COURT FILE NO.: CV-13-472439

DATE: August 16, 2019

ONTARIO

SUPERIOR COURT OF JUSTICE

IN THE MATTER OF the Construction Act, R.S.O. 1990, c.C.30

BETWEEN:

ABCO ONE CORPORATION

Plaintiff

Angela Assuras, for the plaintiff,

Tel.: 416-213-1225,

Fax: 416-213-1251.

• and -

Christian R. Riveros, for Canada-Wide Reinforcing Steel Co.

Tel.: 416-926-9474

Fax: 416-926-9483

CITY OF TORONTO, TORONTO TRANSIT COMMISSION, and POMERLEAU INC.

Karen Groulx for Pomerleau Inc.

Tel.: 416-975-0002,

Fax: 416-975-8002

Defendants

HEARD: October 2, 3, 4, 5, 9, 10, 11, 12, 31, November 1, 2, 6, 7, 8, 9, 13, 14, 15, 20, December 17, 2019 and January 8, 9, 11, and February 21, 2019.

Master C. Wiebe

AMENDED REASONS FOR JUDGMENT

I. INTRODUCTION

[1] The project in question was the construction of the Toronto Transit Commission (“TTC”) Ashbridges Bay Maintenance and Storage Facility at 1165 Lakeshore Blvd. East, Toronto (“the Project”). Pomerleau Inc. (“Pomerleau”) was awarded the general contract for the Project on April 12, 2012. Pomerleau subcontracted the formwork to ABCO One Corporation (“ABCO”). ABCO obtained rebar from Canada-Wide Reinforcing Steel Co. (“CW”). Pomerleau terminated ABCO’s subcontract in November, 2012. On November 7, 2012 ABCO registered a claim for lien in the amount of $1,581,508. On January 22, 2013 ABCO commenced this action purporting to perfect its lien and added a claim of $1,695,000 in damages as against Pomerleau. On November 16, 2012 CW registered a claim for lien of $304,905.98. On December 14, 2012 Pomerleau obtained an order vacating the ABCO and CW claims for lien by posting lien bond security.

[2] On December 2, 2014 Pomerleau defended the ABCO action and asserted a counterclaim of $5,620,008.86. CW perfected its lien. The lien actions on this improvement were referred to Master Albert. On December 15, 2015 Master Albert issued a lien and civil judgment in favour of CW as against ABCO in the total amount of $304,905.98 plus prejudgment interest of $8,253.34 and costs of $19,051.30.

[3] Master Albert retired in October, 2018, and I assumed carriage of the reference. What remains to be determined are the ABCO claims against Pomerleau, the Pomerleau claims against ABCO, and the CW claim for holdback as against Pomerleau.

II. BACKGROUND

[4] I begin with a summary of the facts of this case that are undisputed.

[5] At Pomerleau’s invitation in December 2011, ABCO submitted several bids for various aspects of the concrete scope. On March 28, 2012, ABCO submitted an all-inclusive bid for the concrete scope in the amount of $9,632,469. Pomerleau examined concrete work ABCO had done on a railway station in another project, and was satisfied. Pomerleau asked ABCO to reduce its bid to $9.3 million, which it did.

[6] Pomerleau notified ABCO on April 12, 2012 that it had been awarded the concrete subcontract. Pomerleau then issued a contract award letter to ABCO on April 23, 2012. There was negotiation, and Pomerleau sent a revised form of that letter on May 24, 2012. Finally, on June 5, 2012, Pomerleau and ABCO executed the contract award letter requiring that ABCO do the concrete work for $9.3 million plus HST. The letter had several terms.

[7] Pomerleau provided schedules for the Project and ABCO’s work starting on March 23, 2012. An approved baseline schedule dated July 9, 2012 was provided to ABCO. Included in these schedules were two week look-ahead schedules. ABCO prepared submittals for approval.

[8] On June 25, 2012 ABCO delivered Billing Certificate #1 in the amount of $184,522.65 for June work. It purported to be for preparation and mobilization. Pomerleau reduced it to $65,835.64 (tax inclusive). ABCO issued another Billing Certificate #1 this time for June and July work in that amount, and rendered an invoice accordingly on July 23, 2012. That invoice was paid on August 24, 2012. Pomerleau’s payment certificates for June and July, 2012 approved by TTC showed nothing for the concrete scope.

