v. TOWN OF OAKVILLE, 2018 ONSC 2599
COURT FILE NO.: C-321-12
DATE: 2018/05/08
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
NETWORK SITE SERVICES LTD.
Plaintiff
– and –
THE CORPORATION OF THE TOWN OF OAKVILLE
Defendant
Michael A. van Bodegom and Thomas E. Sanderson, Counsel for the Plaintiff
Kenneth W. Movat, Counsel for the Defendant
HEARD: September 11, 12, 13, 14, 15, 18, 19, 21, 22, 25, and November 17, 2017
D.A. BROAD
REASONS FOR JUDGMENT
Background
[1] This action arises out of a contract between the plaintiff Network Site Services Ltd. (“Network”) and the defendant the Corporation of the Town of Oakville (“the “Town”) for reconstruction of a 1.2 km portion of Speers Road in the Town of Oakville (the “Project”). Network and the Town entered into the contract on October 18, 2010 (the “Contract”) following a public tender process. The scope of the work comprised generally water main installation and road reconstruction, including the installation of a granular road base, base and top lift asphalt, curbs and gutters, storm sewer catch basins and leads, sidewalks and street lighting. The Regional Municipality of Halton (the “Region”) was responsible for the specifications and inspection of the water main work within the scope of the Contract. Although it ultimately paid for the cost of the water main work, the Region was not a party to the Contract nor was it a party to the action.
[2] Network commenced its work under the Contract shortly after its execution on October 18, 2010 and the Contract was certified to have been substantially performed on September 30, 2011.
[3] The Contract was a “unit-price” contract as distinguished from a “stipulated-price” contract. Network provided unit pricing for various items to be performed within the scope of the work through the tendering process. The quantities of the items for which pricing was provided were to be measured in volume in cubic metres, in area by square metres or in length by meters. In addition, there were certain specific items which required a lump sum price to be provided for their entire scope. Only one item, related to street cleaning, was measured in hours of work performed.
[4] The total cost tendered by Network, on the unit-price basis specified by the Form of Tender, was the sum of $3,782,271.01 plus HST. The parties did resolve, during the course of the project, various claims by Network for additional payments arising out of changes or errors in the plans or specifications. These changes resulted in a total payment to date by the Town to Network in excess of $4 million, exclusive of HST. However, the parties were unable to resolve all of Network’s claims for payment.
[5] Network seeks in this action payment for three categories of items, as follows (all exclusive of HST):
(a) unpaid quantities of unit-price line items specified in the Contract, in the amount of $333,847.15;
(b) unpaid claims asserted during the Project for the cost of changes or extra work in the amount of $196,785.63; and
(c) unpaid claims for changes and extras discovered after the action was commenced in the amount of $320,304.11.
[6] The parties filed a jointly-prepared “Scott Schedule,” particularizing the various claims advanced by Network, which was marked as Exhibit B in the proceeding. During the trial the parties agreed on certain corrections to the Scott Schedule arising from typographical or calculation errors. The corrections were made on the face of Exhibit B.
[7] The Scott Schedule discloses 36 individual claims for payment being advanced by Network. During the course of the trial the Town acknowledged an obligation to pay three specific claims namely F-2b) in the sum of $96.40, F-2c) in the sum of $2,496 and invoice 109715 in the sum of $1,125. These admissions were noted on the face of Exhibit B.
Witnesses
[8] The court heard testimony from four witnesses for each party.
(a) Network’s witnesses:
Don Medeiros – President of Network;
Corey McPherson – No longer associated or employed by Network. Acted as Network’s Project Manager on the Project commencing in the Spring of 2012, following completion of the Region of Halton’s phase of the Project, until completion of the Project;
Enrique Huerta – Network on-site Foreman;
Joe Medeiros (no relation to Don Medeiros) – Network on-site foreman in relation to the water main and storm sewer aspects of the Project.
(b) Town’s witnesses:
Anthony Lazzara - Construction Coordinator for the Town of Oakville. Oversaw the Project and the Town’s Inspectors in relation to the Town’s aspects of the Project (everything other than installation of the water main). Reported to Paul Allen, Manager of Design and Construction;
Les Dziadula - Region’s construction inspector in relation to the water main installation phase of the project;
Kelly Stephens - Town’s full-time on-site construction inspector. Joined the project in April 2011;
Paul Allen – Town’s Manager of Design and Construction with primary responsibility for oversight of the Project on behalf of the Town. Was not on-site throughout the performance of the Project, but attended on a number of occasions including the sole pre-construction meeting and one site meeting.
The Contract
[9] The Contract was comprised of a number of distinct documents. The Instructions to Bidders in the tendering process set forth the order of precedence of the various contractual documents in the event of any conflicts or inconsistencies in the provisions of the plans and specifications. The contractual documents, in the specified order of precedence, are as follows:
Form of Agreement (the two page document executed by the parties whereby Network agreed to do all the work, furnish all the materials complete the works in accordance with the plans, specifications and tender, and the Town agreed to pay Network for all work done at the unit prices on the tender);
Addenda issued by the Town during the tender period;
Special Provisions (“SPG”) comprising provisions complementing or replacing certain General Conditions (GC) or Ontario Provincial Standard Specifications (OPSS) and drafted specifically for the project;
Instruction to Bidders;
Tender Specifications, Plans and Town of Oakville Standard Drawings;
Form of Tender and Supplementary Tender Form;
General Conditions (GC); and
Ontario Provincial Standard Specifications (OPSS).
[10] Under GC 1.04 “Contract Administrator” was defined to mean the person designated by the Owner (the Town) to be its representative for the purposes of the Contract.
[11] The Town did not retain an outside entity or person to act as the Project Engineer/Coordinator for the Contract. The Instruction to Bidders specified that the Project Engineer/Coordinator shall be Irfan Arab, Senior Project Leader for the Town. Mr. Arab died before trial and was therefore unavailable to testify. The evidence of Paul Allen, the Town’s Manager of Design Construction, was that it was not unusual for the Town to administer road reconstruction projects, such as the Speers’ Road Project, without retaining outside consultants.
[12] Pursuant to para. 4.00(b) of the Instruction to Bidders the Project Engineer/Coordinator had the duty to inspect and oversee all work to the extent of ensuring that specifications were followed and that the quality of work met the expectations of the Town and had the authority to stop the work if necessary to ensure the proper execution of the Contract. The Project Engineer/Coordinator also had the authority to reject all work and materials which did not conform to the contract specifications or which were substandard, flawed or in any other way not suitable for the Town’s purposes, and to decide all questions which arise in the execution of the work.
[13] The Project Engineer/Coordinator had various other duties and responsibilities specified in the General Conditions and the Special Provisions. In the result the Contract was structured in such a way that the Town, through the Project Engineer/Coordinator and his delegates, had hands-on involvement in the administration of the Contract and the execution of the project. The Contract was not structured on a “turn-key” basis whereby Network, as Contractor, would be fully responsible to complete the Project according to the specifications and hand it over to the Town as a finished product.
[14] GC 3.01.04 of the General Conditions to the Contract provided that:
“The Contract Administrator shall determine the amounts owing to the Contractor under the Contract and shall issue certificates for payment in such amounts as provided for in Section GC 8.0 Measurement and Payment.”
[15] GC 8.01.01 provides, in summary, that:
(a) the Contract Administrator shall make an Estimate (defined in GC 1.04 as a calculation of the quantity or cost of the Work or part of it depending on the context) once a month of the quantity of Work performed;
(b) every Estimate, except the final one, shall be of the quantity of Work performed since the proceeding Estimate was made;
(c) the Contract Administrator shall provide each Estimate to the Contractor within 10 days of the Cut-Off Date (defined in GC 1.04 as the date up to which payment shall be made for Work performed);
(d) the quantities for progress payments shall be construed and held to be approximate;
(e) the final quantities for the issuance of the Completion Payment Certificate shall be based on the measurement of Work completed;
(f) measurement of the quantities of the Work performed may be either by Actual Measurement (defined in GC 1.04 as the field measurement of that quantity within the approved limits of the Work) or by Plan Quantity principles as indicated in the Contract (defined in GC 1.04 as that quantity computed from within the boundary lines of the Work as shown in the Contract Documents);
(g) those items identified on the tender by the notation (P) in the unit column shall be paid according to the Plan Quantity, whereas the items where that notation does not occur shall be paid according to the Actual Measurement or lump sum. [note: the parties are agreed that there is only one item in dispute namely item E-8 on the Scott Schedule (relating to excavation of material) which was potentially a “Plan Quantity” item].
[16] GC 8.02.03.01 provides, in summary, that the value of the Work performed and materials supplied, shall be calculated once a month by the Contract Administrator by issuance of a Progress Payment Certificate.
[17] GC 8.02.03.04 provides that when the Contract Administrator has verified that the contract has been substantially performed, he/she shall issue a Certificate of Substantial Performance which shall be published in accordance with the provisions of the Construction Lien Act. GC 8.02.03.05 provides that when the Contract Administrator issues the Certificate of Substantial Performance, he/she shall also issue the Substantial Performance Payment Certificate and the Substantial Performance Statutory Holdback Release Payment Certificate, or where appropriate, a combined payment certificate.
[18] GC 8.02.03.06 and .07 provide that, upon application by the Contractor and when the Contract Administrator has verified that the Contract has reached Completion, he/she shall issue a Completion Certificate and shall also issue the Completion Payment Certificate and the Completion Statutory Holdback Release Payment Certificate, or where appropriate, a combined payment certificate.
Progress Payment Certificates
[19] The evidence indicated that the monthly Progress Payment Certificates were prepared by Anthony Lazarra, the Town’s Construction Coordinator for the Project, based upon Monthly Summaries prepared by the inspectors for the Town or the Region, as the case may be. The monthly summaries were, in turn, prepared by Mr. Lazarra on the basis of field notes (entitled Daily Work Records) prepared by either the Town’s inspectors or the Region’s inspectors and in consultation with them, if necessary. Not all of the Progress Payment Certificates included in the Joint Trial Brief were accompanied by Monthly Summaries.
[20] It is also noted that there were no field notes produced by the Town for the periods December 15, 2010 to February 17, 2011 and August 20 to 28, 2011. Mr. Lazarra was unable to explain the absence of field notes for these periods, except to suggest that there may not have been much if any work done during the December 15, 2010 to February 17, 2011 period due to winter conditions, or if there was, the Town may not have been made aware of it.
[21] The Monthly Summaries were reviewed with a representative of Network and some, but not all, of the Monthly Summaries were signed on behalf of Network. Initially Network’s representative was its President Don Medeiros, and commencing in the spring of 2011 it became Corey MacPherson, who became involved in the Project as Network’s Project Manager at that time.
[22] The following Progress Payment Certificates were issued by the Town through the course of the project:
Number
Date
Amount of Approved Payment Including HST
P01
December 6, 2010
$449,560.79
P02
January 13, 2011
$305,161.88
P03
February 8, 2011
$180,208.61
P04
March 3, 2011
$ 93,207.80
P05
April 7, 2011
$178,540.86
P06
May 17, 2011
$112,773.78
P07
June 10, 2011
$434,837.84
P08
July 19, 2011
$483,191.66
P09
August 11, 2011
$581,451.99
P10
September 15, 2011
$630,411.50
P11
October 13, 2011
$311,530.67
P12
December 2, 2011
$427,372.43
P13
December 21, 2011
$218,179.96
P14
June 21, 2012
$ 87,176.97
P15
December 6, 2012
$ 91,706.26
[23] Appended to Progress Payment Certificate P12 was a Certificate of Publication of the Certificate of Substantial Completion of the Contract dated October 7, 2011, stating that the Contract was substantially performed on September 30, 2011. The statutory holdback under the Construction Lien Act was authorized to be released by Progress Certificate P12 dated December 2, 2011.
[24] The Progress Payment Certificate which immediately followed the date of Substantial Completion of the Contract was P11 dated October 13, 2011. P11 stated that the approved value of the Project (excluding HST) was the sum of $3,782,271.01 and that the total project expenditures to date (including that certificate) and the gross value of work performed to date were the same amount (less basic holdback and maintenance security holdback).
[25] It appears that Progress Payment Certificate P11 represented or functioned as the Substantial Performance Payment Certificate and Progress Payment Certificate P12 represented or functioned as the Substantial Performance Statutory Holdback Release Payment Certificate, although they did not expressly bear those titles.
[26] The maintenance security under the Contract was authorized by the Town to be released by Progress Payment Certificate P15 dated December 5, 2012.
[27] It was not apparent from the evidence whether a Completion Certificate was issued or whether a Completion Payment Certificate, Completion Statutory Holdback Release Payment Certificate, or a combined payment certificate was issued.
Preliminary Issue re Timeliness of Network’s Claims for Additional Payments
[28] GC 3.13.03 sets forth the claims procedure applying to situations that may lead to a claim for additional payment. The section provides, in summary, as follows:
(a) the Contractor shall give verbal notice of any situation that may lead to a claim for additional payment immediately upon becoming aware of the situation;
(b) the Contractor shall provide written notice in the standard form “Notice of Intent to Claim” within 7 days of the commencement of any part of the work that may be affected by the situation;
(c) the Contractor shall submit detailed claims as soon as reasonably possible and, in any event, no later than 30 days after completion of the work affected by the situation. The details shall include identification of the item in respect of which the claim arises, the grounds upon which the claim is made and the Records maintained by the Contractor supporting the claim;
(d) in exceptional cases, the 30 days may be increased to a maximum of 90 days with approval in writing from the Contract Administrator;
(e) within 30 days of the receipt of the Contractor’s detailed claim, the Contract Administrator may request the Contractor to submit any further and other particulars as the Contract Administrator considers necessary to assess the claim. The Contractor shall submit the requested information within 30 days of receipt of such request; and
(f) within 90 days of receipt of the detailed claim, the Contract Administrator shall advise the Contractor, in writing, of the Contract Administrator’s opinion with regard to the validity of the claim.
