials that do not qualify for MOE Table 2 disposal.

[9] In January 2013 Roni’s estimators Andrei Pachkalov and Norman Pires prepared Roni’s quote #R0884 for $450,600.00 and Roni submitted it to Mr. Rak on January 22, 2013. The quote provided in part as follows under “Scope of Work”:

1. Bulk excavation up to weathered bedrock at average elevation 71.4 and bulk excavation in shale up to P4[^5] level subgrade elevation @ 60.10 based on structural drawings done by Halcrow Yolles dated October 7, 2012….

2. Remove shoring spoils shoring spoils to be neatly stockpiled by shoring contractor…

3. Dispose of all surplus excavated materials generated by Roni operations only.

[10] Roni’s quote further provided as follows under “Notes & Exclusions”, excluding from the scope of work:

• any excavation outside of shoring area.

• Removal/disposal of material exceeding MOE Table 2 RPI or materials exhibiting unnatural odours or staining.

• Disposal of chemically or aesthetically contaminated materials under the EPA Act.

• Removal of unknown obstructions, buried building foundations, buried debris, boulders, concrete sidewalks and garbage.

• Backfill on top of slab and removal of spoils generated from other trades, unless indicated otherwise.

[11] Roni relied on Mr. Rak’s representation that the materials to be excavated qualify as MOE Table 2 materials. Mr. Niro’s evidence is that “we proceeded on the basis of trust, as we often due (sic) in our work”[^6]. Roni's fixed price quote expressly excluded materials that did not qualify as MOE Table 2 materials. Roni also provided Mr. Rak with a list of rates that would be charged for labour and materials for extras to the contract.

[12] In early 2013 Mr. Rak confirmed to Mr. Niro that the contract had been awarded to Roni but Plus did not prepare and present a formal contract to Roni for signature until the job was near completion, in November 2013, many months into Roni's performance of the contract. The written contract was backdated to February 13, 2013 and reflected a contract price of $449,000.00 plus HST for a total of $507,370.00. Roni’s Mr. Niro signed the contract as typed but, according to Mr. Niro, Roni did not agree to or initial any handwritten changes. Mr. Niro does not dispute that the typed contract reflects the parties’ agreement. Mr. Mohtashami, vice-president of Plus, reviewed the written contract before TMG sent it to Roni. Plus did not execute the contract.

[13] The written contract identifies Plus as the owner and TMG as the construction manager for Plus and includes the following provision regarding extras:

7. The Parties herein agree that no credit or extras to the Contract shall be deemed effective until the Contractor receives authorization in writing from the Owner or Construction Manager.

[14] Schedule B to the contract provides at paragraph 43 as follows:

The contract price is based on material meeting MOE Table ‘2’ RPI criteria. The Contractor shall dispose of contaminated soil at a rate of $47 per m. tonne.

[15] I am satisfied that the written contract, drafted by or on behalf of Plus, but not executed by Plus, reflects the parties’ agreement that contaminated soil would be disposed of at the rate of $47.00 per metric tonne as reflected in Roni’s bid.

[16] At paragraph 4 the written contract includes a list of Schedules to the contract. Included in the list is Schedule “D” and listed in Schedule “D” are the following Terraprobe Limited ("Terraprobe") reports:

• Proposed Residential Development 251 King Street East updated August 2, 2011

• Phase One Environmental Site Assessment 251-255 King Street East and 2 Abbey Lane February 10, 2012

• Phase Two Environmental Site Assessment 251-255 King Street East and 2 Abbey Lane May 17, 2012

[17] Based on Mr. Rak's representation that the materials to be excavated met MOE Table 2 requirements, Mr. Niro made disposal arrangements with John and Mary Malanca of RCG, a company in the business of disposing of MOE Table 2 materials, to dispose of the excavated materials from the Project at RCG’s Bloomington site. Mr. Niro had enjoyed a long standing working relationship with RCG, built on trust. According to Mr. Niro the Malanca’s accepted the excavated materials on Mr. Niro’s word that the materials were clean and that a soils report confirming that the materials met MOE Table 2 requirements would be provided in due course. The reason given by Mr. Niro for conducting business in this manner is that such jobs are often time sensitive and the parties often conduct business informally. Evidence given by Plus witnesses Mr. Aronovitch and Mr. Mohtashami corroborates that time was of the essence on this Project.

[18] I question the efficacy of Roni and RCG running their businesses in this manner, particularly when issues of contamination are central to the arrangements. However, it appears that after this case Mr. Niro changed Roni’s practice and refused to operate on the basis of trust. I accept Mr. Niro’s evidence that for 33 years he had conducted business in this manner. That he was able to do so for three decades without incident shows a significant degree of integrity and trust on the part of the people who work in this industry. That he changed his practice after working with Plus and TMG on this Project speaks to Mr. Niro’s honesty and credibility, having suffered the consequences of this lawsuit.

[19] Roni commenced work in March 2013 and disposed of the excavated materials at four disposal sites. From March through June 2013 Roni disposed of garbage from the site at a garbage facility. From June through September 2013 Roni disposed of excavated materials as MOE Table 2 materials at the RCG Bloomington site. From September 2013 until the excavation reached a depth of 73 masl[^7] Roni disposed of materials at Lascape, including (i) excavated materials removed directly from the Project site and (ii) materials previously excavated materials that had been deposited at the RCG Bloomington site and were subsequently transferred to Lascape as materials exceeding MOE Table 2 levels. Finally, after excavating to a depth of 73 masl and until reaching the final excavation depth, Roni disposed of the excavated materials at an MOE Table 2 site other than RCG.

[20] According to Mr. Niro, Roni and Plus never discussed contaminated soil until September 2013 when events occurred that caused Mr. Niro to suspect that the soil was contaminated.

[21] After many truckloads of excavated materials had been deposited at the RCG site Mr. Malanca of RCG asked for a copy of the soils report. Mr. Niro was vague in his evidence as to the date RCG requested the report but from the totality of the evidence I deduce that it was in or about late August or early September 2013. Roni did not call either Mr. or Mrs. Malanca to testify at trial. Having been asked for it, Roni in turn asked TMG for the soils report. Terraprobe had prepared a report for Plus dated May 17, 2012, referred to in this trial as the “Phase Two ESA Report”.

[22] Plus’ position is that the Phase One and Phase Two ESA Reports had been included in the tender package. Mr. Mohtashami, relying on an email of May 24, 2013 from Ivan Rak of TMG, testified that Roni likely received it in the tender package. Mr. Mohtashami was not personally involved in preparing and distributing the tender packages, leaving distribution to Plus’ agent TMG as project manager. Plus did not call Mr. Rak to testify and be cross-examined on the contents of the tender package and whether the Phase Two ESA Report was provided to Roni as part of the package.

[23] Roni’s position, as attested to by Mr. Niro, is that the tender package included drawings for Roni to price “the box” that was to be excavated, but that it did not include Terraprobe soils reports. He testified that he did not see the Phase Two ESA Report until RCG asked for it and he in turn asked TMG for a copy.

[24] The site included native soil and fill materials. The fill materials had been brought to the site by another Plus contractor and deposited on site into the existing basement to support machinery required for the shoring component of the Project, prior to Roni beginning excavation.

[25] The May 17, 2012 Phase Two ESA Report provides that testing of these fill materials (in contrast to the native materials) exceeded MOE Table 2 requirements. Upon receiving a copy of the report and learning of this fact, RCG insisted that Roni remove the materials that Roni had deposited at RCG's Bloomington disposal site.