[9] On July 19, 2012 Pomerleau instructed ABCO to get ready to mobilize with a start date of July 30, 2012. ABCO mobilized on July 29, 2012. The first work was caisson drilling.

[10] On August 23, 2012 ABCO delivered Billing Certificate #2 for August work in the amount of $351,847.22. It purported to be for preparation, mobilization, caissons, duct banks and substation. Pomerleau reduced the bill to $108,734.96. ABCO rendered an invoice for this reduced amount on August 25, 2012. Pomerleau’s own payment certificate for August, 2012 as approved by TTC showed only $12,255 for the concrete scope.

[11] On August 23, 2012 Pomerleau met with ABCO on site and expressed disappointment with ABCO’s performance. ABCO advised it had financial issues.

[12] Pomerleau issued deficiency notices to ABCO. Some were corrected by ABCO. Two significant ones lingered throughout: ABCO located joints in the concrete pours for the caissons without getting TTC approval; ABCO drilled four F1 caissons instead of F2 caissons.

[13] On September 17, 2012 Pomerleau and ABCO met again. Minutes were taken. Pomerleau expressed deep dissatisfaction with ABCO’s performance. ABCO advised that it was facing bankruptcy in one month and asked that Pomerleau support it with “cash flow” or take over ABCO’s scope. After the meeting, Pomerleau agreed to take over the ABCO formwork and pay certain suppliers, leaving ABCO with the rebar, which ABCO stated it could support for up to one month.

[14] With ABCO’s approval, Pomerleau paid two cheques for supplier invoices, one to CW in the amount of $74,404.85 on September 21, 2012 and the other to ABCO’s drilling company, Strong Foundation Inc. (“SFI”), in the amount of $86,856.99 on September 26, 2012. It applied these payments in full satisfaction of ABCO Billing Certificate #2 leaving an excess balance it applied to the next billing certificate.

[15] On September 19, 2012 ABCO delivered Billing Certificate #3 for September work in the amount of $828,045.08. ABCO claimed for caissons, duct banks and the substation. On the same day it delivered an invoice for $644,915.84. On October 17, 2012 Pomerleau reduced the bill to $176,698.44 for the caisson work and the substation. A revised invoice was not delivered. The invoice was not paid. Pomerleau’s own payment certificate approved by TTC for September showed a total of $365,807 worth of work in ABCO’s scope.

[16] Pomerleau sent ABCO default notices. There was a default notice on October 4, 2012 concerning ironworkers not being a part of Local 721 as required. There was a default notice on October 19, 2012 concerning ABCO’s failure to pay union remittances. Pomerleau ended up paying ABCO’s union remittances to Local 721 and Local 27.

[17] ABCO eventually prepared Billing Certificate #4 for October work in the amount of $1,061,387.01. ABCO prepared an invoice for $233,341.94 dated October 19, 2012. It was not paid. These documents were delivered during the litigation. Pomerleau’s own payment certificate for October approved by TTC shows a total of $517,157 worth of work in ABCO’s scope. TTC did not approve payment for caisson and light pole foundation work due to the ongoing joint issue in ABCO’s caissons.

[18] On October 23, 2012 Pomerleau and ABCO met again. ABCO surreptitiously recorded the meeting. Pomerleau again expressed deep disappointment with ABCO’s performance. ABCO complained about Pomerleau’s reductions to the ABCO progress draws.

[19] On October 29, 2012 Pomerleau advised ABCO of its failure to provide submittals as required and the absence of rebar drawings for the oil and grit separators.

[20] On October 25, 2012 ABCO sent a letter demanding payment of $317,790.63 on Billing Certificate #2 and stating that the payments received to date would not sustain ABCO. It acknowledged that Billing Certificate #3 was due on November 10, 2012. On October 30, 2012 ABCO sent a follow-up letter advising of its financial instability from the start of the project and referring to promises it stated Pomerleau made at the outset of the work that Pomerleau would make payments every two weeks and give other financial support. It reiterated the demand for $317,790.63. On October 31, 2012 Pomerleau responded with a letter denying the alleged promises and outlining in detail that it had paid ABCO to date in accordance with the contract.

[21] There was then an exchange of emails on October 31, 2012 concerning the scheduling of ABCO’s rebar crew. Pomerleau ended the exchange by demanding that the crew resume on November 1, 2012 failing which ABCO would be in default and liable for contract termination.