[29] GC 3.13.04 provides that the parties shall make all reasonable efforts to resolve their dispute by amicable negotiations and that where a negotiated settlement cannot be reached the parties shall proceed in accordance with clause GC 3.13.05, Mediation, or subsection GC 3.14, Arbitration.
[30] GC 3.13.05 provides that if the claim is not resolved satisfactorily through the negotiation stage within a period of 30 days following the opinion given in paragraph GC 3.13.03.05 and the Contractor wishes to pursue the issue further, the parties may, upon mutual agreement, utilize the services of an independent third party mediator.
[31] GC 3.14.01 provides that if a claim is not resolved satisfactorily through the negotiation stage or the mediation stage, either party may invoke the provisions of subsection GC 3.14, Arbitration, by giving notice to the other party.
[32] In his written submissions, Mr. Movat on behalf of the Town, submitted that the General Conditions required Network to provide written notice in the standard form “Notice of Intent to Claim” within 7 days of the commencement of any part of the affected work and claims would only be accepted within 30 days of completion of the accepted work. Although this submission cited GC 3.10.03, it is evident from the context that reference to GC 3.13.03 was intended.
[33] The Town’s submissions made specific reference to Network’s claim relating to the “impact and productivity costs related to the Town’s oversight and management of the contract” advanced at para. 6(ii) of Network’s Amended Statement of Claim (amendment made May 2015).
[34] I did not understand Mr. Movat’s submission in reliance on GC 3.13.03 to relate to Network’s claim for (a) unpaid quantities of unit-price line items specified in the Contract, in the amount of $333,847.15 or (b) unpaid claims asserted during the project for the cost of changes or extra work in the amount of $196,785.63.
[35] Network’s claims for unpaid quantities of unit-price line items and for claims asserted during the project for the cost of changes or extra work were delivered to the Town in September and early October 2011, in connection with the preparation of Progress Payment Certificate P11 leading to the certification of substantial completion of the Contract. The Town did not take the position at that time that these claims were out of time or barred by GC 3.13.03, but rather the parties engaged in negotiations respecting the resolution of these claims pursuant to GC 3.13.04, as exemplified, among other things, by the detailed exchange of their respective positions by email in December 2011. Neither mediation under GC 3.13.05 nor arbitration under GC 3.14.01 were mandatory, and neither of these provisions were invoked by either party.
[36] I am not satisfied that Network’s claims for unpaid quantities of unit-price line items and for claims asserted during the project for the cost of changes or extra work were submitted to the Town out of time pursuant to GC 3.13.03. I find that the requirement that Network utilize the standard form “Notice of Intent to Claim” to advance these claims was waived by the Town by its practice of processing and paying claims submitted by Network by invoice. If the timing of submission of these claims did not comply strictly with GC 3.13.03, I find that the Town waived such non-compliance by not objecting on that ground when the claims were submitted and by entering into negotiations with Network respecting the claims pursuant to GC 3.13.04.
[37] Network acknowledged through counsel that its claims for changes and extras discovered during the course of the litigation in the amount of $320,304.11 were first advanced by delivery of written claims on April 21, 2016 and received by the Town on April 26, 2016, being in excess of four years after issuance of the Statement of Claim, and four and one-half years following issuance of the said Certificate of Substantial Completion of the Contract. These claims comprise the following:
Number
Subject
Amount
Concrete encase lead
$ 1,651.21
Connection to existing lead pipe
$ 9,000.00
Delay claim for extended duration costs for the period July 29, 2011 to September 30, 2011
$179,305.45
Loss of productivity due to holds, changes, revisions and disruptions over the extended duration
$ 38,046.18
Additional administration and consulting fees (estimate)
$ 60,000.00
Additional bonding and insurance (estimate)
$ 32,301.27
TOTAL
$320,304.11
[38] Mr. van Bodegom, counsel for Network, submitted that the Town waived compliance with GC 3.13.03 by the process which is adopted for responding to and dealing with changes, extras and claims, which varied from the strict provisions of the Contract. He submitted that the evidence of Anthony Lazzara, Corey McPherson and Don Medeiros was that the Town adopted a single procedure which did not distinguish between changes, extras and claims which called for Network to issue invoices or email descriptions during and after performance of the work. After Network detailed a claim, the claim was either paid in full or negotiated through an email exchange. Having chosen to deviate from the strict requirements of the contract, Mr. van Bodegom submitted that the Town cannot “selectively pick and choose” which Contract provisions it wishes, belatedly, to enforce. Having entirely abandoned the Contract provisions for changes, extras and claims, it cannot now attempt unilaterally to demand compliance with some of the Contract’s deadlines.
[39] I do not accept that the Town waived compliance with GC 3.13.03 so as to permit Network to submit claims for the matters referred to above four and one-half years following substantial performance of the Contract.
[40] In Technicore Underground Inc. v. Toronto (City) 2012 ONCA 597 (C.A). Gillese, J.A., writing for the Court, stated as follows at para. 63 regarding a claim of waiver in reference to a similar provision in a construction contract:
The Supreme Court of Canada provides guidance on the doctrine of waiver in Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., 1994 CanLII 100 (SCC), [1994] 2 S.C.R. 490 (S.C.C.). In paragraphs 19, 20 and 24, it lays down the following. Waiver occurs when one party to a contract (or proceeding) takes steps that amount to foregoing reliance on some known right or defect in the performance of the other party. It will be found only where the evidence demonstrates that the party waiving had (1) a full knowledge of the deficiency that might be relied on and (2) an unequivocal and conscious intention to abandon the right to rely on it. The intention to relinquish the right must be communicated. Communication can be formal or informal and it may be inferred from conduct. The overriding consideration in each case is whether one party communicated a clear intention to waive a right to the other party.
[41] The onus of proving the constituent elements of waiver as laid down in Saskatchewan River Bungalows is on Network. I find that it has not proven an unequivocal and conscious intention on the part of the Town to abandon the right to rely on the time requirements in GC 3.13.03 in relation to the claims in question, nor that the Town communicated to Network a clear intention to waive that right.
[42] In any event, I find that, even if the Town did waive strict compliance with GC 3.13.03, it did not waive the requirement that Network advance claims for payment in relation to the project within a reasonable time. The submission of claims four and one-half years after substantial performance of the contract would not be considered reasonable.
[43] I find that Network is therefore barred advancing its claims for changes and extras discovered during the course of the litigation in the amount of $320,304.11. In light of this finding it is not necessary for me to determine whether these claims are barred by the Limitations Act, 2002, S.O. 2002, C.24, Sched. B, as pleaded by the Town.
[44] In any event, I find that these claims have not been proven. Mr. Medeiros testified that the claims for first two items relating to “concrete encase lead” and “connection to existing lead pipe” were simply not identified by Network staff at the time the work was performed, no evidence was led in respect of the delay, loss of productivity, and additional bonding and insurance claims, and the claim for additional administration and consulting fees was abandoned at trial.
Claims for Unpaid Quantities of Unit-Price Line Items
[45] I now turn to a consideration of each of the individual claims for unpaid quantities of unit-price line items specified in the Contract.
[46] Network has advanced 17 separate claims for what it characterizes as unpaid quantities of unit-price line items specified in the Contract. The individual claims are identified on the Scott Schedule in accordance with the individual line items on the Quantity and Price Schedule forming part of the Form of Tender. The descriptions of the individual items set forth below are as set forth on the Scott Schedule.
Item No.
Description
Network Claim
Town Approval
Disputed Amount
A-6 c)
Construction fencing (Provisional item)
$2,472.00
$0.00
$2,472.00
[47] This item relates to Network’s erection and maintenance of plastic orange construction fencing throughout the project. It is specified in the Specifications at SP-5 which states “the contractor shall erect during the initial stage of construction, temporary working fences… as shown on the plans or as directed by the Engineer”.
Network’s Position
[48] Network states that it placed fencing around every open excavation, including the water main and asphalt paving work, and that the average excavation required approximately 40 meters of fencing. It arrived at its quantity of 500 m by estimating the amount of fencing used in a typical day and extrapolating over the number of working days on the Project. Although the specification contemplated erection “prior to construction” it says that it was directed by the Town to use construction fencing where needed.
[49] Network states that there was evidence of repeated, general instructions from the Town, including in two separate site meeting minutes during April 2011, when Network was given a general instruction to “install fencing where feasible”. There were other site-specific fencing instructions in the August 2011 site meeting minutes.
[50] Network says that the distinction which the Town asserts between “construction fencing” and “safety fencing” is not based on any specification, nor is it consistent with common sense or the Town’s written instructions. Even if the required fencing were outside the strict terms of the specification, which Network denies, the Town’s position is untenable because it would be inconsistent with (a) the parties’ procedure with respect to extra work, (b) with the letter of the Contract which makes the Town responsible for preventing loss or damage from the conduct of traffic or pedestrians that the Town allowed on the project site, and (c) with the nature of the unit price contract, and the Town cannot evade payment for required work simply because its Project description is incomplete. Even if the Town’s argument were correct, the fencing would be payable as an extra to the contract.
Town’s Position
[51] The Town asserts that the evidence indicated that Network erected something less than 200 meters of construction fencing. Although there was additional fencing for tree protection, that came under a different pay item for which Network was fully compensated. The Town’s inspector, Kelly Stephens, had no recollection of ever instructing Network to erect construction fencing, and the Region’s inspector, Les Dziadula, denied that he gave Network instructions to install construction fencing around the water main construction. The fencing depicted in the photographs in evidence, although the same material as construction fencing, was in fact either tree protection or safety fencing required by safety regulations.
[52] The Town agreed to pay Network the estimated quantity of 200 m as a compromise, given Network’s unsupported claim for 500 meters. At no time during the course of the Project did Network seek payment for this pay item, and no monthly summary records, any amount of construction fencing. The claim was only made at the conclusion of the Project without any supporting evidence.
Disposition
[53] The distinction between “construction fencing” and fencing for tree protection is not reflected in the Contract. Line item A-6 refers to 4 types of barriers (a) tree protection hoarding (wafer board or plywood panels securely erected); (b) siltation fencing; (c) construction fencing; and (d) straw bale check dams. SP-5 refers to the use of new or salvaged “snow fence” material for the temporary working fence. It also provides for “tree protection hoarding” to be constructed in accordance with the Town of Oakville’s Tree Protection Policy. As depicted in the photographs in evidence, Network seeks payment under this item for the use of what would be described as “snow fencing”. There is no provision in the Contract for the use of “snow fencing” for tree protection.
[54] Similarly, the Town was unable to point to a separate item for “safety fencing”, as distinct from “construction fencing”, nor was there evidence that the use of “construction fencing” was for a purpose other than maintaining safety.
[55] The Site Meeting Minutes of April 13 and April 27, 2011 each refer under the heading “safety” to a requirement that “each day the site-foremen meet to discuss their work, clearances required and install fencing where feasible” (emphasis added). Moreover reference was made in the Site Meeting Minutes of August 17, 2011 to the use of “construction fencing” to address “safety concerns” in a particular location.
[56] Although construction fencing was identified in the tender documents as a “provisional” item, I find that the Town did, expressly or impliedly, direct Network to use “construction fencing” at various locations during the course of the Project. The Town maintained no record of the quantity of construction fencing used. I find Network’s estimate of 500 m to be reasonable and the best evidence of the quantity utilized and I therefore allow its claim for item A-6 c) in the sum of $2,472.00.
B-21
HL-6 Clear Stone (Provisional item)
$24,779.40
$0.00
$24,779.40
[57] The specification for HL-6 clear stone related to water main work and was stated in the Quantity and Price Schedule to be “provisional” in that it is to be used “subject to the Authority’s approval”. It is used as a foundation in the water main trench if there are wet conditions which require stability. Other types of aggregate contain sand, which can become saturated and erode in wet conditions, leaving the water main pipe without support.
Network’s Position
[58] Network claims a quantity of 1018.89 tonnes, which was derived from the clear stone aggregate tickets taken by its foremen from each truckload delivered to the site.
[59] Network’s foreman overseeing the water main work, Joe Medeiros, testified that the water main had to cross many gas lines, telephone lines and water lines and that at each crossing the Region’s inspector, Les Dziadula, required Network to place clear stone underneath the pipe in order to support the structure, as well as at each valve along the water main.
[60] Network submits that Anthony Lazzara substantially confirmed Network’s position, testifying that clear stone should be used in the water main trench and should have been put down under all structures. He stated that he personally saw clear stone in the trench during water main installation. Although the Region inspector, Les Dziadula’s, testimony was simply that he did not stop Network from using any type of material, neither did he dictate such use. Network submits that acquiescence in the face of it supplying the clear stone required by the Project would be sufficient to constitute “approval”.
[61] Even if Network’s claim for clear stone under item B.21 mistakenly included all clear stone used on the 15 hydrants on the project, that would result in a deduction of only 3.75 tonnes, or less than 0.5% of the 1018.89 tonnes claimed.