[26] Mr. Niro’s evidence is that on or around September 20, 2013 he learned from someone on site, and confirmed personally, that there was a diesel smell in the area of the old basement that had been filled with the fill materials and was now being demolished and excavated. Mr. Niro attended at the site and experienced the diesel smell personally. He stopped work in the area of the old basement to further investigate. Mr. Chansingh of TMG told Mr. Niro that the soil from the basement fill would be tested.

[27] Materials that exceed MOE Table 2 requirements must be disposed of at a qualifying disposal site. RCG was a qualified disposal site for MOE Table 2 materials but not for materials exceeding MOE Table 2 thresholds. On or about September 24, 2013 Roni informed Mr. Chansingh that Roni would stop all excavation until the issue was resolved.

[28] Plus and TMG convened a meeting on September 26, 2013 to discuss the contaminated soil issue. Mr. Aronovitch of Plus attended. Roni was not invited and did not know about the meeting.

[29] Plus’ conduct in this litigation is relevant: Plus withheld critical, relevant documents from its productions, not disclosing them until August 31, 2017 with trial only a few weeks away. Documents withheld include the Terraprobe report that followed the August 16, 2013 soils tests and documents related to the September 26, 2013 meeting. The documents that Plus failed to produce include communications from TMG and Terraprobe Inc. to Mr. Mohtashami and Walter Aronovitch. These documents include emails and other communications concerned the quality of the soil, testing and whether Roni should be paid extra for disposing of the soil as contaminated. None of these communications had been copied to Roni and Roni had no way of knowing about their existence without production by Plus.

[30] Mr. Niro testified that he did not discover until September 2013 that some 49 loads of excavated fill that had been removed and taken to RCG in August 2013 were contaminated.

[31] Roni refused to continue with the excavation without written confirmation from TMG or Plus that Plus would pay Roni the contractual extra of $47.00 per metric tonne to remove contaminated materials, including materials already excavated and deposited with RCG as MOE Table 2 materials . Roni did not propose to charge twice to relocate materials previously disposed of at the RCG site but rather proposed that it would net out the cost of the initial disposal. The rate of $47.00 per metric tonne is the rate that had been proposed by Roni in its tender bid, accepted by Plus and incorporated by Plus into the written contract at Schedule B, paragraph 43.

[32] By email dated September 25, 2013 from Mr. Rak of TMG to Mr. Niro, TMG instructed Roni as follows:

“Please proceed with the removal of the contaminated soil at the contract rate of $47/m3. Please submit the tickets from the dump site to confirm the disposal of the material. Please ensure that trucks are on site today.”

[33] Mr. Niro was not satisfied with the email because it described the measurement as “m3” (cubic meters) rather than as metric tonnes. Mr. Rak sent Roni a correcting email later in the day on September 25, 2013 as follows[^8]:

“Further to our conversation, please proceed with the removal of the contaminated soil from the site at the contract rate of $47 per metric tonne. This includes contaminated materials already removed and dumped at the regular site. Any double handling is at no extra cost to the project. Please submit the tickets from the dump site to confirm the quantity of material disposed. Please ensure that trucks are on site today.”

[34] Mr. Aronovitch characterizes TMG’s approval to Roni as having been given under duress, with Plus concerned about Project delays. He deposes in his evidence in chief in respect of events in late September 2013 “I was under financial stress to keep the project moving on pace. Any delay could have resulted in myself and Plus going bankrupt”. Plus asks the court to find that TMG did not authorize the extra and on that basis Roni is not entitled to be paid extra to dispose of the excavated soil as contaminated. I reject Plus’ position on this issue. Plus was in possession of the Phase Two ESA Report and, through its agent TMG, represented to Roni that the soil qualified for MOE Table 2 disposal. Plus clearly agreed to pay extra for materials that exceeded Table 2 measurements and TMG confirmed that it would pay extra in the emails of September 25, 2013.

[35] The extra is quantifiable based on the volume or weight of excavated materials disposed of as contaminated. Disposing of excavated waste at RCG (and other such sites) is conducted on a ticket based system. Once arrangements are made Roni purchases tickets and uses them on a per load basis. The ticket numbers allow the parties to trace materials back to the site from which the materials were excavated.

[36] Roni resumed excavation on September 26, 2013, removing the contaminated materials from the RCG site and from the Project site and depositing the materials as contaminated materials at the Lascape disposal site, a transfer station qualified to receive such waste, keeping track of the volume of materials disposed of as contaminated materials. Documents filed in evidence support the measurement of the contaminated materials for which Roni claims it is entitled to be paid extra.

[37] Terraprobe had conducted further testing and determined that the materials were clean at 73 masl (meters above sea level). Their October 3, 2013 report is based on samples taken on August 16, 2013. Consequently, Roni disposed of materials excavated from below 73 masl as MOE Table 2 materials.

II. Evidence and Issues

(1) The Witnesses

Robert Helik

[38] Robert Helik of EXP, an environmental consultant, as an expert witness, to answer questions regarding soil testing and disposal. His evidence in chief is in the form of an affidavit and a report dated August 31, 2017. His credentials as an expert were unchallenged.

[39] Mr. Helik presented as a credible and knowledgeable witness. He refused to agree with facts that were not within his personal knowledge. He was a firm and reliable witness.

[40] Mr. Helik explained that contaminated materials that are excavated must be disposed of as waste at an approved disposal site. He admitted what common sense tells us: disposing of excavated materials at a site approved for contaminated materials costs more than disposing of excavated materials at a clean waste site. He estimated the additional cost as $47 per unit.

[41] According to Mr. Helik the party disposing of excavated materials at a site for clean materials generally provides a report to corroborate that the excavated materials meet the prescribed criteria for a clean site.

Norman Pires

[42] Norman Pires, an estimator employed by Roni, presented as a forthright and credible witness.

Giocondo Niro

[43] Giocondo Niro is the president of Roni and has been in the excavation business for many years. While he presents as a credible witness, I found some of his evidence to be vague, particularly regarding timelines. However, where he had documentary corroboration for events and dates his evidence was clear and precise.

[44] Examples of vague affidavit evidence in chief are:

a) At paragraph 9 he deposes that Mr. Rak told him Roni had the job, but he does not provide a date. He deposes that the contract came “much later” without specifying a timeframe.

b) At paragraph 16 he deposes that Roni commenced delivering excavated materials to the RCG site, without providing a timeline.

c) At paragraph 19 he deposes that “early in the Project” (again no timeline) “Roni’s site guys” told him about bricks and mixed debris in the excavated materials. He does not provide a timeline or identify the workers who provided this information.

d) At paragraph 25 he deposes that “someone” told him of a diesel smell on site. He does not remember who told him, but it caused him to attend and personally experience the smell.

e) At paragraph 27 he deposes that John of RCG asked for the soils report. He does not provide a timeline.

f) At paragraph 29, in addressing whether Roni had received the Terraprobe report prior to commencing work, he deposed that “nothing in our file suggests we had this report before John (RCG) asked for it” and “we probably picked the Report up for (sic) TMG on site at some point”.

[45] These examples illustrate that Mr. Niro does not have a good memory and he did not maintain a log or journal to record significant events on the job.

[46] Mr. Niro failed to fully inform himself of the soil conditions, accepting the word of the client that the soil qualified for disposal as clean rather than requiring and reviewing a soils report. In doing so he was naïve. At paragraphs 29 and 30 of his affidavit Mr. Niro deposes that he instructed someone (unnamed) at Roni to pick up the Terraprobe report from TMG and deliver it to RCG. He further deposes that he did not read the report before sending it to RCG and to his knowledge no one at Roni read the report before sending it to RCG.

[47] It was only after Mr. Malanca (John) of RCG had asked for and received the soils report and complained about it that Mr. Niro read the report and discovered that Terraprobe had assessed the fill materials as waste, which does not qualify for MOE Table 2 disposal.