[22] On November 2, 2012, in a letter marked “without prejudice,” Pomerleau terminated the ABCO contract. It referred to several alleged failures by ABCO: failure to pay workers and suppliers; failure to maintain safe conditions and quality; failure to provide project management services; failure to deliver submittals in a timely way; delay.

[23] On November 7, 2012 ABCO registered its claim for lien. On November 16, 2012 CW registered its claim for lien. On December 14, 2012, Pomerleau had both claims for lien vacated by posting lien bond security for them pursuant to the order of Master MacLeod as he then was.

[24] After this termination, Pomerleau completed ABCO’s scope using its own forces. It claims that it incurred over $26 million costs to do so. Its counterclaim is for cost overruns and back-charges.

[25] CW obtained the judgment of reference from Justice Pollak in CW’s lien action, CV-13-471940, on June 4, 2013. Master Albert issued the order for trial on August 28, 2013. The first hearing for directions was conducted by Master Albert on October 28, 2013. By that time, not only had ABCO and CW registered claims for lien and commenced lien actions, but so had SFI (lien claim of $78,960) and Volvo Rents, a Division of Volvo Group Canada Inc. (“Volvo”) (lien claim of $18,912.56). Pomerleau posted security for all of these additional claims for lien by order of Master MacLeod dated February 12, 2013.

[26] Master Albert conducted further hearings for direction on March 17, 2014 and October 27, 2014. On motions heard on December 15, 2014, Master Albert granted a summary judgment in favour of CW as described above, and a summary non-lien judgment in favour of SFI in the amount of $97,385.98 plus interest and costs. SFI admitted that its lien had expired. Therefore, SFI did not appear at the trial hearing as it is not entitled to share in the posted security.

[27] At the next hearing for directions on June 22, 2015, Master Albert ordered that Volvo declare its intention to proceed with its lien claim. It failed to do so. Its lien claim is by order deemed abandoned. Master Albert conducted further hearings for direction on March 21, 2016, September 19, 2016, February 28, 2017 and September 25, 2017. The reference was then transferred to me, and I conducted trial management conferences on November 2, 2017, December 12, 2017 (when I scheduled the trial hearing), August 20, 2018 and September 20, 2018. The trial hearing commenced October 2, 2018 and took 24 days ending February 21, 2019. I conducted a final trial management conference on December 18, 2018.

III. ISSUES

[28] Based on the evidence and submissions, I believe that the following issues are the ones to be determined:

a) What was the contract between ABCO and Pomerleau?

b) Did Pomerleau breach the payment terms of the contract?

c) Did Pomerleau terminate the contract with justification?

d) Did Pomerleau breach the duty of good faith?

e) If the contract termination was justified, what are Pomerleau’s damages?

f) What is the result?

g) What is CW’s holdback entitlement?

IV. WITNESSES

[29] Before I analyze the issues, I will comment on the credibility of the witnesses.

[30] ABCO called as its main witness its chief estimator on the project, Ismael Conge. His evidence in chief took much longer than originally scheduled. Mr. Conge is not an engineer and did not at the time hold a certificate as a quantity surveyor. Yet, he was put in charge of preparing the ABCO estimate, billings and the eventual ABCO lien amount. Indeed, in early October, 2012 he was elevated to the position of ABCO Project Coordinator. He admitted that the billings contained glaring errors, such as the inclusion of previous billings as current obligations. Despite these glimpses of condor, in cross-examination Mr. Conge was often evasive, argumentative, calculating and indeed arrogant. For instance, he referred to the specifications as only “guidelines.” He dismissed the safety requirements of the contract as a “waste of time.” He said he could not remember receiving the July 9, 2012 master schedule that was circulated to all parties. He asserted that winter protection was not required in ABCO’s scope, but then grudgingly admitted that it was and that it was missed. He insisted on the dubious position that the ABCO water pumps were there only for groundwater, not rain water. He brushed off observations of ABCO’s site personnel, Nazar Abid and Frank Coleman, that conflicted with his opinion, calling them “their opinion.” Contrary to the evidential record, he insisted that ABCO was not financially unstable and that all its financial troubles stemmed from Pomerleau’s alleged non-payment. I note that Mr. Conge claimed that Peri authorized the transfer of its forms from other projects to the Project when the Peri evidence showed that it was not. I had trouble giving Mr. Conge much credibility.