Town’s Position
[62] The Town submits that Les Dziadula testified that, contrary to the evidence of Joe Medeiros, he did not give him instructions to install HL-6 clear stone as support for the structures related to the water main crossing utility lines.
[63] Les Dziadula gave evidence that HL-6 clear stone was used as bedding for fire hydrants as part of an all-inclusive pay item.
[64] The Town submitted that Don Medeiros signed off on the January, 2011 monthly summary confirming that no HL-6 had been used and was only at the end of the project that Corey McPherson sought payment for this item, even though he was not present on the Project during the water main construction.
Disposition
[65] The resolution of this item is dependent upon a consideration of the conflicting evidence of Network’s foreman, Joe Medeiros, and the evidence of the Region’s inspector, Les Dziadula. As a provisional item in the tender documents, the use of HL-6 Clear Stone as a foundation for the water main trench was to be subject to the Authority’s approval. Anthony Lazzara confirmed that the “Authority” for this purpose was the Region as it related to the water main work. Joe Medeiros testified that Les Dziadula gave the field instructions to use HL-6 Clear Stone below the water main at points where it crossed utilities and below valves to provide stability. He stated that the instructions from Les Dziadula were never in writing and that Network only placed HL-6 Clear Stone where Les Dziadula directed it to be placed. He described Les Dziadula as being “beside me all the time”.
[66] Les Dziadula testified that as, a provisional item, HL-6 Clear Stone was to be used, subject to his approval on behalf of the Region, if the bottom of the trench was found to be wet and unstable. He stated that he could not recall approving the use of any HL-6 Clear Stone. On cross-examination he indicated that his notes “did not reflect giving them (Network) instructions” to use HL-6 Clear Stone.
[67] It is evident that throughout the Project, the Region and the Town each utilized an informal process for their respective inspectors to give instructions to Network, such that verbal instructions were regularly given in the field, and were not necessarily documented in field notes, minutes or memoranda. I do not find it unexpected that Joe Medeiros would testify that Les Dziadula exercised close supervision of the trench work and that he gave verbal instructions to him for the placement of HL-6 Clear Stone below the water main at utility crossings.
[68] Joe Medeiros and Les Dziadula were each credible witnesses in the sense of being motivated to do their best to be truthful to the best of their recollection. However, I find Joe Medeiros’ evidence to be more reliable in relating the nature of the instructions, which he received from Les Dziadula, who simply stated that he could not recall approving the use of any HL-6 Clear Stone and that his notes did not reflect giving such instructions. He did not deny that such instructions were given. Moreover, it would not be expected that such instructions would be recorded in his notes. It was not suggested by the Town that the use of HL-6 Clear Stone to provide stability at utility crossings was not in accordance with accepted construction practice. I find that Joe Medeiros’ version of the events on this issue make sense on a balance of probabilities.
[69] Pursuant to GC 8.01.01, the monthly summaries were estimates only and Network was therefore not bound by having “signed-off” on monthly summaries.
[70] Network allowed for the possibility that its claim mistakenly included all clear stone used on the 15 hydrants on the project, which would represent up to 0.5% of the total quantity. I would therefore allow Network’s claim for this item in a reduced amount of $24,655.50.
D-7
Adjust existing catch basins, manholes and valve chambers
$17,400
$0.00
$17,400
[71] This item relates to SP-10 which provides for the Network to adjust existing manholes, catch basins and valve sleeves to suit the proposed new grade of the road surface. The contract drawings indicated that there were 83 such structures. The Quantity and Price Schedule estimated that 31 such structures may need to be adjusted.
Network’s Position
[72] Corey McPherson prepared a summary identifying all of the structures on the drawings, comprising 83, including 66 on the road and 17 in the boulevards or driveways. Network submitted that all of the structures identified needed adjustments over the course of the project as grades changed during construction. Although the structures would often require multiple adjustments, Mr. McPherson counted each structure only once. Moreover, Network’s foreman, Enrique Huerta, confirmed his daily records which documented the actual work and which recorded adjustments on a daily basis. He also confirmed that Network did not install the structures at final grade, as structures left too high would lead to damage to both vehicles and structures. Ongoing road construction changed not only the road elevation but also the elevation of abutting boulevard areas.
[73] Network submitted that the Town was unable to substantiate its count of 25 adjustments from the field notes, which only documented 7 adjustments, nor from the monthly summaries which only noted 5 adjustments.
Town’s Position
[74] The Town’s position is that not all of the existing structures actually needed to be adjusted as many of them were at the appropriate elevation. The Town’s inspector, Kelly Stephens, gave evidence that she and the other inspectors kept a count of the structures that were required to be adjusted and reported the number to Anthony Lazzara, who recorded it in the monthly summaries. On this basis, the Town paid for 25 adjustments. Ms. Stevens gave evidence that on some occasions she observed Network having to correct an error that it made to an adjustment requiring a further adjustment. There is no entitlement to be paid for correcting an error. Monthly summaries were agreed to by Network on an ongoing basis throughout the course of the project. It was only at the conclusion of the work that Network sought payment for additional items. The Town submits that Network’s claim for adjustments to all 83 structures is based simply on the count of the number of structures on the drawings and not on legitimate adjustments made in the field.
Disposition
[75] The resolution of this item depends upon a consideration of the evidence of Network’s foreman, Enrique Huerta, and the Town’s inspector, Kelly Stephens. Mr. Huerta testified that each of the existing structures had to be adjusted to the final grade as determined by the drawings. The manholes in particular had to be adjusted twice - first to the level of the base coat of asphalt and later to the final grade. He produced his daily report sheets, which confirmed the adjustments to the structures which he testified to. It is noteworthy that although he was cross-examined, Mr. Huerta was not cross-examined on this item.
[76] Kelly Stephens, for her part, testified that not all of the structures required adjustment. Whether adjustments were required depended upon whether there were changes in the elevation at the location of each structure. She stated that at some places the elevation did not change. She also indicated that it was “possible” that Network made errors and had to re-attend to make correcting adjustments. Ms. Stephens was unable to point to any records maintained by the Town with respect to the number of adjustments carried out by Network.
[77] I find Enrique Huerta’s evidence, supported by his daily report sheets, to be persuasive with respect to the number of adjustments to existing catch-basins, manholes and valve chambers that Network carried out. Ms. Stephens’ evidence that not all of the structures required adjustment but only those in respect of which the elevation changed was theoretical and not specific. Although she indicated that it was “possible” that Network carried out adjustments in certain instances to correct its own errors, that proposition did not rise to the level of probability.
[78] I find that Network has made out its claim for this item on a balance of probabilities in the sum of $17,400.
D-8
Adjust existing valve sleeves/covers
$20,350
$7,425
$12,925
[79] This item also relates to SP-10. As with item D-7 the Contract drawings indicate that there were 83 valve sleeve/cover structures. The Quantity and Price Schedule estimated that there were 49 existing such structures which might need to be adjusted.
Network’s Position
[80] Corey McPherson testified that all structures in the paved areas needed to be adjusted as the grade of the road changed throughout construction and that most of the structures in the boulevard needed to be adjusted for the same reason, that is, to prevent exposure of dangerous structures in an active construction zone or roadway. Mr. McPherson testified that even if specification D-8 did not cover the 20 adjustments in the boulevards, the Town would not get those necessary adjustments for free and there would need to be a change to the Project to cover that work.
[81] Network’s production sheets showing the daily quantities of adjustments were put into evidence. Despite multiple adjustments on most of the structures, Mr. McPherson only counted the final adjustments to suit final grade for payment.
[82] Network points out that the Town’s initial position was that there were only 36 adjustments and made payment on that basis but now admits that there were 63 adjustments, being in excess of the tender amount of 49. The Town inspectors’ field notes made no record of any adjustments.
Town’s Position
[83] The Town submits that Network’s claim for payment to adjust all 83 structures is based simply on account of the number of structures on the drawings and not on legitimate adjustments made in the field.
Disposition
[84] As with item D-7, Network’s evidence with respect to D-8 is more specific than that of the Town. Enrique Huerta testified that all of the valve sleeves and covers, comprising parts of the water valve structures, required adjustment, first to the level of the base asphalt and then to the final grade. He produced his daily report sheets, which recorded the adjustments to the valve sleeves.
[85] Ms. Stephens’ evidence with respect to D-8 was similar to her evidence respecting D-7. She indicated that there “could have been” deficiencies requiring readjustment by Network. When asked if the adjustments were recorded in the daily work records of the student inspectors she responded that they could have been handwritten on the drawings instead of being recorded on their work records. In any event, the Town did not produce any written records evidencing the number of adjustments carried out.
[86] I find that Network has made out its claim for D-8 on a balance of probabilities in the sum of $12,925.
D-10
Supply and install new frames and covers
$7,486
$0.00
$7,486
[87] This item relates to SP-14. The Quantity and Price Schedule estimated that 8 frames and covers for manholes and catch basins may need to be replaced.
Network’s Position
[88] Network submits that it replaced all 24 frames and covers and that its claim for that quantity is supported by the summary of structures, work, and third-party invoices. Enrique Huerta testified that replacement of all frames and covers was on the express instructions from Town inspectors.
[89] Network submits that the Town’s count of five frames and covers did not come from its field notes, as no frames and covers were recorded in those notes and no monthly summary produced by the Town noted frames and covers. There is no evidence that any Town inspector instructed Network to stop replacing any of the frames and covers.
Town’s Position
[90] The Town submits that only damaged frames and covers were to be replaced with new ones and that a count was done in the field and there were only five new frames and covers. Only eight catch basin manholes were identified during the design as requiring replacement, being “birdcage” structures without flat lids, however during construction it was discovered that three already had flat lids and therefore did not need to be replaced. Enrique Huerta’s evidence that he received instructions from the Town’s inspector to replace all frames and covers was contradicted by Kelly Stephens’ evidence that she gave no such instructions. The Town submits that the evidence of its witnesses should be preferred over that of the Network witnesses, as it is consistent and logical, while Network’s position is based merely on the total count of structures from the drawings.
Disposition
[91] The resolution of this item requires a consideration of the evidence of Enrique Huerta’s and Kelly Stephens. Mr. Huerta testified that Ms. Stephens instructed him to replace all of the frames and covers on the manholes, while Ms. Stephens testified that she did not instruct Network which of the frames and covers to replace. Only those which were damaged were to be replaced, along with the “birdcage” covers, which the Town acknowledged required replacement.
[92] Unlike items D-7 and D-8 Mr. Huerta’s evidence was not supported by documentary records. I find that Ms. Stephens’ evidence that not all of the covers required replacement made sense and accorded with the estimate in the Quantity and Price Schedule indicating that some, but not all, of the frames and covers would need to be replaced. Network led no evidence with respect to the nature of the damage to the existing covers which necessitated replacement.
[93] I find that Network has failed to satisfy the onus on it with respect to this item on a balance of probabilities and it is disallowed.
E-2
Supply and excavate for and place 300 mm storm sewer and catch basin lead pipes with rubber gaskets. Backfill with Granular B Type 1 material and backfill
$11,632.89 ($11,574.14 for quantity difference + $58.75 for payment shortfall)
$58.75
$11,574.14
[94] The specification for the supply and placement of 300 mm storm sewer pipe is SP-13. The estimated length of pipe on the Quantity and Price Schedule was 256 m. The quantity claimed by Network was 276.4 m, whereas the Town’s quantity was 198 m.
Network’s Position
[95] Network states that its claimed quantity of 276.4 m was calculated from its daily work records and confirmed by the contract drawings. Corey McPherson testified that he made a contemporaneous calculation, adding up quantities from specific daily work records and indicating where certain links needed to be taken from the relevant part of the drawings. He compared this calculation to his contemporaneous calculation of horizontal lengths from the drawings, which did not take into account the site conditions and obstacles affecting the actual length required, adding up to 245.8 m, significantly higher than the Town’s position.
[96] Network submits that Anthony Lazzara was unable to explain why the Town’s position of 198 m is so much lower than its tender quantity of 256 m. He confirmed that no change in the Project would account for the downward revision in horizontal measurements. The Town’s field notes only added up to 167.11 m and Mr. Lazzara was unable to identify any evidence substantiating the 198 m figure. Network submits that the Town simply failed to record substantial relevant work. Although Kelly Stephens testified that she measured quantities, she admitted that she was not on-site prior to April, 2011 and the evidence shows that Network documented more than 50 m for this item from several days of daily work records during March, 2011. Only two of the Town’s March, 2011 field notes address E-2, with a total quantity of 15.5 m.
[97] Moreover, Network points out that Anthony Lazzara confirmed that the Town inspectors’ measurements ought to have been from the centre of structure to centre of structure, whereas Stephens testified that she only measured the length of the pipe and could not recall how far into each structure the pipe extended. Network submits that a significant portion of the discrepancy between the parties’ positions could be accounted for by this error in measurement by the Town.
Town’s Position
[98] The Town submits that the quantity of storm sewer pipe under item E-2 is determined by measurement in the field conducted by the Town’s inspectors. Although Kelly Stephens was not on the project from its commencement, there were other inspectors for the Town who were, and the quantities provided by the various inspectors were given to Anthony Lazzara through the monthly summaries. There is no evidence that Network ever complained about the quantities as recorded on a monthly basis and it was not until the end of the Project that Corey McPherson took measurements from the drawings and arrived at the theoretical quantity of 276.4 m and advanced the claim.