[48] I accept Mr. Niro’s evidence as reliable where it is corroborated by other witnesses or documents.

Ali Mohtashami

[49] Mr. Mohtashami is vice-president of Plus and owns 30 percent of its shares, representing a consortium of investors. He was the "hand-on" owner in charge of the Project.

[50] Mr. Mohtashami was a difficult and argumentative witness. He refused to admit obvious facts. As one example, he refused to admit that Mr. Chansingh was the senior person on site in Mr. Rak’s absence. On discovery he had admitted this relatively straightforward fact.

[51] His evidence was evasive, argumentative and contradictory. When asked questions on cross-examination that he did not want to answer he would ask a question in response rather than answer the question asked. For example when asked on cross-examination about the Golder report Mr. Mohtashami replied to counsel questioning him: “Do you want to push your own agenda?”

[52] On another occasion, also under cross-examination, he corrected counsel’s pronunciation of his name in anticipation that counsel would forget the question asked and move on. On more than one occasion this tactic worked.

[53] Mr. Mohtashami was constantly advocating from the witness stand, trying to figure out how opposing counsel would use his answer in argument. For example, when asked in cross-examination whether Mr. Rak and Mr. Chansingh of TMG had authority to instruct the contractors Mr. Mohtashami replied that it could be a “loaded question”, always trying to stay one step ahead of the questioning lawyer and in doing so acting as advocate rather than as fact witness.

[54] In several examples highlighted at trial the evidence in chief tendered at trial by affidavit and viva voice cross-examination contradicted his evidence given on discovery more than two years earlier.

[55] Mr. Mohtashami admitted in cross-examination that he had reviewed the contract before TMG sent it to Roni. He admitted that the contract provided for an extra priced at $47.00 per metric tonne to dispose of excavated materials that exceeded MOE Table 2 requirements, but he added that he did not know what MOE Table 2 meant. I find it contradictory and lacking in credibility that he deposed in chief about excavated materials complying with MOE Table 2 requirements, but under cross-examination he testified that he did not know what MOE Table 2 means.

[56] He ultimately admitted that TMG had authority to approve changes and extras, but that Plus had to approve the price. The evidence contradicts this statement, with clear documentary evidence admitted by Mr. Mohtashami that the parties had agreed on a price of $47.00 per metric tonne to dispose of materials that exceeded MOE Table 2. On discovery Mr. Mohtashami admitted that there was no communication to Roni that TMG did not have authority to approve extras. The contract describes TMG as Plus’ agent on the project.

[57] Mr. Mohtashami’s evidence is further undermined by Plus’ failure as owner to produce its documents when required to do so in this litigation, waiting until almost the eve of trial to produce critical, relevant documents. Mr. Mohtashami was involved in instructing counsel. When questioned in cross-examination about Plus’ failure to produce key documents, he responded that he personally did not do the search, he relied on an assistant and “we produced everything that we had at the time”. The Terraprobe reports, clearly in existence at the time Plus prepared the affidavit of documents [^9], were not listed in Plus’ affidavit of documents. The August 22, 2013 Teraprobe report was not produced to Roni until August 22, 2017, shortly before trial. Mr. Mohtashami’s explanation lacks credibility.

[58] As a witness I find that Mr. Mohtashami is not credible and his evidence is unreliable.

Walter Aronovitch

[59] Walter Aronovitch owns 70 percent of Plus. He is also a law partner of the firm acting as counsel for Plus at trial and a senior litigation lawyer. He testified by Skype from Montreal where he was on business.

[60] In cross-examination Mr. Aronovitch admitted that he did not produce any documents for this lawsuit, notwithstanding that he had received relevant emails, because he had relied on Mr. Mohtashami to provide the documents to counsel. He took a somewhat cavalier approach to his legal obligation to produce relevant documents, stating that no one had asked him to produce any emails, notwithstanding that trial counsel’s office was only a few feet down the hall from his own office. He relied solely on Mr. Mohtashami, who is not a lawyer, to produce the documents. In doing so, critical documents were withheld from production until after all of Roni’s affidavit evidence in chief for trial had been served and filed with the court.

[61] The documents[^10] withheld from Roni include:

a) an email chain dated September 25, 2013 with participants TMG (Mr. Rak, Mr. Chansingh, L. Wagner) and Mr. Aronovich;

b) September 24 and 26, 2013 emails from Matt Bielaski of Terraprobe to Plus (Mr. Mohtashami and Mr. Aronovitch), TMG and others regarding the impacted soil and testing costs; and

c) emails scheduling the September 26, 2013 meeting regarding the impacted soil.

[62] I find it repugnant that Plus, headed by a lawyer who is also the law partner of its trial counsel, failed in its obligation to produce relevant documents in preparation for trial. I find such conduct to be either a careless or else a deliberate attempt by Plus to withhold the truth and mislead both the plaintiff and the court. Taking into account the clear relevance of these documents and their critical nature in ascertaining the truth of what happened, where the evidence surrounding these documents and the events surrounding them conflicts with the evidence tendered by Roni, I accept as more reliable and credible the evidence tendered by Roni’s witnesses.

[63] Further compromising the veracity of Mr. Aronovitch’s testimony is his admission that he instructed counsel to launch a $500,000.00 counterclaim against Roni, a counterclaim that was subsequently abandoned when Roni brought a motion for summary judgment. At trial Mr. Aronovitch admitted that he was unaware of any documents to support the counterclaim.

[64] Taking these factors into account, I conclude that the evidence of Mr. Aronovitch is not reliable. Where his evidence is contradicted by that of another witness, other than Mr. Mohtashami, I prefer the evidence of the other witness as more reliable.

David Smyth

[65] Mr. Smyth is a geoscientist, retained for trial purposes and called as an expert witness by Plus to interpret the reports prepared by Terraprobe. His credentials were not challenged. His evidence was clear and credible.

(2) Was Roni entitled to charge extra to dispose of contaminated materials?

[66] The main issue is whether the contract price includes the cost of removing and disposing of contaminated materials: did Plus represent to Roni that the materials to be excavated were clean materials and if so did Roni have the onus of satisfying itself that the representation was true? Or is Plus liable to pay Roni for the additional cost of disposing of contaminated materials and if so, what is the appropriate quantification of the extra?

[67] The factual issue in dispute is whether Mr. Rak, as agent of Plus, represented to Roni at the bidding stage that the materials to be excavated were clean. If clean, the excavated materials qualified for disposal at an MOE Table 2 site rather than at the more costly Lascape transfer station for disposal of contaminated materials.

[68] Mr. Niro’s evidence that the bid package did not include the Terraprobe reports is corroborated by Norman Pires, the estimator employed by Roni. Mr. Pires testified that the bid package that he received and on which he based his estimates and calculations included drawings showing elevations but did not include any environmental assessments or soil reports.

[69] Roni’s conduct is consistent with Mr. Niro's evidence and his understanding that the excavated materials met MOE Table 2 requirements. Mr. Niro had a long standing relationship with RCG based on trust. It would be contrary to that relationship for Roni to knowingly dispose of materials that exceed MOE Table 2 limits at RCG's "clean" Bloomington disposal site. Given the volume of Roni’s excavation business, it would have made no sense for Roni to deliberately deceive RCG as to the nature of the materials excavated from the Project.

[70] The onus is on Plus as the party seeking to rely on the fact that the tender package gave notice of contaminated materials and included the Phase Two ESA Report, to prove its assertion on a balance of probabilities. Plus could have called evidence from TMG on this point and chose not to do so. On matters of credibility and reliability of evidence, as between Mr. Niro and Mr. Mohtashami, I prefer and accept the evidence of Mr. Niro as more reliable. I accept Mr. Niro’s evidence that Mr. Rak represented to Mr. Niro that the materials to be excavated qualified as MOE Table 2 materials. Plus could have called Mr. Rak as a witness to refute the evidence. Not having done so I draw the inference that Mr. Rak’s evidence would not have been helpful to Plus.