[31] ABCO called as a key witness its principal, Bogdan Tkach. He also seemed evasive and lacking in corroboration. For instance, when asked in cross-examination about the requirement in the contract to provide engineer stamps on drawings, he said that he “was not sure” and that we should “ask Mr. Conge.” Mr. Tkach stated several times that he could not remember glaring details, such as the master schedule, and stated that we should consult other witnesses, primarily Mr. Conge. Surprisingly he said this was the case with progress billings, which I found difficult to accept since billings are critical to a company’s functioning. Most importantly though, Mr. Tkach’s key evidence on the critical financial issue lacked corroboration. He insisted that he obtained Mr. Parent’s commitment at the outset to have Pomerleau pay ABCO every two weeks and provide other “financial support” regardless of the wording of the contract. There was no document or other evidence that even mentioned such support prior to the September 17, 2012 meeting. Given the terms of the contract, I would have thought that Mr. Tkach would have documented such a critical undertaking by Pomerleau. I also note that Mr. Tkach also asserted that Peri authorized the transfer of its forms from other projects to the TTC project when the Peri evidence showed that it was not. I, therefore, also found Mr. Tkach lacking in credibility.

[32] ABCO’s other “management” witness was Mr. Tomachevich, who described himself as the one responsible for “administration and bookkeeping.” He was called primarily to enter the tape of the October 23, 2012 meeting he took on his cellphone. He also testified about an alleged failure in the ABCO computer’s backup system, but it was not clear whether and, if so, to what extent this issue was relevant. I found this evidence of marginal significance.

[33] ABCO called as an expert Ali Farahzadi, a “senior project manager,” to opine on the validity of certain Pomerleau back-charges. Mr. Farahzadi’s credibility was undermined when it became clear no sooner than in cross-examination as to what documents he had relied upon in preparing his report and as to the fact that Ms. Assuras had heavily selected the tender drawings and specifications he examined. This significantly undermined Mr. Farahzadi’s credibility. At one point, Mr. Farahzadi even acknowledged that the drawings he had not examined contained enough information for ABCO to locate the baseplate elevations for caisson installation, which contradicted his report. He also missed the requirement in the specifications requiring TTC approval for the construction joints not identified in the drawings. His points on safety and the cage welding were of some import. In the end, Mr. Farahzadi as a whole came across more as an advocate than as an impartial expert. His evidence also was of marginal importance.

[34] ABCO called its foreman, Frank Coleman. He was one of the most credible of the ABCO witnesses. He made frank statements against the interest of ABCO. He stated that Mr. Conge avoided decisions and did not act as a project manager, that ABCO did not have a safety representative or schedules, that the Peri forms came from other projects, that material was constantly missing and that his crews was inexperienced and inadequate. On the other hand, he was candid in his views of Pomerleau as well, criticizing them for not sequencing forming efficiently. He confirmed that Pomerleau asked him to start copying them with his emails to ABCO. Mr. Coleman came across as honest.

[35] ABCO called Frank Campbell, the TTC Site Superintendent. His evidence focused on the Pomerleau certified progress draws, change order applications, the construction joint and quality control. He gave his evidence in a straight forward and believable manner.

[36] ABCO called several of its subcontractors and suppliers. There was Dipak Zinzuwadia, the rebar detailer. There was Scott Teron of Volvo, the equipment renter. There was Leonardo Triolo of CW, the rebar supplier. There was Kevin O’Neil of SFI, the caisson driller. All of these witnesses had a common feature. They or their companies all have unpaid ABCO accounts concerning this project and were to varying degrees looking to this action to recover these debts. That means that they all had an interest to some degree in the outcome of this case, which detracted from their credibility. On the other hand, their evidence was on largely uncontested matters and of limited scope, namely the timing, quantity and cost of their supply.

[37] There was also Donna Blaschuk, Account Manager for Peri Formwork Systems Inc. (“Peri”), the form supplier. Her evidence was different. She stated that Peri never billed ABCO in relation to this project, as Peri was not advised until December, 2012 that its forms had been moved by ABCO from the Millhaven project to the TTC site. She came across as a credible witness, as she admitted to Peri mistakes, such as Peri providing ABCO with some engineer stamped drawings when there was no contract with ABCO for the TTC project and when there was a block on the ABCO account after April, 2012. She admitted that Peri eventually entered into a contract with Pomerleau. I declared Ms. Balschuk a hostile witness to ABCO, but her evidence and credibility remained unshaken in cross-examination.