[99] The Town submits that its position should be preferred over that of Network, as it is based on the contractual requirement of measurement in the field, while Network’s position is speculative and is based merely on a review of the drawings and unsupported by field measurements.
Disposition
[100] I find Network’s calculation with respect to this item, although not completely supported by its daily work records, to be preferable to that of the Town. Corey McPherson testified that he made a contemporaneous calculation and that any gaps in the daily work records were able to be filled with reference to the drawings. The Town was unable to explain the large shortfall between the total length of the pipe recorded in its field notes and the estimated length in the Quantity and Price Schedule and, I find the Town’s position of 198 m to be unsupported by the evidence.
[101] I find that Network has made out its claim for E-2 on a balance of probabilities and it is allowed in the sum of $11,574.14.
E-7
Break into existing storm sewer with risers OPSD 708.010
$11,655
$0.00
$11,655
[102] This item relates to SP-15 which provides that “the Contractor shall make whatever openings are necessary in existing manholes and catch basins and grout in the required pipes. Payment will be made for each complete pipe connection made.” The Quantity and Price Schedule estimated 13 such break-ins and connections. Network’s claim is for 22 while the Town’s position is that there were 13.
Network’s Position
[103] Network disputes the position taken by the Town that since the difference between the two calculations (9) is the same as the number of connections paid for under E-6, Network is therefore double-counting. Network says that both its witness’ testimony and the documentary evidence clearly distinguish the structures to which these two items (E-6 and E-7) relate.
[104] Network points to Corey McPherson’s testimony respecting his contemporaneous summary relating to items E-2, E-6 and E-7, which no Town witness challenged or addressed.
[105] Anthony Lazzara could not explain why the Town’s field notes did not record the number put forward by the Town. The Town provided no evidence on the proper E-7 locations from any other source.
Town’s Position
[106] The Town says that it paid for 13 break-ins under this item, the same number as the estimated tender quantity. Network seeks payment for a further 9, the same number as for E-6 for which it has already been paid.
[107] The Town says that the evidence from all witnesses was clear that there were only a total of 22 break-ins required as shown on the drawings, but that not all required risers, but only leads which went over the water main needed risers which totalled 13.
[108] The Town argues that Network seeks payments for items for which it has already been paid under E-6.
Disposition
[109] The Town’s position that Network, by this item, seeks payment for items for which it has already been paid under E-6, on the basis that the number of connections for which it seeks payment is the same as the number of connections under E-6, is, in my view, supposition, not supported by the evidence.
[110] I find that the calculation put forward by Network through the evidence of Corey McPherson satisfies the onus on it for this item on a balance of probabilities and its claim for E-7 is allowed at $11,655.
E-8
Excavation of materials (grading) including stripping and disposal of surplus material
$144,452.55 ($144,449.38 for quantity difference + $3.18 for payment shortfall)
$3.18
$144,452.55
[111] Item E-8 relates to the earth excavation required in the roadway and boulevards, including stripping and disposal of surplus material. The specification is SP-16 which provides, after describing costs of excavation which are to be paid for under separate items:
“the remainder of the excavation required to produce the roadways as shown on the plans, profiles, cross-sections and typical cross-sections is to be lumped together under the contract item entitled ‘Earth Excavation and Grading’ and will be paid for the Plan Quality measurement (sic).”
Pursuant to GC 1.04 “Plan Quantity” means “that quantity as computed from within the boundary lines of the Work as shown on the Contract Documents”.
[112] GC 8.01.01.03 provides, in part, as follows:
“Measurement of the quantities of the Work performed may be either by Actual Measurement or by Plan Quantity principles as indicated in the Contract… Those items identified on the Tender by the notation (P) in the unit column shall be paid according to the Plan Quantity. Items where the notation (P) does not occur shall be paid according to the Actual Measurement or lump sum.”
[113] The Quantity and Price Schedule for E-8 in the Form of Tender provided an “est. qty” (or estimated quantity) of 15,500 m³. However this figure was not identified by the notation “(P).”
[114] Network claims a quantity of 24,602.04 m³, whereas the Town has paid for 15,500 m³, being the “estimated quantity” set forth on the Quantity and Price Schedule.
[115] The parties disagree as to whether item E-8 is to be paid for according to Plan Quantity principles or Actual Measurement.
Network’s Position
[116] Network submits as follows:
(a) E-8 should be paid on a unit-price basis, and it has provided an accurate, and indeed the only, calculation of actual quantity;
(b) alternatively, even if E-8 is a “Plan Quantity” item, Network’s calculation from GPS measurements is an accurate calculation of the Plan Quantity since that calculation, which relies upon the Town’s own AutoCAD files, is the most accurate quantity “computed from within the boundary lines of the Work as shown in the Contract Documents”; and
(c) in any case, if the actual excavation exceeded the initial Plan Quantity, then this is still payable as a change or extra relative to the Project’s scope or design.
[117] With respect to the Town’s position that E-8 is to be calculated to a Plan Quantity in cubic metres calculated from the drawings, rather than in the field, Network points out that it appears as a unit-price item in the tender. There was no “(P)” notation on the tender form. Paul Allen testified that the Town intentionally omitted the “(P)” notation from the tender sheet provided to bidders and from the Addendum that later replaced it. The specification did not purport to change the General Condition requiring a “(P)” notation nor was there any other specification or Supplementary Condition that changed that provision in the General Conditions. Network argues that if the Town is correct that the specification SP-16 should take precedence over the General Conditions, then the same order of precedence in the Contract requires the issued Addendum, with E-8 again appearing as a unit-price, must take precedence over specification SP-16.
[118] Moreover, Network states that the Town breached its own General Conditions, which unambiguously required it to use the “(P)” notation in its tender form, and effectively misled Network, which reasonably relied on the Town to follow the General Conditions which the Town itself dictated.
[119] Network further submits that, in advancing its position whereby the Town’s own intentional drafting choices solicited a tender based on an entirely reasonable misunderstanding, the Town breached its obligations to deal with Network in good faith. Network relies upon Bhasin v. Hrynew, 2014 SCC 71 at paras. 63-65 and 92-93 in this respect.
[120] In the alternative, Network argues that the confusion caused by the Town’s inconsistent and misleading drafting resulted in no meeting of the minds on the point. In the absence of a mutually agreed price for required work, the Court should require payment on a quantum meruit basis. The most reasonable basis for calculating the quantum meruit amount would be to use the actual amount excavated at the unit price in the Quantity and Price schedule.
[121] In any event, Network argues that, if E-8 is a Plan Quantity item, its quantity is still more reliable as an accurate calculation of the plan quantity. The Town witnesses did not challenge the accuracy of the GPS data produced by Network and, by contrast, the Town has not identified its actual Plan Quantity figure. There was no direct evidence of the underlying calculation of the Plan Quantity that may have been carried out by its engineer David Salt in preparing the plans. Moreover the Town’s Plan Quantity calculation included only the roadway portion and not the boulevard or topsoil portions which were to be included.
[122] Network points out that there was a significant discrepancy between the Town’s field note quantity of 16,549.30 m³ and the position of the Town that it is responsible to pay for only 15,500 m³. Network submits that the inaccuracy of the Town’s measurements may have been due in part to the inaccuracy of the tools which it utilized, namely tape measures. Enrique Huarta testified that GPS measurement was industry-standard and Anthony Lazzara agreed with him that GPS was a more accurate method of measurement than tape measure.
[123] In the further alternative, Network submits that E-8 ceased to be a Plan Quantity item when changes to the elevation or grade affected the amount excavated. Although the Town’s evidence was that the road ultimately built matched the drawings, only Network’s position and calculation take into account the conditions of the pre-existing road, which is necessary since E-8 is an item for removing the pre-existing road down to the sub-base for the new (lower) road. Paul Allen’s evidence that he could approximate the amount of the excavation by looking at Granular A and B and asphalt quantities installed is not reliable because it does not take into account the fact that the new road was lower than the pre-existing road, resulting in significantly more excavation than fill.
[124] Network submits that it did in fact excavate the amounts set out in its GPS calculations and that either (a) that amount is the same as the Plan Quantity, calculated correctly, and should be paid on that basis or (b) the actual excavated amount exceeded the Plan Quantity due to elevation changes and should be paid as a change or extra to the Contract.
Town’s Position
[125] The Town submits that, by virtue of specification SP-16, payment for E-8 was required to be on a “Plan Quantity” basis, the Plan Quantity being 15,500 m³ as set forth on the Quantity and Price Schedule at the time of tender. The Town argues that when there is a conflict or inconsistency between the provisions of the plans and specifications of the Contract, the order of precedence applied, and the Town’s specification SP-16 prevails over the General Condition which required identification of a “Plan Quantity” item by the use of the notation (P). Specification SP-16 states that payment for earth excavation is by way of “Plan Quantity measurement”.
[126] The Town argues that there is no evidence that Network corroborated its GPS calculated volume with any other calculations or supporting data.
[127] The Town submits that Kelly Stephens disputed Enrique Huarta’s suggestion that the Town agreed with the use of the GPS as a methodology for determining the quantity of the excavation, and stated that she and the other inspectors took field measurements on an ongoing basis so as to monitor Network’s work. Although these measurements were not used to calculate the measurement for payment purposes, they confirm that the Plan Quantity was accurate as it related to the measurements in the field.
[128] Moreover, the Town points out that Allen described four ways to confirm the Plan Quantity:
(a) it was calculated from the autoCAD design;
(b) the field measurement records corroborate the Plan Quantity;
(c) a length x width x depth calculation closely matches the Plan Quantity; and
(d) a comparison between what is excavated versus what is placed into the excavated area (volume of granular A and B and asphalt) confirms the Plan Quantity.
[129] The Town says that Network failed to provide any evidence of a calculation from the Contract Drawings to show that the Town had improperly calculated the Plan Quantity. Corey McPherson refused to provide Network’s GPS calculations to the Town during the course of construction and it was only at the conclusion of the project that Network made a claim for 9102.04 additional cubic metres of excavation, a 60% increase over the plan quantity, which is unsupported by anything other than the GPS calculation.
Disposition
[130] Even if SP-16 characterized item E-8 as a “Plan Quantity” item, I find that the Town did not provide a “Plan Quantity” figure in the Contract, nor did it prove the correct Plan Quantity calculation in evidence.
[131] As indicated above, GC 1.04 defines “Plan Quantity” as “that quantity as computed from within the boundaries of the Work as shown in the Contract Documents.” The phrase “Contract Documents” is given an all-inclusive definition comprising all of the contractual documents referred to in paragraph 9 above, including the “Tender” and the “Contract Drawings.”
[132] The figure upon which the Town relies as constituting the “Plan Quantity”, being 15,500 m³, appears only in the Quantity and Price Schedule forming part of the Form of Tender. It is listed in the column entitled “Est. Qty.” (that is, “estimated quantity”). No distinction is made between the figure for E-8 and the figures for the various other items listed in the Quantity and Price Schedule. They are all clearly stated to be estimated quantities. The Town did not lead evidence that the 15,500 m³ figure appears anywhere else in the Contract Documents.
[133] Regardless of the order of precedence between the specification SP-16 and the General Conditions, there was nothing to indicate that the 15,500 m³ figure was anything other than an estimate. In the event that the Town sought to fix a “Plan Quantity” for item E-8, it was incumbent upon it to clearly identify a fixed quantity, computed from the Contract Drawings, rather than an estimate.
[134] GC 8.01.01.03 states, in part, “those items identified on the Tender by the notation (P) in the unit column shall be paid according to the Plan Quantity.” It is apparent from this that the question of whether the measurement of the quantities relating to an item is to be done by Actual Measurement or by Plan Quantity principles, and hence the basis for payment, is to be determined at the time of tender and not after the work is performed. The quotation from GC 8.01.01.03 above refers to “the Plan Quantity” (emphasis added), that is “the plan quantity” identified in the tender.
[135] SP-16 similarly uses the phrase “the Plan Quantity measurement.” In my view this connotes a Plan Quantity measurement specified at the time of tender, not one to be calculated after the work is completed. This conclusion is consistent with the statement in GC 8.01.01 that Plan Quantity measurements are subject to adjustment. The provision states “adjustments to Plan Quantity measurements shall normally be made using Plan Quantity principles but may, where appropriate, be made using Actual Measurements” (defined in GC 1.04 as the field measurement). Thus, an effective identification of a Plan Quantity item requires an accurate “computation” by the owner of the quantity from within the boundary lines of the Work as shown on the Contract Documents, specifically the Contract Drawings. This quantity may be subject to subsequent adjustment using Plan Quantity principles or, where appropriate, using Actual Measurements.
[136] The Plan Quantity concept does not contemplate the owner providing a quantity figure described as an estimate in the tender documents, as that would not achieve the objective of providing a fixed quantity for tendering purposes, which would be subject to adjustment, if necessary. Since no Plan Quantity was provided by the Town for item E-8, but rather only an estimate of 15,500 m³, SP-16 was ineffective in identifying it as a Plan Quantity item. Put simply, SP-16 which stipulated that the excavation required to produce the roadways “will be paid for the Plan Quantity measurement (sic)” was ineffective because the Town did not provide a Plan Quantity measurement.
[137] In the event that I am wrong in finding that the 15,500 m³ figure in the Quantity and Price Schedule was an estimate, but rather should be characterized as a Plan Quantity measurement, that figure is subject to adjustment pursuant to GC 8.01.01.03 based upon the Actual Measurement, where appropriate. In my view, SP-16 did not have the effect of excluding the provision in GC 8.01.01.03, providing for the adjustment of a Plan Quantity measurement.