[71] Taking these factors into account, I find that Plus has not met the onus of proving that the Terraprobe Phase Two ESA Report was included in the tender package provided to Roni or that Roni had knowledge that the excavated materials included materials that exceeded MOE Table 2 limits. I prefer and accept Roni’s evidence on this issue and find that Plus did not inform Roni that the materials to be excavated exceeded the MOE Table 2 threshold.

[72] I am not impressed with Mr. Niro’s evidence that once TMG supplied the Phase Two ESA Report Mr. Niro did not read it before delivering it to RCG. Nevertheless, it is consistent with his evidence that TMG represented to him that the materials to be excavated were clean and on that basis he did not take the time to satisfy himself as to whether that representation was accurate and truthful. Perhaps this was naïve on Mr. Niro’s part, but as between Roni and Plus and whether Plus has a contractual obligation to pay for the increased cost of disposing of materials that exceed MOE Table 2 limits, I accept that the contract price was based on clean, MOE Table 2 compliant materials with a $47.00 per metric tonne price agreed to as an extra to dispose of materials that exceeded MOE Table 2 requirements.

[73] Even if the Terraprobe Phase II ESA Report had been included in the tender package, it would not have precluded Roni’s entitlement to charge extra for excavated materials that exceeded MOE Table 2 limits. The quote and the contract specifically contemplate an extra charge for materials that exceed MOE Table 2 limits. The issue is whether Roni would have dealt with the disposal differently, selecting a different disposal site instead of RCG.

[74] I find that the contract price includes excavation and disposal of MOE Table 2 materials and that the parties agreed to removal of non-compliant materials as an extra at $47.00 per metric tonne.

(a) The soils reports

[75] Plus retained Terrraprobe as its soil expert. Plus did not call a witness from Terraprobe to testify at trial and respond to the report prepared by Roni’s expert Robert Helik of EXP. Rather, Plus retained a different expert to comment on the reports of Terraprobe and EXP. I draw the inference that Plus was loathe to subject Terraprobe to cross-examination and I have taken that factor into account in weighing the trial evidence.

[76] The Terraprobe Phase TWO ESA Report tested to 1.5 meters below the surface of the ground and determined that (i) the native materials were clean, and (2) the fill materials included waste that exceeded MOE Table 2 limits. Terraprobe indicated in its report that further testing would be required to know whether the materials below 1.5 meters from the surface were clean.

[77] The fill materials are materials that Plus had brought to the site to fill in the basement of the old building on the site to support equipment that was used to install shoring for the new building’s parking garage and foundation. Once the shoring was in place Roni was to remove the fill materials as part of its contract. It was in these materials that Mr. Niro and his workers discovered the diesel smell and subsequently discovered that the materials were not environmentally clean. It was contrary to environmental regulations to bring contaminated fill from one site to another for this purpose.

[78] Plus did not instruct Terraprobe to test below 1.5 meters. Under cross-examination Mr. Mohtashami testified initially that once Terraprobe recommended delineation (testing) in the Phase Two report, he expected Roni to arrange for it. In the next breath he testified that TMG should have had it done. There is no evidence that anyone from Plus or TMG ever communicated to Roni that Roni was responsible to arrange for environmental testing of soil.

[79] The Phase Two ESA Report is based on 17 soil samples. The names of two experts are affixed to the report at page 22: Shafi Andseta, PhD., P. Geo., QP_RA as Senior Project Manager and Shami M. Qureshi, P. Eng., P. Geo., QP_ESA as associate. The version of the report filed by Roni as an exhibit is unsigned, presumably because the version of the report that Plus finally disclosed to Roni was unsigned. Neither author of the report testified at trial.

[80] The Phase Two ESA Report concludes that in respect of the native soil samples there were no exceedances of the applicable standards for MOE Table 2 materials. However, there were exceedances for metals and inorganic parameters and polycyclic aromatic hydrocarbons in the soil sample taken from the fill materials.

[81] The August 22, 2013 Terraprobe Inc. report reflects the results of soil testing conducted on August 16, 2013. The report classified the soil sample as non-hazardous waste, describing the sample as “the material is non-hazardous waste under O. Reg. 558 Standards from the soil sample collected”. The report stipulates that the results reflect only the sample that was tested and does not reflect that other soil on site would have the same result. Terraprobe reported:

“The analytical results contained in this report should not be considered a warranty with respect to the soil quality or the use of the soil for any specific purpose…. Our scope of work, as directed by the client (Plus) was only limited to the review of the analytical results, and did not include any environmental evaluation/ assessment of the subject site.”

[82] Terraprobe Inc. provided a further report dated October 3, 2013 based on the August 16, 2013 testing. The report was not produced to Roni until just prior to trial.

[83] According to Mr. Niro, Roni’s contract required Roni to excavate to a depth of 19 meters to accommodate several levels of parking for the building to be constructed on site by Plus following the excavation. The contaminated materials were discovered at a depth of 3 to 3.5 meters below the surface.

[84] Mr. Helik, engineer with EXP Services Inc., Roni’s soil expert at trial, prepared a report dated August 31, 2017 after reviewing the Terraprobe reports of February 10, 2012 and May 17, 2012. He also reviewed the soil sample reports of August 22, 2013 and October 3, 2013, the project manager’s daily logs, the Terraprobe geotechnical design report of August 2, 2011 and the Terraprobe excavation and shoring drawings of November 12, 2012.

[85] Mr. Helik concluded that a contractor reading Terraprobe’s Phase One and Phase Two reports of February 10, 2012 and May 17, 2012 is entitled to treat the excavated material as impacted (contaminated) fill exceeding Table 3 requirements (which includes exceedance of MOE Table 2 requirements) and to treat such excavated materials as contaminated waste.

[86] Mr. Helik further opined that based on Terraprobe’s October 3, 2013 report (report #4) the four samples tested met MOE Table 2 requirements but in the absence of testing vertical control samples down to 73 masl all soil must be considered as impacted. He relies on O. Reg. 153/04 which considers impacted soil to extend down to the first clean sample location tested from a lateral and vertical delineation[^11] perspective. Since the only clean vertical delineation samples were taken at an elevation of 73 masl, Mr. Helik concluded that all soil above 73 masl must be considered and treated as impacted[^12].

[87] Mr. Helik explained in his report that if the site had been tested prior to excavation the testing would have determined the extent of the impacted materials above 73 masl. He further explained that timing and costs are factors relevant to deciding when and to what extent to test. Mr. Aronovitch's evidence confirms that these factors were relevant considerations to Plus on this Project.

[88] Mr. Aronovitch testified in chief and reiterated in cross-examination that he was in dire financial straights on the Project and, in his words, “would have been bankrupt” if the Project had to be stopped to deal with contaminated soil. This explains why Plus made the business decision to pay Roni extra to dispose of all of the soil down to 73 masl as impacted. In doing so there would be no need to delay the project to test each truckload of materials (testing that would take one or more days per truck) to determine whether it could be disposed of as MOE Table 2 materials or as impacted materials.

[89] While delineation is relatively inexpensive compared to an overall construction budget, to test every truckload, or to test the soil at various depths, would have caused delay while excavated materials remained stockpiled pending test results. Such testing could have determined the elevation at which soil samples tested as clean but Plus was not prepared to absorb the resulting delay. Whether to conduct such testing is part of the soil management plan for a site.