[38] Pomerleau’s witnesses were as a whole more credible. There was Claude Parent, the Vice President of the company and the one responsible for the company’s expansion in 2012 into the Greater Toronto Area (“GTA”). The Project was Pomerleau’s first of this size in the GTA. Mr. Parent is a licensed professional engineer and has considerable experience with large commercial projects like this. His involvement was more in the contract negotiation and less in contract administration. His critical evidence concerned his verbal discussions with Mr. Tkach about ABCO’s contract, financial status and payment. He admitted that he asked Mr. Tkach about bonding, but that all Mr. Tkach said was that ABCO would find bonding “difficult” as he had recently lost a partner. Mr. Parent said that this was sufficient for him as subcontractor bonding was not a requirement of the general contract and was not a test of financial stability. He denied promising to pay ABCO every two weeks. He insisted that Pomerleau did due diligence work on ABCO as it had used ABCO on a small rebar contract in 2012 and had seen ABCO’s finished formwork on a small railway project. This all makes sense to me. With its lack of experience in the GTA, Pomerleau would naturally favour solvent trades it had some familiarity with, but not to the point of deviating from strict contractual terms about payment.

[39] Michael Faustini was Pomerleau’s primary witness. He is a professional engineer and was the Project Manager for the TTC project. He was present during the entirety of the trial hearing and was the last witness, a fact which I bore in mind. He remains an employee of Pomerleau, which I also bore in mind. Nevertheless, I found Mr. Faustini measured, articulate and careful in his evidence. He gave evidence concerning the ABCO billing certificates, ABCO’s performance, the critical meetings with ABCO, the contract termination and the Pomerleau damages claim. He conceded when he did not have knowledge of facts. For instance, he did not recall the August 23, 2012 meeting. He was careful to support his evidence with corroboration. For instance, his recollection of what Pomerleau agreed to with ABCO in September, 2012 was backed up by his September 20, 2012 email. His complaint about ABCO’s lack of manpower was supported by Pomerleau site records and emails. He acknowledged when the security logs contradicted his correspondence concerning ABCO’s site personnel. He conceded that his use of the “without prejudice” on the termination letter was not done with legal advice. I found Mr. Faustini on balance to be an honest and credible witness, and not the “hired gun” Ms. Assuras described.

[40] Pomerleau called Nadine Leonard, the former Regional Vice President for the GTA under Mr. Parent. She is no longer with the company. She was involved with the bidding and the contract negotiation. She signed the letter of intent for Pomerleau. As a former Pomerleau executive, Ms. Leonard did not have the presumption of bias that comes with being an existing Pomerleau employee. She gave evidence about Pomerleau’s awareness of ABCO’s financial difficulties and her minutes of the September 17, 2012 meeting. I found Ms. Leonard to be candid and well spoken. For instance, she freely admitted there were TTC delays. She admitted that Mr. Tkach told her at the end of July, 2012 that ABCO needed an advance payment for mobilization, which she found extraordinary and which she approved on a one-time basis.

[41] Pomerleau called middle level managers at the time, both of whom remain Pomerleau employees. There was Bob Badr, the Assistant Project Manager on the TTC project. At the time he held two degrees in civil engineering. He was on site every day and testified as to ABCO’s scheduling, management, submittals and quality issues. There was Alexandre Lebel, the General Superintendent on the TTC project. He was a civil engineering technician. He also was on site every day. He coordinated the Pomerleau site superintendents, Marty McNeil (who was responsible for the carhouse and substation) and Earl Dunphy (who was responsible for the yard). He testified as to the daily journals the superintendents kept, both in writing and on computer. I found both Messrs. Badr and Lebel to be careful witnesses who anchored their evidence in their correspondence and the superintendent journals. I noted that, when his attention was drawn to the security logs, Mr. Lebel did take time to answer questions about the ironworkers’ presence in October, 2012 as shown in the journals. But he was rehabilitated when he explained that the security logs did not record all departures and did not record site activity.