[138] I find that the quantity figure for the excavation performed by Network under E-8, calculated using GPS technology, is sufficient proof of the actual measurement on a balance of probabilities. The Town led no evidence challenging Network’s GPS data, did not take its own measurements of the excavation for payment purposes, and did not put any complete and reliable actual measurements into evidence. The Town also failed to lead evidence on how the 15,500 m³ figure was calculated from the Contract Drawings or otherwise.
[139] Network asserts a quantity of 24,602.04 m³, being approximately 158% of the 15,500 m³ purported “Plan Quantity” provided by the Town. Even if the 15,500 m³ figure may be characterized as the Plan Quantity, I find that it is appropriate to adjust the Plan Quantity using the actual measurement as determined by Network, in the absence of any reliable actual measurement carried out by the Town, or suggestion that it would be more appropriate to make the adjustment by the alternate method under GC 8.01.01.03, that is according to Plan Quantity principles.
[140] I therefore find that Network has made out its claim for payment in relation to item E-8 and it is allowed in the sum of $144,452.55.
E-9
Supply, place and compact Granular “B” type II for road sub-base
$22,039.13 (after deducting overpayment of $3.68)
$0.00
$22,039.13
[141] This item concerns the supply, placement and compacting of the Granular “B” Type II material for the road base, and relates to SP-17. The estimated quantity set forth in the Quantity and Price Schedule was 19,150 tonnes. Network claims that it supplied 22,244.35 tonnes, whereas the Town’s quantity is 20,926 tonnes, representing a quantity difference of 1318.35 tonnes.
Network’s Position
[142] Network says that its quantity comes from the relevant subset of the aggregate tickets taken from each truckload by Network’s foremen. Corey McPherson testified to his corrected calculation including (a) a correction to the total tonnage for May to August 2011, based on the tickets actually in evidence, and (b) a proper correction to the amount deducted for a separate item relating to driveways, based on the GPS data in evidence.
[143] Network submits that neither the on-site records nor the Monthly Summaries support the Town’s position. Anthony Lazzara admitted that he personally did not carry out the calculation from aggregate tickets and no other Town witness claimed to have done so. Mr. Lazzara conceded that the Town’s position of 20,926 tonnes is incorrect and that the actual quantity must be at least the 22,198.28 tonnes shown in the inspectors’ field notes.
[144] Network says that its quantity is not based on “after-the-fact calculations”, as asserted by the Town. Only Network has produced its actual tickets for this item along with a contemporaneous calculation containing a daily breakdown of aggregates applied.
[145] Network also says that the Town has failed to show that Network lacked “proper control” of the granular material. It was the Town inspectors’ job to carefully confirm and record which item of granular material was going to and the Contract expressly required the Town inspectors to see to the satisfaction of the specifications.
[146] Anthony Lazzara acknowledged that he would have stopped any over-excavation in the boulevards if he had noticed it and did not do so, and the site meeting minutes did not mention any such over-excavation.
[147] Under the General Conditions, each Monthly Summary was only an estimate, in contrast to the Actual Measurement that was to inform the final quantities.
Town’s Position
[148] The Town pointed to Kelly Stephens’ evidence that not all tickets for deliveries of Granular “B” Type II related to this item, as this material was used for other aspects of the Project and could have been paid under other pay items.
[149] The Town says that at no time during the course of the Project did Network dispute the quantities recorded in the monthly summaries for this item and it was only at the conclusion of the Project that McPherson calculated the total quantity of Granular “B” Type II delivered to the project.
[150] The Town says that Network lacked proper control of the granular material delivered to the site, including Granular “B” Type II, and that it over-excavated parts of the Project including boulevards and driveways, thus requiring the placement of granular material to remedy the over-excavation.
[151] The Town submits that its quantity is measured in the field and recorded on the monthly summaries approved by Network should be preferred to Network’s after-the-fact calculations.
Disposition
[152] I find that Network’s corrected calculation of the quantity for item E-9, based upon the aggregate tickets taken by its foremen from each incoming truckload is reliable. Anthony Lazzara acknowledged on cross-examination that the Town inspectors’ field notes recorded a total of 22,178.28 tonnes of material attributed to E-9, being 1252.28 tonnes in excess of the Town’s position of 20,926 tonnes and only 66.07 tonnes less than Network’s quantity.
[153] I find that Network was not bound to the quantities in the monthly Progress Payment Certificates, as, pursuant to GC 8.01.01, they were estimates only. GC 8.01.01.02 states “such quantities for progress payment shall be construed and held to approximate. The final quantities for the issuance of the Completion Payment Certificate shall be based on the measurement of Work completed.”
[154] I find that Network has made out its claim for item E-9 on a balance of probabilities and it is allowed in the sum of $22,039.13.
E-10
Supply, place and compact 19mm crusher run limestone for road base
$52,506.65 (after deducting overpayment of $1.17)
$0.00
$52,506.65
[155] Item E-10 relates to specification SP-18 involving the supply, placement and compacting of crusher run limestone material, also referred to as Granular “A,” for the road base. The estimated quantity in the Quantity and Price Schedule was 6150 tonnes, which is the exact amount which the Town claims was supplied, whereas Network claims that it supplied 9290.42 tonnes, representing a difference of 3140.42 tonnes.
Network’s Position
[156] Network points to Corey McPherson’s contemporaneous calculation from the relevant aggregate tickets, along with the daily breakdown of Granular A supplied. He explained three corrections in the updated calculation, namely, (a) a correction to the relevant tonnage for May to August 2011, based on tickets actually in evidence, (b) a deduction to Claim 109702 to avoid any potential double-counting of a different claim by Network, and (c) a correction to the amount deducted for separate driveways and sidewalk items based on the GPS data and payment quantities in evidence.
[157] Network points out that although Anthony Lazzara speculated that Network may have included Granular A used in sidewalks and boulevards in its E-10 calculation, he later acknowledged that the Town’s own inspectors appear to have recorded a specific quantity for E-10 that was nearly 2000 tonnes higher than the Town’s position. Mr. Lazzara could not explain the discrepancy and could give no reason why the Town should pay less than its own quantity records of 8114.36 tonnes.
[158] Network points out that the Town did not put any of its tickets or any calculation from tickets into evidence. It also failed to show that Network lacked “proper control” of the granular material or that there was any over-excavation that could have inflated the E-10 quantity. The site meeting minutes did not reflect any complaint of over-excavation during the Project and Anthony Lazzara made no such complaint. Lazzara admitted that the Town’s own field notes for E-10 are closer to Network’s position than to the Town’s position.
Town’s Position
[159] The Town points to Kelly Stephens’ evidence that not all tickets for deliveries of Granular “A” were counted towards E-10. Only tickets for the road base were counted towards E-10. Granular A material was used for other aspects of the Project and could have been paid for under other pay items.
[160] The Town says that Network did not dispute the quantities recorded in the monthly summaries and it was only at the conclusion of the project that McPherson calculated the total quantity of Granular “A” delivered to the Project and on that basis sought to recover additional quantities beyond the Town’s field measured quantity.
[161] The Town says that Network lacked proper control of the granular material delivered to the site including Granular “A”. It also says that Network over-excavated parts of the Project including boulevards and driveways, thus requiring the placement of granular material to remedy the over-excavation.
[162] The Town submits that its quantity is measured in the field and recorded in the monthly summaries, and approved by Network, should be preferred over Network’s after-the-fact calculations.
Disposition
[163] Network backed up its adjusted claim that it supplied 9290.42 tonnes of Granular “A” material for the road base with the relevant aggregate tickets. Anthony Lazzara was unable, on cross-examination, to explain the discrepancy between the quantities recorded by the Town’s inspectors for this item in the sum of 8114.36 tonnes and the Town’s position that 6150 tonnes were supplied, being the exact amount estimated in the Quantity and Price Schedule. Anthony Lazzara stated on cross-examination that it was “just a coincidence” that the two figures are the same.
[164] The quantity recorded by the Town’s inspectors was closer to Network’s position than that of the Town. As with E-9, Network was not bound to the quantities in the monthly Progress Payment Certificates, as pursuant to GC 8.01.01 they were estimates only.
[165] The Town’s submission that Network lacked proper control of the granular material delivered to the site including Granular “A” and that it over-excavated parts of the Project is a statement of position unsupported by actual evidence.
[166] I find that Network has made out its claim for item E-10 on a balance of probabilities and it is allowed in the sum of $52,506.65.
E-11
Supply, mix and place Heavy Duty HL-8 Binder course asphalt (including temporary Ramping as required)
$1,570.24 ($1,563.16 for quantity difference + $7.08 for Payment Shortfall)
$7.08
$1,563.16
[167] Item E-11 relates to specification SP-3 providing for the supply, placement and mixing of HL-8 binder course asphalt for the road surface. The estimated quantity in the Quantity and Price Schedule was 4,261 tonnes. Network claims that it supplied 4,330.88 tonnes. The Town’s position is that 4,311 tonnes was supplied, representing a difference of 19.88 tonnes.
Network’s Position
[168] The discrepancy between Network’s quantity and the Town’s quantity relates to one truckload of HL-8. Network relies on the HL-8 tickets provided by its subcontractor, Coco Paving Inc., having already deducted one load that Coco Paving stated went into a driveway rather than the roadway.
[169] Network submits that the Town did not put any tickets in evidence, nor any calculation from tickets, and has formally admitted that it does not have any information, knowledge or belief to support its position that Coco Paving brought HL-8 for more than one driveway.
Town’s Position
[170] Kelly Stephens’ evidence was that the Town’s inspectors collected tickets from Coco Paving for HL-8 used on the road and recorded them in the Monthly Summaries for this item. The Town says that its quantity should be preferred over Network’s claimed amount, as there was doubt as to whether all the asphalt delivered by Coco Paving was in fact used for the road and not driveways.
Disposition
[171] Network relies upon the tickets provided by its subcontractor, Coco Paving Inc., and gave credit to the Town for one load which Coco advised was not utilized in the roadway. Kelly Stephens’ evidence that there remains a doubt about whether another load may have been used for a driveway is not supported by evidence. It was open to either party to call a representative from Coco to testify with respect to this item. No adverse inference may be drawn for a failure by Network to call such a witness.
[172] I find that Network has made out its claim for item E-11 on a balance of probabilities and it is allowed in the sum of $1,563.16.
E-13
Construct commercial asphalt driveway entrances (including 40 mm HL-3, 60 mm HL-8, 150 mm of 19 crusher run limestone and 300 Mm Granular “B” excavation
$6,868.49 ($6,855.96 for quantity difference + $12.53 for Payment shortfall)
$12.53
$6,855.96
[173] Item E-13 covers construction of commercial asphalt driveway entrances. The relevant specification is SP-18 which calls for the quantity to be determined by the field measurement of the total area of the driveways in square meters. The estimated quantity in the Quantity and Price Schedule was 3568 m². Network claims a quantity of 3405.84 m² whereas the Town’s quantity is 3274.55 m² for a difference of 131.29 m².
Network’s Position
[174] Network provided GPS calculations showing its quantity of 3405.84 m². Network states that the Town inspector Kelly Stephens was unable to point to any calculation that she conducted. Although Anthony Lazzara testified that the Town inspectors should have measured the driveway entrances and that the quantity would be in the field notes, he acknowledged that none of the field notes showed a quantity for E-13. He was unable to explain why.
Town’s Position
[175] The Town states that Kelly Stephens’ evidence was that she made the measurement using a measurement wheel and that she repeated the measurement several times. It submitted that Network provided no evidence to call into question the Town’s quantity.
Disposition
[176] Network’s calculations are supported by GPS data being 162.16 m² less than the estimate in the Quantity and Price Schedule. Kelly Stephens’ testified that she measured the driveway entrances with a measuring wheel and reviewed the measurements taken by the student inspectors and provided the information to Anthony Lazzara. Anthony Lazzara was unable to produce any field notes by which the measurements taken on behalf of the Town were recorded. The Town’s quantity position is not supported by any contemporaneous records.
[177] I find that Network has made out its claim for item E-13 on a balance of probabilities and it is allowed in the sum of $6,855.96
E-17
Supply, excavate for and place 100 mm sub-drains with HL8 aggregate/backfill material
$936
$0.00
$936
[178] E-17 relates to the supply of 100 mm sub-drains. The specification is SP-21, which provides that the quantity of this item is the linear meters measurement of the total length of the sub-drain installed. The estimated quantity in the Quantity and Price Schedule was 2412 m. Network claims a quantity of 2483 m whereas the Town’s quantity is 2405 m for a difference of 78 m.
Network’s Position
[179] Corey McPherson testified that Network’s quantity matched the length of the curb acknowledged and paid for by the Town since, as Lazzara, Stephens, McPherson and Don Medeiros all testified, the sub-drain ran approximately the length of the curb. Network submits that the Town presented no evidence in support of its position.
[180] Anthony Lazzara and Kelly Stephens each confirmed the reliability of Network’s calculation method. Network states that Paul Allen had no direct knowledge of the actual quantity supplied and gave no evidence of a “curb going around the corner” that could account for the 78 meter discrepancy between the parties’ positions.
Town’s Position
[181] The Town submits that Stephens testified that she carried out the measurement in the field and the sub- drain did not go for the entire length of the curb. Allen confirmed this, explaining that there was a length of curb going around a corner that did not require sub-drain. The Town states that the town’s field measurement should be preferred to Network’s calculation based on the length of the curb.