[90] In Mr. Helik’s experience the soil management process is generally discussed and developed by an owner in consultation with the owner’s consultant and project manager and a soil management plan is developed prior to tendering the excavation and disposal contract. There is no evidence that this was done for this Project.

[91] David Smyth of Golder Associates Ltd. is a geologist retained by Plus after-the-fact to “interpret the condition of soil removed from the site during development”.[^13] Mr. Smyth prepared a report dated September 28, 2017 based on information provided to him by Plus’ lawyers, AMR LLP. He received copies of the Terraprobe reports of August 2, 2011, February 10, 2012 (Phase One), May 17, 2012 ((Phase Two), August 22, 2013 (soil sampling results), October 3, 2013, as well as project drawings, the project manager’s daily logs, from February 25, 2013 to March 4, 2014 and the affidavit and August 31, 2017 report of EXP’s Mr. Helik,

[92] Mr. Smyth’s starting premise was that the first two 2012 Terraprobe reports were prepared for the purpose of redeveloping the site from non-residential to residential land use. He assumed that the 2013 Terraprobe soil sampling report was prepared to determine the quality of soil for disposal. Plus did not provide a copy of the Terraprobe contract to Mr. Smyth.

[93] Mr. Smyth opined that the purpose of a geotechnical assessment is for load capacity, and not for purposes of assessing contamination. I accept that Terraprobe’s August 2, 2011 geotechnical report cannot be relied on for environmental purposes but only for load capacity purposes.

[94] Mr. Smyth further opined that the Phase One and Two Terraprobe reports classified the soil as Table 3 standards and since MOE Table 2 standards are more stringent, someone reading the report would know that the soil did not meet MOE Table 2 requirements.

[95] Mr. Smyth noted that the Terraprobe reports assessed the fill that was at a depth of 1.5 meters below ground surface (“m bgs”). He was of the view that Terraprobe did not test the native soil sufficiently to reach any conclusions about the quality of the native soil beneath the fill.

[96] Mr. Smyth concluded that a reader of the report could not conclude that the native soil was clean and qualified for disposal at an MOE Table 2 disposal site. He reached this conclusion because (i) adequate sampling was not undertaken, and (ii) the standards relied on predated the July 1, 2011 standards imposed when the current MOE Table 2 requirements became the standard for disposal at a “clean” site.

[97] Mr. Smythe agreed with Terraprobe’s report that further testing was required to ascertain the quality of the native soil. He opined at page 4 of his report that Terraprobe’s Phase Two report did not include any analytical evidence to support that metals and inorganics parameters and PAHs were not present in the native soil. He notes that in the Geotechnical report (August 2, 2011) Terraprobe refers to one sample of native soil (being the soil beneath the fill) as meeting Table 3 standards for metals. Mr. Smythe drew the inference that this single result formed the basis upon which Terraprobe asserted that the native soil was clean. Plus did not call a witness from Terraprobe to explain and interpret the Terraprobe reports. Mr. Smythe noted that there was no analytical data to confirm that concentrations of PAHs met Table 3 standards throughout the depth of native soil excavated.

[98] In cross-examination Mr. Smythe referred to a September 24, 29013 email from Terraprobe’s Matt Bielaski to Plus principal Mr. Mohtashami wherein Terraprobe advised Plus that the regulation (O. Reg. 153/04) requires 13 samples to be collected from the native soil and tested for metals, inorganics and PAH parameters to prove that the remaining native soil was clean. Mr. Bielaski wrote I his email to Mr. Mohtashami that he had stated in the earlier reports that he would not certify the site was clean based upon a single confirmatory sample of native soil from the site.

[99] Mr. Smyth agreed at trial that 13 clean samples are required before the native soil could be confirmed as clean. Prior to awarding the excavation contract Plus did not instruct Terraprobe or anyone else to perform the 13 sample test to determine whether the native soil was clean for purposes of disposal. Instead, Plus took it upon itself to rely on the single sample of the native soil to treat the soil as clean and represented to Roni, through its agent TMG, that the soil to be excavated and disposed of was clean, despite the Terraprobe report and recommendation that further testing was required. Mr. Aronovitch testified in cross-examination that he did not appreciate at the time (September 2013) that Terraprobe had earlier told Plus that they needed to do more testing to determine the depth at which the soil was no longer impacted.

[100] On the issue of the excavation contractor’s obligation to test the soil, the experts agree. Mr. Helik testified that testing is the owner’s responsibility. Mr. Smyth agreed. He opined that “the determination of the extent of contamination is not typically a requirement of the excavation contractor, unless contractually arranged to do so.” The rationale, he explains, is that a contractor may be considered to be in a conflict position because disposing of soil as contaminated materials would attract a higher price. The contract between Roni and Plus does not require Roni to test the soil for contamination.

[101] Mr. Smyth testified that faced with a report that shows contamination, as was shown in the Terraprobe report regarding the fill materials, it is reasonable to treat all of the excavated materials as contaminated until a qualified expert classifies the materials as clean, after testing as required by the regulations. This is exactly how Roni treated the excavated materials once the contamination was discovered.

[102] From Mr. Smyth’s testimony it is clear that the Terraprobe reports are confusing. If an expert is confused by the reports then even if the report had been provided to Roni as part of the tender package, it is not reasonable to expect that Roni could have deciphered its meaning.

[103] I conclude from the evidence of the experts that someone reading the Terraprobe reports could not have concluded that the materials to be excavated qualified as clean fill. I further conclude that Plus failed to have its experts perform the testing necessary to confirm that the native soil could be disposed of as clean. It was not Roni’s responsibility to test the soil. Such a requirement would have been contrary to industry practice. Had the parties agreed to transfer responsibility for environmental testing from the owner to the excavation contractor it would have been a term of the contract. It was not.

[104] Mr. Mohtashami admits in his affidavit that Roni is entitled to $47.00 per metric tonne for material removed from the Project site that exceeds MOE Table 2 requirements. Plus disputes the volume of material that Roni claims qualifies for the extra, asserting that Roni should have tested each truckload to determine whether it met or exceeded Table 2 levels before disposing of it. Plus takes the position that the onus is on Roni as excavator to arrange for and pay for testing. Plus led no expert evidence to support that proposition and the evidence of Plus’ expert is to the contrary. Roni takes the position that it is the owner’s responsibility to test for MOE compliance, a position corroborated by soils expert and engineer Robert Heller of EXP Services Inc.

[105] Mr. Aronovitch denies agreeing to pay for Roni to dispose of all excavated materials down to 73 masl as impacted materials. For reasons explained earlier I prefer and accept the evidence of Mr. Niro, as corroborated by emails from TMG, that the parties agreed that Roni would treat as impacted all materials excavated to a depth of 73 masl and that Plus would pay the agreed upon extra. Plus made a business decision to resolve the issue in this manner to avoid delays and the risk of financial disaster about which Mr. Aronovitch deposed in chief.

[106] It follows, then, that all of the fill and the soil to a depth of 73 masl removed from the site required disposal as non-Table 2 compliant materials. The contract is clear: the price agreed upon was for MOE Table 2 compliant disposal. Non-compliant disposal was payable at an additional $47.00 per metric tonne. Had Roni known about the contaminated materials before disposing of it at the RCG site, the price would have been the same. Roni was entitled to charge extra for disposal of contaminated materials to a depth of 73 masl. Roni does not claim payment for the double handling of materials that were disposed of at the MOE Table 2 compliant RCG site and then removed from that site and delivered for disposal at Laspace.

(b) Quantifying the extra for contaminated disposal

[107] Plus and Roni disagree over the volume of soil that qualifies as an extra for which Roni was entitled to charge $47.00 per metric tonne for disposal as contaminated materials.