[42] Finally, in the middle of the trial hearing, I granted Pomerleau leave to call two additional witnesses. One was Rajat Tanwar, the Peri employee whom Messrs. Tkach and Conge alleged at trial authorized the transfer of the Peri forms from other projects to the Project. Mr. Tanwar stated that he did not authorize this transfer, and that he discovered this transfer for the first time in meetings he had with Mr. Tkach in October, 2012 wherein Mr. Tkach admitted effecting this unauthorized transfer due to the block on ABCO’s account. Mr. Tanwar’s evidence was consistent with Ms. Blaschuk’s and was credible. The other witness was Fabienne Shessel, a Delinquency Control Administrator for the Carpenters District Council of Ontario. Ms. Shessel gave evidence as to the status of certain union members who worked on the TTC project. Her credibility was not attacked.

[43] Due to this analysis, I gave more credibility to the evidence of Pomerleau’s witnesses over that of Messrs. Conge and Tkach when the two conflicted. I have already commented on the weight I gave to ABCO’s other witnesses.

V. ANALYSIS

a) What was the contract between ABCO and Pomerleau?

[44] ABCO maintains that there was a contract between the parties when Pomerleau notified ABCO on April 12, 2012 that it had been awarded the concrete subcontract. The basis for this argument is the Contract A/Contract B analysis of the bidding contract that has been enshrined by the Supreme Court of Canada in the leading cases of R. v. Ron Engineering & Construction (Eastern) Ltd. 1981 17 (SCC), [1981] 1 S.C.R. 111 (S.C.C.), M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd., 1999 677 (SCC), [1999] 1 S.C.R. 619 (S.C.C.) and Double N Earthmovers Ltd. v. Edmonton (City), 2007 SCC 3, [2007] 1 S.C.R. 116 (S.C.C.). Ms. Assuras argued that as there were several bids submitted to Pomerleau for the concrete scope, this analysis applies.

[45] In my view, this is a non-issue. It is undisputed that after this notification on April 12, 2012, the parties entered into two months of negotiation over the terms of a “contract award letter.” Pomerleau delivered the first form of “contract award letter” on April 23, 2012. This was a seven page letter with attachments that outlined in detail the terms and conditions of the contract between the parties, namely the scope, price and schedule. It is clear that Pomerleau accepted the ABCO bid on the terms and conditions described in this contract award letter. If the letter contained changes from the bid documents, as Heintzman and Goldsmith state in Heintzman and Goldsmith on Canadian Building Contracts, loose-leaf (2018 – Rel 3), 5th ed., vol.1 (Toronto: Thomson Reuters Limited, 2018), section 3.8, accepting a bid subject to changes is in effect a counter-offer. Another version of the letter was sent on May 24. 2012, and yet another version was sent on June 5, 2012. This last version was signed by both parties on June 5, 2012, and it was referred to by both parties thereafter as the contract document. I so find.

[46] The bigger issue is whether the June 5, 2012 contract document incorporates by reference another contract document. The award letter states that “a standard Pomerleau contract will be prepared following Canadian Construction Association Standard Contract document CCA1-2008, and will be sent to you for your signature within the next few weeks.” The original version of the letter actually referred to the CCA1-2001 version, but Mr. Tkach replaced that reference with “CCA1-2008” in his handwriting and applied his initials. Such a document was eventually prepared and sent by Pomerleau to ABCO, but was never signed by either party. Pomerleau asserts that the standard CCA1-2008 form of contract was nevertheless incorporated by the noted reference into the contract document.

[47] Ms. Groulx relies on the decision of D. C. Shaw J. in Finn Way General Contractor Inc. v. S. Ward Construction Inc., 2014 ONSC 1374 (SCJ). In this case the contractor sent its subcontractor a purchase order which stated that, “this is to confirm that we are entering into our standard sub-contract based on [CCA-1, 2008] with your firm to . . .” The judge found that this was sufficient to incorporate the standard form CCA1-2008 into the subcontract. The judge found no ambiguity here as the standard form was well known by both parties and as the words “based on” clearly indicate that the standard form filled in those areas not referred to in the purchase order.