Disposition
[182] Network’s position is based on an assumption that the length of the sub-drain matched the length of the curb, rather than on an actual measurement of the length of the sub-drain. Kelly Stephens testified that she measured the sub-drain as installed.
[183] I find that Network has failed to make out its claim in respect of E-17 on a balance of probabilities and it is disallowed.
E-26
Tack coat
$3,706.40
$0.00
$3,706.40
[184] Item E-26 covers the placement of adhesive tack coat between layers of pavement. The specification is at SP-27, providing for measurement in square metres. The estimated quantity in the Quantity and Price Schedule was 24,750 m². Network claims a quantity of 31,180 m² whereas the Town’s quantity is 21,914 m² for a difference of 9266 m².
Network’s Position
[185] Network’s quantity was calculated by its subcontractor, Coco Paving, and was explained by issues with mud tracking that Network says the Town itself attributed to a third party. Corey McPherson attributed the need for application of a partial second coat of adhesive to mud tracking from a separate construction project.
[186] The Town admits that there is no evidence that Coco Paving or Network have attempted improperly to claim for any work delayed by rain. He points out that the Town has formally admitted that the “only dispute is whether Network can properly claim the tack coat also applied to the second coat of binder course.” Anthony Lazzara admitted that the field notes in evidence did not record any quantity for this item.
Town’s Position
[187] The Town’s position, based on Anthony Lazzara’s evidence, is that due to rain Coco Paving had to return to the project and reapply a certain area for which the Town should not have to pay. The cost of remedying the mistake in applying the tack coat in the face of rainy conditions should be borne by Network, not the Town.
Disposition
[188] I am satisfied on the basis of the evidence of Anthony Lazzara and Kelly Stephens that Network’s subcontractor, Coco Paving, re-attended to reapply tack coat to an area where it had been earlier applied, as a result of intervening rain.
[189] The timing of the application of tack coat in reference to the weather conditions is a “means and methods” determination to be carried out by Network and its subcontractor. There is no basis to suggest that the Town should be responsible for Coco Paving’s miscalculation in this respect.
[190] Network’s claim in respect of E-26 is therefore disallowed.
F-2b)
$96.40
$96.40
$0.00
[191] The Town has admitted Network’s claim for this item in the sum of $96.40.
F-2c)
$2,496
$2,496
$0.00
[192] The Town has admitted Network’s claim for this item in the sum of $2,496.
G-3
Street cleaning
$3,400 ($1,811 for Quantity difference + $1,589 for Payment Shortfall)
$1,589
$1,811
[193] Item G-3 covers the cleaning of mud and dust from the road during construction. The specification is at SP-39, providing for payment based upon hours. The estimated quantity in the Quantity and Price Schedule was 200 hours. Network claims a quantity of 142.50 hours whereas the Town’s quantity is 124.39 for a difference of 18.11 hours.
Network’s Position
[194] Network submits that its quantity is supported by Corey McPherson’s contemporaneous breakdown of Network’s cleaning work, together with all of the supporting invoices. Two instances of overtime pricing had been discussed with Anthony Lazzara in advance and he did not deny approving that over-time. Network says that Lazzara did not identify any invoices that were not properly included under G-3, notwithstanding his suggestion that Network’s claim under that item might have included some cleaning and preparation for paving work, and properly included in a separate pay item. Don Medeiros testified in reply that while Network did undertake pre-paving cleaning, it did not include any of that cleaning in G-3.
[195] Network states that Anthony Lazzara was unable to explain the Town’s quantity, nor to account for the fact that the Town’s field notes did not record it.
Town’s Position
[196] The Town states that there was evidence from Anthony Lazzara that there was a requirement to clean the road during the course of the paving operation and that street cleaning during that operation was not a separate pay item. The Town submits that there is no evidence presented by Network that should call into question the Town’s quantity.
Disposition
[197] Network substantiated its calculation of the hours spent on street cleaning with contemporaneous records. Anthony Lazzara and Kelly Stephens were unable to provide evidence of how the Town’s position was determined.
[198] I find that Network has made out its claim for item G-3 on a balance of probabilities and it is allowed in the sum of $1,811
Claims for Payment for Changes and Extra Work
[199] I turn now to Network’s claims for changes and extra work on the Project.
(a) Guiding Principles
[200] It is useful to review the principles guiding a consideration of when a contractor may be entitled to payment for performing “extras” to a contract.
[201] Whether a particular item of work is an extra or not must be determined by reference to the terms of the contract, the nature of the work, and the surrounding circumstances. The contractor will, therefore, be able to recover payment on a quantum meruit basis only if it has performed work for the owner in pursuit of a contract which changed so fundamentally that the payment provisions in the contract no longer have any application to the work actually performed. There would be an implied promise to pay what the work is reasonably worth (see McGrath v. Woodrow (1998), 2001 CanLII 24163 (ON CA), 40 C.L.R. (2d) 145 (Ont. Gen. Div.) at para. 56, quoting Hudson-Building Contracts (1996), paras. 4-27.
[202] When a contractor performs work or supplies materials not called for by the contract without instructions, express or implied, from the owner, or the consent of the owner, it is not entitled to charge for this additional work or materials as an "extra". However, when the contractor performs work or supplies materials not called for by the contract on the instructions, express or implied, of the owner, it is entitled to charge for additional work or materials as an "extra". What amounts to instructions from the owner depends on the circumstances relating to each item. If the owner, without giving definite instructions, knows that the contractor is doing extra work or supplying extra materials, and stands by and approves of what is being done and encourages the contractor to do it, that will amount to an implied instruction to the contractor, and the owner is liable (see Chittick v. Taylor, 1954 CanLII 492 (AB KB), 12 W.W.R. (N.S.) 653 (Alta. S.C.) at paras. 8-10).
[203] Despite the fact that a contract may require certain formalities in relation to requests for extras, where an owner has acquiesced in the provision of extras, it may be found to have made an implied promise to pay for them (see Colautti Construction Ltd. v. Ottawa (City) (1984), 1984 CanLII 1969 (ON CA), 7 C.L.R. 264 (Ont. C.A.) at para. 30). A provision in a contract requiring a written order as a condition precedent to payment for extra work may be waived by the owner's conduct or acquiescence, such as where the owner requests extras which he or she must, as a reasonable person, have realized would involve extra expense (see DIC Enterprises Ltd. v. Kosloski at para. 34 (quoting Goldsmith on Canadian Building Contracts at pp. 87-88) and para. 37).
(b) Individual Claims for Changes or Extras
Invoice
Description
Claimed Amount
Town Approval
Disputed Amount
109701
Extra Granular B for trench restoration
$22,727.14
$0.00
$22,727.14
[204] By Invoice 109701, Network claims for the use of Granular B type 2 for restoration on certain identified segments of the trench running along the length of Speers Road. It claims that the restoration detail on the contract drawings do not indicate any Granular B type 2 in these areas, whereas the specification required the use of Granular B type 2 for the road base. The invoice was for the cost to excavate and prepare for Granular placement before trench restoration paving and to supply, place and compact Granular B type 2 material.
Network’s Position
[205] Network submits that in order to prevent trench failures under traffic it was required to restore water main trenches in the road to the proper road construction specifications, which represented a needed departure from the trench restoration details in the drawings which were inconsistent with both the road construction drawings and the applicable specifications. The water main trench restoration details required Granular B type 1, whereas the details for road construction required the more stable Granular B type 2 material.
Town’s Position
[206] The Town submits that Network did not provide any expert evidence that the specifications for trench restoration were inadequate or incorrect and did not provide any evidence that the Town gave Network instructions to redo the trench restoration in a manner other than as set out in the drawings and specifications or agreed to pay for it.
Disposition
[207] On cross-examination Anthony Lazzara acknowledged that he had been mistaken in his examination-in-chief that the work set out in Invoice 109701 had not been performed by Network. In giving that evidence he mistakenly assumed that the invoice referred to restoration of lateral trenches rather than restoration of the trench running along the length of the road. He acknowledged on cross-examination that Network had performed the work and supplied the material set forth on the invoice and that if the work differed from what was specified on the drawings it would constitute an extra to the contract.
[208] The Town took no issue with respect to the calculations provided by Corey McPherson with respect to the quantity set out on Invoice 109701. I accept Network’s evidence that, from an examination of the details on Sheets 10 and 18 of the drawings, the material supplied by Network for the segments referred to differed from that specified for the trench restoration in order to conform to the applicable road construction specifications. No expert evidence was required in order to identify this difference. Based upon Mr. Lazzara’s acknowledgement, I allow the amount claimed in invoice 109701 as an extra in the sum of $22,727.14.
109702
Removing driveway ramps
$94,497.70
$0.00
$94,497.70
[209] By invoice 109702 Network seeks payment for what it characterized as extra work for repeated removal and reconstruction of temporary gravel ramps in order to provide driveway access to the businesses on Speers Road during the paving operations. The specification which relates to the maintenance of access to private driveways is under SP-12 – “Traffic Maintenance” which required the Contractor to “maintain access to driveways wherever possible. Driveways greater than 6.0 m in width shall have access maintained at all times. Construction shall be scheduled to allow temporary access to either half of the driveway. Such temporary access shall consist of a pad of well compacted, crushed aggregate placed to a minimum thickness of 100 mm.”
Network’s Position
[210] Network submits that traffic staging issues resulted from incomplete project design by the Town. It points out that Anthony Lazzara admitted that the Town was responsible for providing direction with respect to traffic management on the project and that it was required to determine new traffic staging during the course of the project. Anthony Lazzara set out “recommendations” in an email that he admitted would constitute a change to the scope of the contract if Network was instructed to proceed, and Paul Allen admitted that he sent Network an email to “please proceed” in accordance with Lazzara’s recommendation and that Network did so.
[211] Network states that one placement of ramps for the driveways would have been included under the contract, but the design flaw required repeated placement and removal to allow for paving. Neither Network nor the Town anticipated this and once Network finished working on the south side of Speers Road it became clear that there would not be enough room on the roadway to provide driveway access while also paving. It therefore became necessary for the Town to review the traffic staging, which would not have been necessary if the traffic management plan remained unchanged from the drawings.
[212] Although Network was required by the specification to provide traffic management, the scope of the traffic management that was ultimately required was materially different from what was reasonably expected at the time of tender.
Town’s Position
[213] The Town submits that there was no change in the traffic staging plan and that SP-12 was the appropriate specification to address the work set out in invoice 109702. It states that the great differences in elevation were clearly shown on the contract drawings which were not changed. Town argues that Network failed to anticipate the effort required to maintain driveways and underbid the traffic pay items in the contract, and that Network’s traffic difficulties were caused by its inexperienced project manager, Corey McPherson.
Disposition
[214] It is clear from the exchange of emails between June 17 and July 4, 2011 among Anthony Lazzara and Paul Allen of the Town and Don Medeiros of Network that the parties were addressing issues that had arisen with respect to traffic staging during the paving phase of the Project, including the placement of driveway access ramps. Mr. Lazzara’s email of June 17 referenced discussions on site involving himself, Don Medeiros, Paul Allen and the project engineer, Irfan Arab. From the context of this email it is evident that the drawings and specifications were inadequate to address the traffic staging issues that had arisen and that changes were required.
[215] Anthony Lazzara couched his email as constituting “recommendations for traffic staging” which were based on the discussions that are taken place on site. Don Medeiros responded on June 21, 2011 stating that he was reviewing Lazzara’s proposal for the additional staging to make sure that the proposal would work and would be examining what additional costs would be required to perform the work.
[216] On June 30, Don Medeiros advised Paul Allen that there will be additional cost to remove the ramps and proposed that it be completed and paid on a “time and material basis”. He also advised that there may also be additional traffic control measures to be implemented and paid for. He concluded by asking “can you please let me know if you are in agreement so that I can confirm the schedule” with its paving subcontractor. Later that day Paul Allen responded by stating “please proceed as noted below” referencing Don Medeiros’ email proposing that the additional cost to remove the ramps be paid for on a “time and material basis”.
[217] It is evident that Mr. Lazzara’s “recommendations” on traffic staging, including the additional work relating to the removal and placement of access ramps, were transformed into an instruction to perform the work, to be charged as an extra on a “time and materials basis.” This is consistent with the informal process adopted by the Town with respect to the giving of instructions for changes to the Contract.
[218] In the case of Cardinal Construction Ltd. v. Brockville (Municipality) [1984] O.J. No. 238 (H.C.J.), Henry, J. observed that tender documents must be prepared having in mind the average bidder, not the bidder who has special knowledge or experience and that the bidder is entitled and expected to rely on the tender documents as conveying the best information the engineer can give, and it is not good enough to provide information that is misleading, incomplete or inaccurate. The information should be clear and intelligible to all bidders.
[219] It is evident that the traffic control specification and related drawings were not sufficiently “clear and intelligible”, as the intervention of the Town was required in order to make “recommendations” to remedy issues that were not sufficiently addressed in the tender documents.
[220] The Town led no evidence supporting its claim that Network under-bid the traffic maintenance item in its tender. Specifically, it did not put into evidence what the competing tenderers submitted for this item. As such, the Town’s position on this is speculation.
[221] Mr. McPherson provided detailed particulars of how the quantities were determined for the invoice, and the Town took no issue with his calculation. I allow the amount claimed in invoice 109702 as an extra in the sum of $94,497.70.