[108] Roni's position is that the contract price was based on a quote for the removal and disposal of clean waste, based on Mr. Niro’s evidence that Vijay Chansingh of TMG represented to him that the material to be excavated was clean fill and qualified for disposal as MOE Table 2 materials. Roni relied on that representation in pricing the job. Roni also relied on Mr. Chansingh’s representation that Roni would be entitled to charge extra to dispose of excavated materials that did not qualify for MOE Table 2 disposal. The contract prepared by Plus and presented to Roni in November 2013 reflects that Roni was entitled to charge extra for materials that do not meet MOE Table 2 requirements at the rate of $47.00 per metric tonne. Roni's quote, Plus' acceptance, the contract drafted by Plus and the email dated September 25, 2013 from Mr. Rak to Mr. Niro all confirm this rate for non-MOE Table 2 materials.

[109] Plus did not call Mr. Chansingh as a witness at trial to rebut Roni's evidence. Mr. Mohtashami, who was not present at the time of the discussions, denies that the representation was made. I prefer and accept the evidence of Mr. Niro, as corroborated by the documents, as more reliable on this issue and find that Mr. Chansingh, as agent of Plus, represented to Roni that the materials to be excavated were MOE Table 2 compliant materials. The fixed price contract is for excavating and disposing of MOE Table 2 compliant materials.

[110] I also accept that the parties agreed that to the extent that the materials to be excavated did not qualify as MOE Table 2 materials, Plus would pay an additional fee of $47.00 per metric tonne.

[111] The issue is whether the contract requires Plus to pay extra only for the specific truckloads that contain contaminated soil, or whether Plus is required to pay extra for all truckloads of excavated soil down to 73 masl. In September 2013 Plus represented to Roni that Plus would conduct further testing to determine whether and when the excavation reached a “clean” level.

[112] Testing by truckload: The only way to determine whether a truckload contains contaminated soil is to test each truckload. No one suggested in September 2013 that Roni must test each truckload to determine compliance with disposal at an MOE Table 2 disposal facility, or whether the truckload would qualify for the $47.00 per metric tonne extra to dispose of it as contaminated materials. There is no contractual addendum, email or other evidence to that effect.

[113] According to soil engineer Robert Helik of EXP Services Inc., such testing would have delayed each truckload by one or more days awaiting test results. Such a process would have been impractical and is contrary to Mr. Aronovich’s evidence that avoiding delay on the Project was a priority.

[114] Requiring Roni to test soil on a truckload by truckload basis was not contemplated in the contract nor would it have been practical, given the delay that it would have caused. Plus was very concerned about delay on the Project. I find that neither party contemplated that each truckload must be tested as a precondition for Roni to charge the $47.00 per metric tonne extra to excavate and dispose of the contaminated waste. The contract did not contemplate that the extra would be quantified in that manner.

[115] Testing by cut: Another way to determine the point at which the excavation was below the level of contaminated soil would be to test each “cut”. A cut, as described by Mr. Niro, is the horizontal plane of the excavation: Roni would perform a cut at 2 to 3 meters, excavating all materials to that depth. Then it would cut to the next level of depth and so on.

[116] In an email dated September 25, 2013 from Mr. Rak to Mr. Mohtashami Mr. Rak proposed that the contaminated soil be removed and tested. Mr. Mohtashami then emailed his partner Mr. Aronovitch that removal of the contaminated soil would likely cost an additional $120,000.00 to $150,000.00 per parking level (the Project had four underground parking levels) if the contamination went down through all such levels. The testing undertaken after this issue arose ultimately showed that the excavated materials at 73 masl met MOE Table 2 requirements.

[117] Testing by multiple samples: An email chain dated September 25 and 26, 2013 from Mr. Aronovitch to Terraprobe and TMG, but not copied to Roni, produced to Roni for the first time in August 2017, shortly before trial, describes a meeting convened to discuss the contamination discovered on site. The chain begins with Mr. Rak asking Terraprobe’s Mr. Bielaski to visit the site to determine the extent of the problem. Plus did not call Mr. Bielaski as a witness at trial. Mr. Bielaski replied by email that a simple site visit will not determine the extent of contamination and that multiple samples from different areas of the site are required. He advised in his email that in the absence of testing all materials would have to be removed as “non-hazardous waste”, and could not be treated as MOE Table 2 materials. In the absence of the author of the email testifying at trial the truth of the contents of the email cannot be relied upon. However, the existence of the email explains Plus' subsequent conduct and corroborates that the parties had agreed to treat the excavated materials as contaminated materials, disqualified for disposal at an approved MOE Table 2 site.

[118] Mr. Mohtashami’s responding email sets out his decision that it makes sense to excavate to 73 masl on the north side, dumping the soil as contaminated and sending samples for testing; then excavate the south side to 73 masl, dump as contaminated soil and send more samples for testing, and then “Depending on the results select the dump site for excavation below 73m…” and “if necessary continue testing the soil as we go to the next level…”

[119] Plus’ decision to treat materials as contaminated to 73 masl: Mr. Rak, by email dated September 25, 2013 to Mr. Mohtashami proposed that Roni excavate down to 73 masl and treat the soil as contaminated. Later the same day Mr. Mohtashami replied by email to Mr. Rak to proceed in that manner. I accept these emails as evidence that Plus had decided to pay Roni extra to treat all of the excavated soil to a depth of 73 masl as impacted soil payable at the rate of $47.00 per metric tonne (erroneously reflected as $47/m³ but clearly meaning “metric tonne” as provided for in Roni’s quote and the written but not fully executed contract).

[120] At trial Mr. Mohtashami refused to acknowledge that the email reflects his proposed course of action. The email corroborates Roni’s position and evidence that it is the responsibility of the owner to test for contaminated soil. Had it been Roni’s responsibility Plus would have included Roni in the email chain setting up the meeting to discuss the course of action proposed by Mr. Mohtashami.

[121] I find that by late September 2013 when Plus had to decide what to do about the contamination issue the principals of Plus weighed the competing factors of cost and delay and made the business decision to treat all of the materials excavated down to 73 masl as impacted, rather than to incur the delay of further testing. In doing so they knew that their cost to dispose of the contaminated soil as an extra would be $47.00 per metric tonne.

[122] The email recited above corroborates Roni’s position that Plus, either directly or through TMG, instructed Roni to continue excavating and disposing of all excavated materials as non-MOE Table 2 materials. It is inconsistent with Mr. Mohtashami’s position at trial that Plus expected Roni to conduct the testing on a load by load basis and dispose of each load at an appropriate facility.

[123] I find that it is reasonable for Roni to have disposed of all excavated materials above 73 masl as contaminated waste. Roni was contractually entitled to charge $47.00 per metric tonne to dispose of such waste.

(c) Volume and weight of excavated materials

[124] Once the contamination was discovered Roni (i) took the excavated materials that had been disposed of at the RCG site and moved the materials to the Lascape disposal site where contaminated materials can be safely dumped and (ii) disposed of the balance of the excavated materials from the Project site (to a depth of 73 masl) at the Lascape disposal site.

[125] The Lascape disposal tickets record the weight of the materials disposed of in this manner. As to the first category of disposal, RCG confirmed by letter dated December 13, 2013[^14] that Roni removed 161 loads of materials from the RCG site on September 26, 27 and 30, 2013. Roni did not “double charge” for materials initially taken to the RCG site and then relocated to Lascape. That is, Roni credits Plus with the original disposal cost and instead charges for it as an extra.

[126] The Terraprobe reports refer to the volume of materials to be excavated. The contract and Roni’s invoices, including invoices for disposing of contaminated waste as an extra, deal with the weight of the materials disposed of. A conversion factor is required to calculate weight from volume.