[48] I do not agree with Ms. Groulx. The Pomerleau contract award letter describes the “standard Pomerleau contract” as a separate document to be prepared and separately signed in the future. This indicates that the parties reasonably contemplated a further review of the standard Pomerleau form of contract with a view perhaps to making changes to it. This is not an unambiguous incorporation of a standard form of contract by reference. In Finn Way the subject purchase order made it clear to the subcontractor that it was presently entering into a subcontract that was based on the existing standard CCA1-2008 form without changes. That is not the same as the case before me. Furthermore, the Pomerleau award letter refers to a “standard Pomerleau contract,” which suggests a complicated bespoke form of contract, not a “standard form CCA1-2008” as referred to in the purchase order in the Finn Way case.

[49] I find, therefore, that there was no incorporation by reference of the CCA1-2008 form of contract. I find that the June 5, 2012 award letter was the contract between the parties.

b) Did Pomerleau breach the payment terms of the contract?

[50] In my view, the issue of payment lies at the core of this case. ABCO admits that it was in financial difficulty from the beginning, and that it needed Pomerleau’s advance financial support to continue working. ABCO maintains that Pomerleau promised to give such support, that it did not do so in fact, and that Pomerleau did not even compensate ABCO properly for the work it did do. Pomerleau denies promising this advance support and asserts that it paid ABCO in accordance with the contract. Many of the other default issues stem from this one.

[51] The contract document specified that payment was to be done as follows. ABCO’s bills were to be rendered monthly by the 25th day of the month for the work done and to be done by the end of the month. Billings were to be based on a breakdown of ABCO’s contract price as mandated by the TTC. 90% of the payment of the bill would be due 45 days after the billing date. In my view, it was implicit if not explicit in the contract that Pomerleau had the right to review and change the ABCO billing certificate, and that it was ABCO’s final invoice each month that triggered the 45 day payment period. Though there was nothing explicit in the contract document about the timing of Pomerleau’s review, it can and should be implied that the review should be done in a reasonable amount of time in the circumstances.

[52] Mr. Tkach asserted that Mr. Parent promised during the contract negotiation that Pomerleau would pay ABCO in advance, namely every two weeks, and that Pomerleau would otherwise provide ABCO will “financial support” as needed. Mr. Parent denied making this promise at any time. Mr. Parent’s evidence was that he never made this promise, and that he consistently maintained with ABCO that it would be paid for work done in accordance with the contract.

[53] I agree with Pomerleau on this point. There is no contemporary evidence that supports Mr. Tkach’s position – no email, no letter, no text message. That Mr. Tkach did not support this alleged and critical promise with contemporary documentary corroboration makes no sense. Ms. Assuras argued that Mr. Parent admitted to making this promise in the October 23, 2012 meeting. I reviewed the transcript of that meeting, and there was no such admission. Furthermore, ABCO rendered no billings for such advance payments. Also, the first written mention of this alleged promise appears in an ABCO letter to Pomerleau dated October 30, 2012, a few days before the contract termination. Finally, it makes no sense that a contractor such as Pomerleau would deviate from the payment terms of the contract to benefit a subcontractor it hardly knew.

[54] Ms. Assuras raised the issue of estoppel here arguing that Pomerleau should be estopped from denying early knowledge of ABCO’s financial difficulty and this advance payment arrangement. She referred me to cases involving estoppel; see 2189880 Ontario Inc. (Burlington Studio Dance) v. 2428438 Ontario Inc. (Boogie Down Studio), 2019 ONSC 23, and Riddell Kurczaba Architecture Engineering Interior Design Ltd. v. Governors of the University of Calgary, 2018 ABQB 11.

[55] I have reviewed these decisions. The court in Riddell referred in paragraph 59 to the Supreme Court of Canada decision in Ryan v. Moore, 2005 SCC 38 (S.C.C.) which outlined the test for estoppel. I note that the key aspect of the test is that the parties must have “a shared assumption of fact or law.” The other parts of the test concern whether parties have acted on this “shared assumption” to change their legal positions. This “shared assumption of fact” does not exist in the case before me. The evidence does not establish that Pomerleau had the alleged early knowledge of ABCO’s financial difficulty, entered into the alleged advance payment arrangement or even represented that it would do so. The knowledge Mr. Parent admitted having of ABCO’s difficulty in getting bonding did not in my view amount to knowledge of ABCO’s financial inability to perform the contract work. There was no evidence showing that an inability to get bonding meant necessarily a financial inability to perform the contract work. The foundation for estoppel is not established.