109703
Extra traffic control
$15,463.60
$0.00
$15,463.60
[222] By invoice 109703, Network claims for extra labour, consisting of flagman, labourers and foreman, extra materials, consisting of signage as well as associated administration, overhead, traffic control and supervisor charges, in relation to the traffic staging issues on the Project.
Network’s position
[223] Network states that the Town’s “Construction Notice Update” changed the original drawings and specifications to make driveway access “right turn in, right turn out”, forcing Network to specially order non-typical signs and to place them at virtually every driveway on the project site. It references the email chain in which the Town instructed Network to proceed after Network warned of additional costs for additional traffic control measures.
Town’s Position
[224] The Town disputes Network’s claim for this item on the same basis as with respect to invoice 109702, namely that Network failed to anticipate the traffic control measures and underbid those items in the Contract, and that Network’s traffic difficulties were caused by its inexperienced project manager, McPherson.
Disposition
[225] For the same reasons set forth above with respect to invoice 109702, I find that the “Construction Notice Update” forming part of the “recommendations” issued by the Town in relation to the traffic control problems did change the scope of the traffic control measures in the original drawings and specifications. The Town did not take issue with the calculation of the additional labour and materials set forth on invoice 109703 and accordingly, I allow the amount claimed by Network in invoice 109703 in the sum of $15,463.60.
109705
Replace damaged curb returns
$6,016.67
$0.00
$6,016.67
[226] By invoice 109705, Network seeks to recover the cost of repairing the driveway curb returns damaged by right-turning trucks using the driveways on Speers Road.
Network’s Position
[227] Network submits that the Town, through Ms. Stephens and Mr. Lazzara, inspected the curb forms before they were poured with concrete and provided instructions on adjustments where needed. Network states that, apart from the directions then marked by the Town personnel on site, it carried out proper curb layout throughout the Project, enlisting a professional surveying company to do so using GPS technology.
[228] Network states that most of the curbs were able to be backfilled before any damage occurred. However, the concrete had a setting period during which time Network was not able to backfill without damaging the curb. The Town formally admitted that it lacked any record that Network failed to backfill curb returns after the initial damage occurred.
[229] Network points out that the Town made the decision to keep Speers Road operating throughout construction and the General Conditions to the Contract at GC 6.01.04 d) specifically provided that Network shall not be responsible for loss or damage that occurs as a result of “acts or omissions of the Owner…or others not under the control of the Contractor, but within the Working Area with the Owner’s permission”, which would include all traffic using the road.
Town’s Position
[230] The Town submits that Network should have utilized the orange and black safety barrels, called TC 54’s, around the curbs for protection. The obligation to protect the work throughout the course of construction was on Network. Network failed to protect the curb returns prior to backfilling, resulting in the damage, the cost for which should be borne by Network, not the Town. The Town also argues that Network did a poor job of laying out the curb radii resulting in the curbs becoming damaged because they were not installed properly in the first place.
Disposition
[231] Responsibility for damage to the work caused by the third parties is addressed in GC 6.01.04 d) which specifically provides that the Contractor shall not be responsible for loss or damage that occurs as a result of acts or omissions of “others not under the control of the contractor, but within the Working Area with the Owner’s permission.” It is clear that drivers utilizing Speers Road were within the working area with the Town’s permission. The Town was unable to point to any specification in the Contract requiring Network to place TC 54’s around the curbs prior to backfilling, nor did it lead evidence that this was standard practice or a custom of the trade. Moreover, the Town was unable to point to any connection between alleged poor lay-out of curb radii by Network and particular curbs which were damaged.
[232] It is evident that some level of damage to curb returns was an expected consequence of the Town’s decision to permit traffic on Speers Road as the work was in process and the Contract, by GC 6.01.04 d) allocated the risk of such damage to the Town, in the absence of a contractual breach or negligence by Network.
[233] The Town took no issue with respect to the quantification of the claim in invoice 109705. I therefore allow the amount claimed by Network in invoice 109705 in the sum of $6,016.67.
109706
Load, haul, spread stockpiled granular A
$13,458.01
$0.00
$13,458.01
[234] Network seeks payment by invoice 109706 for additional labour and equipment required to load, haul and spread granular A material from the stockpile produced by the temporary gravel ramps on the project site. As such, this invoice is related to invoice 109702.
Network’s Position
[235] Network says that it was required to transport and repurpose the large piles of granular A leftover after completion of the work of moving the temporary ramps around during paving, as referenced in invoice 109702.
[236] Network states that the work involved in the final removal of the stockpiled gravel ramps was different work arising out of the same traffic staging issues referred to in invoice 109702. The work involved in moving granular A for use in the ramping of the driveways was included in invoice 109702. The work referenced in invoice 109706 relates only to the final removal of the stockpiled granular A after the ramping work during paving was completed. At that time Network was left with a large stockpile of Granular A material which is needed to collect, transport and repurpose solely because of the traffic staging issues referenced in claim 109702.
[237] Mr. McPherson testified that he calculated the equipment and labour time on the basis of Network’s daily work records, utilizing standard labour and equipment rates addressed in other claims which were previously paid by the Town.
Town’s Position
[238] The Town submits that Network controlled the site and managed the work as it saw fit. There was no pay item for loading, hauling and spreading stockpiled Granular A, and there is no evidence that the Town’s employees instructed Network to do anything with respect to the stockpiled Granular A material.
Disposition
[239] In my view, the work represented by invoice 109706 was necessitated by the direction by the Town, mid-project, to vary the traffic staging plan by directing Network to carry out the recommendations developed by the Town in that respect, and as discussed above. It was foreseeable to the Town, in issuing that direction, that a stockpile of Granular A material would be left at the conclusion of the paving work that Network would have to deal with at an additional cost from that contemplated at the time of tender. I find that the way in which Network dealt with the stockpiled material was reasonable, and the Town was unable to point to any other methodology that Network could have utilized that would have resulted in a lower cost.
[240] The Town took no issue with respect to the calculation of the claim set forth in invoice 109706. I therefore allow the amount claimed by Network for this item in the sum of $13,450.01.
109709
Repair failing service crossings
$7,417.51
$0.00
$7,417.51
[241] Network, by invoice 109709, seeks payment for costs associated with preparing failing service crossings, sometimes referred to as lateral crossings, on Speers Road. Network originally claimed $15,721.98 for this item but reduced its claim to $7,417.51 prior to trial, by removing its claim for granular A and reducing its claim for HL-8 asphalt. Network says that it did this in order to avoid any potential double-counting or reliance on items not in evidence.
[242] The service crossings had been originally installed by Network in the winter of 2011 and had been topped with cold-mix asphalt. In June 2011, on instructions from the Town, Network attended to repair the service crossings by removing existing materials and replacing it with new granular and HL-8 asphalt, as the crossings were in dire need of repair as a result of deterioration by traffic.
Network’s Position
[243] Network states that, as testified to by Joe Medeiros, its foreman in relation to the water main and storm sewer work, that Anthony Lazzara consistently directed Network to place cold-mix on the service crossings during their original installation, notwithstanding that the specifications and drawings called for HL-8 (hot-mix) asphalt. The Town offered no evidence disputing that Mr. Lazzara gave this direction to deviate from the drawings. Indeed, Mr. Lazzara testified in his examination-in-chief in relation to the original installation of the service crossings (mistakenly in reference to Invoice 109701) that “we might have asked them to put cold-mix in there… I don’t recall.”
Town’s Position
[244] The Town states that the service trenches were in a constant need of repair. Network had finished the top of the trench restoration with cold-mix asphalt rather than hot-mix HL-8 during the winter or early spring months when the work was being done. The specification governing the work required HL-8 to be used as a topcoat. All of the Town’s witnesses gave evidence denying that they instructed Network to deviate from the specification by using cold-mix rather than hot-mix asphalt.
Disposition
[245] The Town’s position that “all of its witnesses” testified that they did not instruct Network to deviate from the specification through the use of cold-mix on the service crossings does not accord with the evidence at trial. Joe Medeiros testified, on behalf of Network, that whereas he took instruction from Les Dziadula of the Region in relation to the water main and sewer installations, he took instruction consistently from Anthony Lazzara in relation to the roadwork. His evidence was clear that Mr. Lazzara consistently directed him to utilize cold-mix to top off the service crossings. He considered himself bound by Mr. Lazzara’s directions in this respect regardless of what the drawings specified. Mr. Lazzara testified that he “might have” asked Network to put cold-mix in the service crossings. He did not dispute the evidence of Joe Medeiros in this respect.
[246] It is evident that Anthony Lazzara had the authority to instruct Network to deviate from the requirements of the drawings and that he exercised that authority. It was predictable that the use of cold-mix was a temporary measure only and that the service crossings would have to be redone by the removal and replacement of granular material and the placement of hot-mix HL-8 asphalt at a later stage in the project, at additional cost.
[247] Although Paul Allen testified that he found it “shocking” that Network would advance a claim for the repair of the service crossings when it had not installed them in accordance with the drawings and specifications in the first place, this was a conclusory statement. There is no evidence that Paul Allen was present when the service crossings were originally completed in the winter of 2011, and he could therefore offer no evidence on the nature of the instructions given by Anthony Lazzara to Joe Medeiros.
[248] The evidence indicated that Town inspectors were present throughout the Project, monitoring virtually all of Network’s activities. In the event that they observed Network deviating from the drawings and specifications on the original installation of the service crossings, without direction by the Town, it would be expected that the Town would have halted this work and directed Network to adhere to the drawings. The fact that this did not occur supports the evidence of Joe Medeiros that Anthony Lazzara directed the use of cold-mix asphalt and not HL-8 as specified, together with the evidence of Anthony Lazzara that he “could have” given that direction.
[249] The Town took no issue with the calculation of the claim in invoice 109709, as revised. I therefore allow Network’s claim for this item in the sum of $7,417.51.
109715
600,525,400 leads
$1,125.00
$1,125.00
$0.00
[250] The Town acknowledges the obligation to pay invoice 109715 in the sum of $1,125.
109716
Extend driveway removal
$21,245.53
$0.00
$21,245.53
[251] Network, by invoice 109716, seeks payment for the extra cost of removing asphalt and curb along the driveways on Speers Road. It bases this claim on the assertion that Town personnel instructed it, on site, to leave approximately 2 meters of existing curb and asphalt beyond what the drawings provided and then later instructed it to return and remove that curb and asphalt at increased cost.
Network’s Position
[252] Network submits that while excavating Speers Road, Network followed instructions given by Kelly Stephens to leave approximately 2 meters of existing asphalt and curb in front of the existing sidewalk and driveways on the north side, instead of simply replacing that curb and asphalt according to the drawings. The Town later instructed Network to remove the curb and asphalt that it had earlier instructed Network to leave. As a result of the Town’s instructions to leave the existing asphalt and curb, those curb return radii differed from the radii specified in the drawings. Network submits that the later removal took significantly greater time and effort than the original removal would have, because the road was then being used requiring extra traffic control measures and the use of smaller equipment.
Town’s Position
[253] The Town submits that Kelly Stephens did not give any instructions to Network, but rather she walked the site with Network’s foreman, Enrique Huerta, who marked with paint where the driveways should be cut. Kelly Stephens testified that this was necessary because Network failed to do the necessary construction layout required by SP-6 of the Contract, which made the contractor responsible for the proper setting out of the Work and for the correctness of the position, levels, dimensions and alignment of all parts of the Work.
Disposition
[254] It is not clear from the evidence that, as suggested by Don Medeiros in reply evidence, Network’s surveyor had conducted the proper layout of the driveway cuts by GPS, thereby eliminating the need for stakes, or if it had, that this had been communicated to the Town. Kelly Stephens was clear in her evidence that the only reason she walked the site with Enrique Huerta to mark the location of the driveway cuts was because Network had not conducted the proper layout. Mr. Huerta did not testify that Network had the layout conducted by its surveyor utilizing GPS nor that he told Kelly Stephens that it had done so. If the proper layout in accordance with the drawings had been completed, it would not have been necessary for Kelly Stephens to walk the site to assist in marking the location of the driveway cuts.
[255] Moreover, Don Medeiros did not testify in chief that the layout had been conducted by GPS. It was first raised in reply, and Kelly Stephens had not been cross-examined on that issue. I therefore place little weight on Don Medeiros’ testimony in that respect. SP-6 clearly placed responsibility for the construction layout on Network, as the contractor. I find that Network has not established its claim for payment of invoice 109716.
109717
Remove/replace damaged hydrant
$4,789.30
$0.00
$4,789.30
[256] Network seeks to recover, by invoice 109717, the cost of replacement of a hydrant which was damaged beyond repair by an unknown party after installation. The Town instructed Network to “take action” to deal with the damaged hydrant.
Network’s position
[257] Network submits that the Contract, by GC 6.01.04 d), relieved it from responsibility for loss or damage as a result of acts or omissions of the Owner or others not under the control of the Contractor, but within the working area with the Owner’s permission. Following receipt of the Town’s instructions Network replaced the hydrant, which involved purchasing, excavating for and connecting the new hydrant. Network states that its invoice set forth the standard labour and equipment rates addressed in other claims which had been previously paid by the Town and the material mark-up corresponded with the time and materials provision of the Contract.
Town’s Position
[258] The Town submits that until the Project was complete Network was responsible to protect the hydrant and should have used TC 54’s to do so.