[127] Mr. Mohtashami, based on his review of the Lascape tickets, testified in chief that Roni continued to dispose of excavated materials at Lascape after September 27, 2013 when Terraprobe tested the soil at 73 masl as clean. Plus disputes that Roni was entitled to dispose of materials after that date at Lascape and charge the $47.00 per metric tonne as an extra. The invoices in question that post-date September 27, 2013 are invoices dated October 25, 2013 and identified by number as 26291, 26292, 26293 and 26294.

[128] I find that Roni’s October 25, 2013 invoices are for contaminated waste taken from the Project site and from the RCG site to the Lascape site for materials excavated to a depth of 73 masl depth. The Lascape tickets, which are business records maintained in the ordinary course of business, reflect the number of metric tonnes deposited at Lascape (prices include HST):

a) Invoice 26291 $149,570.51 2,816.24 metric tonnes

b) Invoice 26292 $96,454.13 1,816.12 metric tonnes

c) Invoice 26293 $34,598.51 651.45 metric tonnes

d) Invoice 26294 $70,705.87 1,331.31 metric tonnes

[129] I accept that the invoices accurately reflect the volume of materials deposited at Lascape as contaminated waste, removed from (i) the Project site directly, or else (ii) moved from the Project site initially to the RCG’s site and then relocated to the Lascape site.

[130] Roni’s invoices, as mentioned, are expressed by weight, consistent with the agreement regarding extras. The measurement used to describe the threshold for disposing of excavated materials as contaminated is expressed as a depth in relation to sea level: 73 masl. A conversion factor is required to compare and assess whether Roni charged Plus for more than the materials excavated to a depth of 73 masl, as alleged by Mr. Mohtashami.

[131] Roni’s expert witness Mr. Helik of EXP provided a conversion factor to convert volume (i.e. the volume of the hole that was excavated) to weight (i.e. the weight of the excavated materials). I accept his conversion factor as reasonable for the purpose of performing the calculations necessary to determine whether, in charging extra for removing contaminated waste, Roni charged for less than or more than the amount of materials excavated to a depth of 73 masl, expressed in weight.

[132] Mr. Helik performed his calculations based on the site specifications reflected in the Terraprobe reports and surveys. He calculated the volume of the excavation area as approximately 6,960 m³. He opined that an appropriate conversion rate is between 1.8 and 2.1 tonnes per cubic meter to convert volume to weight. Mr. Helik attended at trial to be cross-examined. His conversion factor was not challenged. Applying this conversion factor the contaminated materials that Roni excavated and removed from the site would have weighed between 12,528.00 tonnes and 14,616.00 tonnes. The weight of the contaminated materials for which Roni actually charged extra at the rate of $47.00 per metric tonne was less: 9,570 tonnes.[^15]

[133] The calculations, after conversion, illustrate that Roni did not charge extra to dispose of materials below 73 masl as contaminated and in fact did not even charge extra for all of the materials excavated from ground level down to 73 masl.

(3) Was Roni entitled to charge extra for other items?

[134] After having his discovery transcript put to him several times Mr. Mohtashami finally admitted on cross-examination that Mr. Rak had the authority to approve extras, including price. He admitted that when Mr. Rak was away Mr. Chansingh was senior on site, and could authorize extras, but did not agree that Mr. Chansingh could approve the price of an extra. In other words, Plus asks the court to accept that Mr. Chansingh could authorize an extra but that he could not price it. I do not accept that position as credible. Mr. Mohtashami testified that if Mr. Chansingh authorized and priced an extra and Roni, acting upon the authorization, performed the extra, then Roni would have to absorb the cost of the extra. Mr. Mohtashami admitted that there is no written communication wherein Plus put Roni on notice that only Plus or Mr. Rak could authorize the price of an extra.

[135] Roni followed TMG’s directions regarding the order of excavation and timing of inspections, beginning with removing the garbage and debris left on site from the shoring caissons, followed by general excavation. The excavated materials included bricks and mixed debris, which could not be disposed of as MOE Table 2 materials. Roni's Mr. Niro relied on TMG’s instructions and directions that removing bricks and mixed debris would be dealt with as an extra. Mr. Rak confirmed these instructions in writing by way of his July 18, 2013 email in which he wrote:

“Further to our conversation, the owner has approved the additional cost of $150 per load for the removal soil (sic) with mixed waste.”[^16]

[136] Mr. Mohtashami acknowledged that the July 18, 2013 email from Mr. Rak approves the additional cost of $150.00 per load for mixed waste as an extra to the contract. Plus paid the extra of $150.00 per load without requiring a written authorization for the extra. I find that Plus, through its agent TMG, approved the extra. Subsequently, Roni (through Mr. Niro) agreed to credit back the $150 charged per load for mixed waste and instead charge the reduced rate of $47.00 per metric tonne for non-MOE Table 2 materials. The credit is calculated as $57,000.00[^17].

[137] TMG’s Mr. Chansingh recorded the loads attributable to extras by signing Roni’s work sheets. Also, TMG’s logs, filed as an exhibit to Mr. Niro’s affidavit, include TMG’s record of Roni’s work for which these extras are claimed. Roni issued invoices for the extras as follows (prices include HST):

a) Invoice 25690 $12,782.56 June 17, 2013

b) Invoice 25957 $42,375.00 August 23, 2013

c) Invoice 26061 $39,425.72 September 23, 2013

[138] Additional extras: In October 2013 TMG, as agent for Plus required and authorized Roni to perform extras for the following items:

a) Build a ramp out of shale for the tieback machine to exit the excavation,

b) Chip concrete from caisson to allow beam installation,

c) Chip caisson hole deeper to allow beam installation,

d) Assist welder in placing steel beam,

e) Pull back ramp for welder, and

f) “Float” equipment in and out of the excavated hole, with a police escort.

[139] Roni invoiced for these extras as follows (prices include HST):

a) Invoice 26322 $10,617.48 (items a – d) October 31, 2013

b) Invoice 26422 $1,627.20 (item e) November 11, 2013

c) Invoice 26554 $3,288.30 (item f) November 29, 2013

[140] Plus disputes invoices 23622, 26422 and 26554 on the basis that the work was included in the contractual scope of work despite TMG having authorized the extras. The evidence does not support his bald assertion.

[141] I find that the work was authorized as extra and Roni is entitled to be paid for it.

(4) Calculation

[142] Roni issued invoices (i) for progress draws against the contract price and (ii) for extras. The invoices are summarized in Roni’s April 1, 2014 statement of account, filed as exhibit 1, tab K, at trial.

Payment on the contract

[143] Roni issued invoices for contract work on October 21, 2013 for $40,680.00 and on November 5, 2013 for $138,820.50 for a total of $179,500.50. The parties agree that prior to this litigation Plus had paid Roni $179,500.50 for contract work.

[144] Roni issued the following further invoices for contract work[^18] (prices include HST), none of which Plus paid prior to this litigation, relying on its counterclaim for backcharges for deficiencies and delay, a claim that Plus abandoned prior to trial in response to Roni’s motion for summary judgment:

a) November 13, 2013 $133,227.00

b) November 25, 2013 55,426.50

c) December 20, 2013 83,394.00

d) February 24, 2014 5,085.00

e) March 31, 2014 $ 50,737.00

Total: $327,869.50

[145] Plus paid this contract amount prior to trial, plus an additional $4,262.30 for interest on this amount, in response to Roni's motion for summary judgment. As a result the parties agree that Plus has paid the full contract price as invoiced by Roni, leaving in issue for trial solely the amount payable for extras. The parties agree that Plus has paid $38,137.50 towards extras.