Disposition
[259] Anthony Lazzara’s testimony that, until assumption of the Project by the Town, Network was the “owner” and was therefore responsible to fix the damage to the hydrant at its own cost was a statement of a legal position, not factual evidence. The Town did not point to any provision in the Contract in support of this proposition.
[260] GC 6.01.04 d) places the risk of damage by third persons permitted by the Contractor within the Working Area on the Owner, in the absence of an act or omission by the Contractor. As with invoice 109705 relating to replacement of damaged curb returns, the Town did not lead evidence that the placement of TC 54’s around hydrants after installation was standard practice or a custom of the trade. Indeed there was no evidence that the hydrant in question was more susceptible to damage by a third party prior to assumption by the Town than it would have been after assumption.
[261] The Town took no issue with respect to calculation of invoice 109717. I therefore allow it in the sum of $4,789.30.
109718
Rebuild water valve chambers
$2,327.99
$2,327.99
$0.00
[262] The Town acknowledges the obligation to pay invoice 109718 in the sum of $2,327.99.
109719
Extra CB with swale
$1,713.08
$0.00
$1,713.08
[263] Network seeks payment for the cost incurred to install an extra catch basin, with lead and swale and filling a ditch. The Town acknowledges that it instructed Network to complete this work as an extra on a time and materials basis, but disputes the amount claimed for it. The Town has paid the sum of $4,603.92 and disputes the balance claimed by Network in the sum of $1,713.08.
Network’s position
[264] Network produced its daily work records for the work, setting out the labour and equipment rates and a material mark-up based on the contract. Corey McPherson acknowledged that 9 hours for installing a catch basin would have been excessive “in a field without live traffic” but it was not excessive when working in a ditch with small equipment on a heavily travelled road.
Town’s Position
[265] Anthony Lazzara gave evidence that the amount claimed by Network for this item was excessive, and the Town submits that his evidence as to a fair price should be preferred over that of Corey McPherson, given the discrepancy in their relative years of experience.
Disposition
[266] Under the Contract, the Town had the option of requesting Network to provide a quotation for a stipulated price for the completion of this extra, and if it was prepared to have Network proceed, to issue a Change Order based on an agreed price. The Town chose not to proceed on this basis, but rather instructed Network to perform the work on a time and materials basis. The Town now seeks to impose a stipulated price after the fact, based upon Anthony Lazzara’s opinion as to what would be considered “reasonable.” Had the Town proceeded on fixed price basis for this extra, it could have sought to negotiate the price in advance in order to reduce its risk. It chose not to do so. Network has produced its records of the labour, materials and equipment it utilized to complete the work. There is no evidence that the time as recorded was not spent, nor that there was duplicative work performed as a result of deficiencies in the workmanship.
[267] Network’s claim in invoice 109719 is therefore allowed in the sum of $1,713.08.
109721
Saw cut centreline of Speers Road
$3,634.80
$0.00
$3,634.80
[268] Network seeks by invoice 109721 the cost to saw cut a longitudinal asphalt joint along the centre of Speers Road which it says was required due to damage that occurred at the edge of the new topcoat of asphalt. The saw cut was required to achieve a clean edge against which to pave the other side of Speers Road.
Network’s Position
[269] Network submits that there was no protected buffer zone between the roadwork operation on one side of Speers Road and the two-way traffic on the other side. The lack of a buffer zone led to excessive damage to the edge of the new asphalt being placed. A “step joint” might theoretically have avoided the extra work in invoice 109721, but it still would have required a wider buffer zone which the Town’s staging plan did not provide. Network asserts that it was not responsible for the damage to the asphalt since it was caused by traffic that was on-site with the Town’s permission.
[270] Network submits that there was no relevant paving item in the specifications calling for a saw cut joint. The specification governing E-11 and E-12 provided only that the price would include “step joints” which were impossible on the Town’s staging plan.
Position of the Town
[271] The Town submits that a saw cut was required to provide a clean edge against which to pave the other side of the road and the cost of performing the saw cut was included as part of the paving items. Moreover, its inspector, Kelly Stephens, sent Network a copy of the OPSS specification which requires a clean cut. Network says that the saw cut was a requirement, not an extra.
Disposition
[272] Network’s claim that it was required to perform the saw cut is based upon its allegation that the Town’s traffic staging plan in the drawings did not provide a protected buffer zone. However, I am not satisfied that the lack of a protected buffer zone would not have been apparent to an experienced contractor at the time of tender. On the basis of the drawings, Network should be taken to have been aware that traffic damage to the new asphalt on one side of the road was probable and that the provision of a clean joint would have been required in any event as part of the paving operation. Although a step joint was specifically provided for in specifications, Network’s evidence was that it too would not have been possible due to the lack of a buffer zone. The need for a saw cut to the joint should have been fully anticipated by Network at the time of tender. Moreover, on Network’s own evidence, it was relieved of providing a step joint, which was stipulated. Whether to provide a step joint or a saw cut in order to provide a clean edge for the paving on the two sides of the road was a “means and methods” choice for the Contractor.
[273] I therefore find that Network has not made out its claim for payment of invoice 109721.
109734
Partial asphalt milling
$2,369.30
$0.00
$2,369.30
[274] Network, by invoice 109734, seeks payment of the extra cost of partial asphalt milling, on a unit basis, due to a reduction in the quantity of asphalt milling directed by the Town
[275] The Town directed a change from the drawings which substantially decreased the milling area and increased the cost, per unit, charged to Network due to the subcontractor’s overhead and fixed costs. The resolution of this item involves an interpretation of the interplay between two provisions of the contract, namely, GC 8.01.02.01 b) and SPG-27.
[276] GC 8.01.02.01 entitled “Variations In Tender Quantities” provides, in part, as follows:
Where it appears that the quantity of Work to be done or Material to be supplied or both by the Contractor under a unit price tender item may exceed or be less than the tender quantity, the Contractor shall proceed to do the Work or supply the Material or both required to complete the tender item and payment shall be made for the actual amount of Work done or Material supplied or both at the unit prices stated in the tender except as provided below:
a) (omitted as not applicable)
b) in the case of a Major Item where the quantity of Work performed or Material supplied or both by the Contractor is less than 85% of the tender quantity, the Contractor may make a written request to negotiate for the portion of the actual overheads and fixed costs applicable to the amount of the underrun in excess of 15% of the tender quantity…
[277] Pursuant to GC 1.04, a “Major Item” is defined as any tender item that has a value, calculated on the basis of its actual or estimated tender quantity, whichever is the larger, multiplied by its tender unit price, which is equal or greater than the lesser of (a) $100,000 or (b) 5% of the total tender value…
[278] SPG-27 entitled “Estimated Quantities” provides as follows:
Section GC8.01.02 of the General Conditions of contract referring to the tender quantities for major items being within 15% of the actual work done, shall not apply to this contract.
Network’s Position
[279] Network submits that the effect of SPG-27 was to remove the restriction in the application of GC 8.01.02 to “Major Items”, thereby expanding the scope of GC 8.01.02 2 to all quantity variations exceeding 15% of the estimate, whether or not they were “Major Items.”
Town’s Position
[280] The Town did not address the effect of SPG-27 in its submissions. However, Paul Allen, in testimony, advanced the position that SPG-27 removed the Contractor’s right to adjust prices irrespective of whether or not it involved a “Major Item.”
[281] The Town relies solely on GC 8.01.02, submitting that if there is a variation in tender quantities, the Contractor gets paid at the unit rates for the actual amount of the work done and materials supplied, unless the item is a “Major Item”. The asphalt milling did not fall within the definition of “Major Item” and therefore the exceptions to GC 8.01.02 do not apply and Network is not entitled to an adjustment as a consequence of the reduction in the quantity.
Disposition
[282] The meaning and effect of SPG-27 is far from clear. If the phrase “referring to the tender quantities for major items being within 15% of the actual work done” is intended to be simply descriptive of what GC 8.01.02 represents, the effect would be to eliminate GC 8.01.02 altogether. It is unlikely that this was the intention as it would have the effect of eliminating the default position stipulating that, where there are variations from the tender quantity, payment shall be made for the actual amount of work done or materials supplied at the unit prices stated in the tender. The Contract would then be silent with respect to payment in the event of variation from the tender quantities, which would be a commercially absurd result. Moreover, if eliminating GC 8.01.02 in its entirety had been the intention, it would be expected that a comma would have been placed between the words “contract” and “referring.”
[283] I agree with Network’s position that SPG-27 is ambiguous. It is apparent that it was intended that some aspect of GC8.01.02 was “not to apply to this contract.” However it is unclear whether the reference to “Major Items” was intended to not apply, or the requirement that, in respect of Major Items, the variation be not less than 15% of the tender quantity was intended to not apply. The former interpretation would favour Network by removing the requirement that a variation in quantity relate to a “Major Item,” whereas the latter interpretation would favour the Town.
[284] The application of the contra preferentem principle would suggest that the ambiguity should be resolved against the Town’s interest. I accept the argument of Network that, particularly in respect of changes to widely used standard contractual terms, such as the OPS General Conditions which are intended to provide consistent, standard and balanced terms and conditions for use throughout the Province, an Owner seeking to deviate from those standards in a way that may be prejudicial to the Contractor, ought to do so explicitly and clearly.
[285] Network’s claim in invoice number 109734, the sum of $2,369.30, is therefore allowed.
Summary
[286] The following is a summary of the amounts owing to Network by the Town on the basis of the findings set forth above, excluding HST:
(a) Claims for Unpaid Quantities of Unit-Price Line Items
ITEM AMOUNT
A-6 $ 2,472.00
B-21 $ 24,655.50
D-7 $ 17,400.00
D-8 $ 12,925.00
D-10 0
E-2 $ 11,574.14
E-7 $ 11,655.00
E-8 $144,452.55
E-9 $ 22,039.13
E-10 $ 52,506.65
E-11 $ 1,563.16
E-13 $ 6,855.96
E-17 0
E-26 0
F-2 (c) $ 2,496.00
G-3 $ 1,811.00
TOTAL $312,406.09
Individual Claims for Changes or Extras
ITEM AMOUNT
109701 $ 22,727.14
109702 $ 94,497.70
109703 $ 15,463.00
109705 $ 6,016.67
109706 $ 13,450.01
109709 $ 7,417.15
109715 $ 1,125.00
109716 0
109717 $ 4,789.30
109718 $ 2,327.99
109719 $ 1,713.08
109721 0
109734 $ 2,369.30
TOTAL $171,896.34
(c) Additional Claims Advanced during Litigation
ITEM
DESCRIPTION
AMOUNT
Concrete encase lead
0
Connection to existing lead pipe
0
Extended duration costs
0
Loss of productivity over and above extended duration
0
Additional administration and consulting fees
0
Additional bonding and insurance
0
TOTAL
0
[287] The total found to be owing by the Town to Network, including HST, is as follows:
Claims for Unpaid Quantities of Unit-Price Line Items $312,406.09
(a) Individual Claims for Changes or Extras $171,896.34
(b) Additional Claims Advanced during Litigation 0
HST @ 13% $ 62,959.32
TOTAL $547,261.75
Pre-judgment Interest
[288] The parties did not address the question of pre-judgment interest in their written or oral submissions.
[289] In the Amended Statement of Claim the Network claims prejudgment and post-judgment interest at the rate of interest determined under the Financial Administration Act, or, in the alternative, in accordance with sections 128 and 129 of the Courts of Justice Act.
[290] Network made no submissions respecting the application of the Financial Administration Act, R.S.O. 1990, c. F.12 and must therefore be considered to have abandoned any intention to rely upon it.
[291] No submissions were made with respect to applicable rate or the appropriate commencement date to be utilized for the calculation of pre-judgment interest under the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended.
[292] The action was commenced on April 5, 2012. The applicable rate of interest for actions commenced in the second quarter of 2012 is 1.3%. In the absence of any submissions by the parties, it appears to be appropriate that pre-judgment interest begin to run from October 30, 2011, being 30 days after the date certified as the date of substantial completion of the Contract, namely September 30, 2011.
Disposition
[293] It is ordered and adjudged that the defendant, The Corporation of the Town of Oakville, shall pay to the plaintiff, Network Site Services Ltd., the sum of $547,261.75 plus pre-judgment interest calculated thereon at the rate of 1.3% per annum pursuant to the Courts of Justice Act commencing on October 30, 2011.
Costs
[294] The parties are encouraged to agree upon costs. If they are unable to do so, the plaintiff, Network Site Services Ltd., may make written submissions as to costs within twenty-one (21) days of the release of these Reasons for Judgment. The defendant, The Corporation of the Town of Oakville, has fourteen (14) days after receipt of the plaintiff’s submissions to respond. All such written submissions shall not exceed five (5) double-spaced pages, exclusive of Costs Outlines or Bills of Costs, Offers to Settle and Authorities, and are to be forwarded to me at my chambers at 85 Frederick Street, 7th Floor, Kitchener, Ontario N2H 0A7. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs as between themselves.
[295] The parties may write to me jointly to address any calculation errors in these Reasons for Judgment.
D.A. Broad
Released: May 8, 2018
v. TOWN OF OAKVILLE, 2018 ONSC 2599
COURT FILE NO.: C-321-12
DATE: 2018/05/08
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
NETWORK SITE SERVICES LTD.
- and -
THE CORPORATION OF THE TOWN
OF OAKVILLE
REASONS FOR JUDGMENT
D.A. Broad
Released: May 8, 2018