[146] Plus argues that Roni failed to follow the contractual procedure for having extras approved. I reject that assertion. Firstly, Plus never executed the written contract. Therefore it cannot hold Roni to the technicalities of the formal written approval process for extras. Secondly, the extras were, in fact, approved by Plus through its authorized agent TMG. While formal “extras” forms were not used as contemplated in the contract that was drafted but not signed by Plus, I consider emails approving extras to constitute written authorization. Plus cannot rely on its own delinquency in failing to sign the written contract to relieve it of its obligation to pay Roni for approved extras. In any event, contra preferentem applies. If the issue is ambiguous, which it is not, it would be decided in favour of Roni and against the party who drafted the contract.

Payment for extras

[147] The amount in dispute at the opening of trial was $525,242.69, reflecting the amount claimed by Roni as extra for disposing of the impacted soil. The balance remaining in court as security to vacate the lien is that amount plus $50,000.00 for costs.

[148] Roni claims payment for extras reflected in its invoices #25690, 25957 (paid in part) and 26061. TMG’s Mr. Rak approved the extra for removing mixed debris and bricks at the rate of $150.00 per load. The evidence supports the quantification of the claim as to the number of loads removed. The invoices also include Roni building a platform out of shale for the drilling rig and removing garbage that did not qualify for MOE Table 2 disposal. All three invoices pertain to work that was outside the scope of the contract work and approved by TMG as authorized extras. TMG monitored the work and signed off on Roni’s work sheets.

[149] The parties agree that Plus paid $38,137.50 on account of the $57,000.00 charged for the extra to remove and dispose of 380 loads of mixed fill at $150.00 per load. In calculating the amounts owing, Plus is credited back the payment made for this charge, and the $57,000.00 is reversed based on Roni’s agreement not to charge Plus for double handling. Instead, Roni claims payment as mixed debris at $47.00 per metric tonne to remove and dispose of it as non-MOE Table 2 materials. Calculating payment for Plus on this basis is more favourable to Plus.

[150] The resulting calculation is as follows:

a) invoice 25690 $ 12,782.56

b) invoice 25957 42,375.00

c) invoice 26061 39,425.72

d) credit payment (38,137.50)

e) credit to re-classify mixed debris (57,000.00)

Total $ (544.22)

[151] Roni also claims payment for the extras reflected in its invoices #26322, 26422 and 26554. These invoices pertain to authorized extras discussed earlier in these reasons. The evidence supports the quantification of the claim as to the number of loads removed. Plus provided no evidence of probative value to the contrary. The three invoices pertain to work that was outside the scope of the contract work.

[152] I find and calculated Roni’s entitlement to payment for these extras as $15,532.98, calculated as follows:

a) invoice 26322 $ 10,617.48

b) invoice 26422 1,627.20

c) invoice 26554 3,288.30

Total $15,532.98

[153] Plus has not paid any amount towards these invoices for extras.

[154] The balance of Roni’s claim for extras is based on its calculation of the extra for disposing of impacted soil at $47.00 per metric tonne, for which Roni issued invoices reflected in its April 1, 2014 statement of account. Roni is not claiming extra for the double handling of materials disposed of at the RCG site and subsequently relocated to the Lascape site and the $57,000.00 credit is reflected in the earlier calculations.

[155] Plus does not acknowledge any obligation to pay Roni extra for disposing of contaminated soil. For the reasons given I find that Roni is entitled to be paid as an extra to the contract price for disposing of impacted excavated soil to a depth of 73 masl at the agreed upon rate of $47.00 per metric tonne.

[156] In quantifying the weight of excavated materials down to 73 masl qualifying as an extra, including the materials excavated and initially disposed of at the RCG site and then relocated to the Lascape site, I rely on the evidence of weight as reflected in the Lascape business records. Roni filed backup documentation to prove its claim[^19]. Roni issued the following invoices for this extra:

a) invoice 26290 October 25, 2013 $ 156,934.21

b) invoice 26291 October 25, 2013 149,570.51

c) invoice 26292 October 25, 2013 96,454.13

d) invoice 26293, October 25, 2013 34,598.51

e) invoice 26294, October 25, 2013 70,705.87

Total $ 508,263.23

[157] Plus relies on its expert Golder to quantify the extra based on volume of the excavated hole rather than on weight. I find that the agreement was to calculate the extra based on weight rather than volume and accept as appropriate Mr. Helik’s conversion factor to convert cubic meters to metric tonnes. In any event, had the court relied on the Golder approach to calculating volume, the amount owing to Roni for this extra would have been more.

[158] In summary, adding together the amounts owing and deducting the credit Roni is entitled to be paid $15,532.98 + $508,263.23 less $544.22 for a total amount payable by Plus to Roni of $523,241.99. It is not coincidental that the amount that I have found owing is the same amount that Roni claimed at trial. Roni has acted reasonably throughout, without overreaching or exaggerating its claim.

III. Conclusion

[159] I find and this Court directs Plus to pay to Roni the sum of $523,241.99 plus prejudgment interest at the Courts of Justice Act rate of interest of one and three-tenths percent (1.3%) from April 9, 2014, being the date the action was issued, to April 5, 2018, being the date of release of these reasons, plus post-judgment interest at the Courts of Justice Act rate[^20] thereafter until paid.

[160] In the event that the total of the amounts required to be paid is not paid after confirmation of this report then Roni is entitled to realize its judgment out of the security posted to vacate the lien claim from title, and Roni is further entitled to such other collection remedies as may be appropriate.

IV. Costs

[161] The parties should attempt to resolve the issue of costs themselves. If the parties cannot resolve the issue of costs, then the parties shall schedule an appointment through the construction lien assistant trial coordinator to appear and make submissions on costs and to settle the final reference report.

Master C. Albert .

Released: April 5, 2018

[^1]: The sum of $322,131,80 was paid out of court from the funds posted to vacate the lien claim, leaving the balance of the funds ($575,242.69) in court as security for the remaining portion of Roni's lien claim, plus $50,000.00 for costs.

[^2]: Judgment of reference was issued in Action CV-15-529442 (Delgant (Civil) Ltd. v. Plus Development Group Corp.). By reason of section 60 of the Construction Lien Act, R.S.O. 1990, c.C.30 all lien claims on title are referred under the judgment of reference and subject to the order for trial of Master Wiebe dated November 6, 2015. The Roni lien claim proceeded to trial as a separate stream called “stream 2”.

[^3]: Meters above sea level

[^4]: around 68 masl

[^5]: P4 refers to Parking Level 4

[^6]: Mr. Niro’s affidavit evidence in chief, paragraph 6, exhibit 1, volume 1

[^7]: Meters above sea level

[^8]: Exhibit 1, volume 1, Niro affidavit, paragraph 39 and exhibit G to the affidavit.

[^9]: The Terraprobe Phase Two report is dated May 12, 2012. The litigation began in 2014.

[^10]: filed in evidence as exhibit 5, tabs 5, 6, 7 and 8

[^11]: Plus’ expert Mr. Smyth defined delineation as meaning “testing”

[^12]: Helik affidavit and report, exhibit 1, volume 1, tab 4 part 5

[^13]: Quoted from the Golder report, trial exhibit 2 volume 2, page 720

[^14]: Exhibit I to Mr. Niro’s affidavit, trial exhibit 1, volume 1. See also paragraphs 56 to 59 of his affidavit.

[^15]: Mr. Niro included the conversion calculation, together with a diagram, at exhibit J of his affidavit.

[^16]: Exhibit 2, volume 2, tab F

[^17]: 380 loads @ $150 per load

[^18]: Exhibit 1, tab K: Statement of Account

[^19]: Exhibit 1, volume 2, tabs 4, 5, 6, 7 and 8

[^20]: 3% as of the date of release of these reasons