[56] The other issue about payment is whether Pomerleau improperly compensated ABCO on its monthly billing certificates. The contract, being fixed price, required that ABCO would be paid monthly based on the amount of the work that was done in proportion to the contract price, not as to the costs it incurred. This is usually how fixed price contracts work; see Marden Mechanical Ltd. v. West-Con Developments Inc., 2007 CarswellOnt 1629 (SJC) at para. 47. I note that ABCO consistently argued that its monthly entitlement was to be determined in light of the costs it was incurring. Costs are a marginal consideration. It is the amount of the work done in proportion to the contract price that matters.

[57] My primary guide as to percentage of work completed by ABCO was the certified Pomerleau progress draws. These showed the level of ABCO’s work as certified by the TTC payment certifier. ABCO prepared documents that correlated its contract price breakdown directly to the Pomerleau contract price breakdown that was certified each month by TTC. That makes a comparison of the two easy.

[58] TTC was its own payment certifier. Mr. Campbell explained how these progress draws were prepared and certified. TTC engineer Farhad Salehi reviewed the Pomerleau monthly applications for payment and made changes to reflect the state of completion. Mr. Salehi relied on TTC’s site inspectors to make this determination. The final Pomerleau certified draws would therefore have the input of the owner, who had an interest in seeing to it that only that work that was done and conformed strictly with the head contract documents was approved. The specifications in the head contract that concerned ABCO’s scope were included in ABCO contract.

[59] The evidence as to payment showed me that there was no improper compensation by Pomerleau. Indeed, the evidence shows that ABCO consistently and grossly overbilled, and that on occasion Pomerleau extended help that was not required by the contract.

[60] For instance, on ABCO Billing Certificate No. 1 dated June 25, 2012 (in the amount of $184,522.65), ABCO claimed that 100% of its preparation and 65% its mobilization work was done. This was not the case as ABCO had not even begun mobilizing on site at that time. TTC gave no value to ABCO’s scope in Pomerleau’s draws for June and July, 2012. Nadine Leonard pointed out that she was advised by Mr. Tkach that ABCO needed financial help to mobilize. She said this came as a surprise to her being so early in the contract work. I believe her as there was no previous indication from ABCO as to cash flow problems and the mobilization had not happened.

[61] Pomerleau agreed to assist ABCO with its mobilization on a one-time basis by approving $65,835.64 on this bill. ABCO accepted this reduced amount for both June and July, 2012 by rendering and delivering an invoice accordingly on July 23, 2012. Ms. Assuras claimed that this was done under duress, and referred me to authority on point. I note that for alleged duress to have legal consequences it must be “illegitimate”; see Taber v. Paris Boutique & Bridal Inc. (Paris Boutique), 2010 ONCA 157. Pomerleau was simply reviewing and revising ABCO’s monthly application for payment, as was Pomerleau’s contractual right. This was not “illegitimate” pressure. I also note that there was no complaint made by ABCO at that time. I reject the claim of duress.

[62] Ms. Assuras also complained that Pomerleau purposely delayed its review; but there was no evidence of this. This bill was primarily in the nature of an accommodation to ABCO to pay for mobilization that had no happened at that time. Pomerleau paid this invoice in August, 2012, namely within the contractual 45 days.

[63] On ABCO’s Billing Certificate No. 2 for August, 2012 (in the amount of $351,847.22), there was again a claim of 100% completion for preparation and, this time, 100% completion for site survey and mobilization. The evidence showed that these items were ongoing and not complete. For instance, Mr. Faustini explained that the mobilization item included demobilization which obviously had not happened. There is no other line item in the certificate for demobilization. Furthermore, as I will discuss later, ABCO’s submittals were behind in schedule. I note that TTC’s valuation of the ABCO scope was only $12,265 for August, 2012. Pomerleau denied both items as the payment on Billing Certificate No. 1 had been largely an advance on preparation and mobilization, and both items of work were ongoing.

[64] Pomerleau reduced the certificate to $108,734.96 recognizing completed ABCO work on caisson drilling, formwork on light post foundation and duct banks. I note that ABCO accepted the reduced amounts and rendered an invoice accordingly on August 30, 2012. Mr. Conge claimed that he complained about the reductions to Mr. Faustini, but he provided no corroboration for this claim and I do not accept it. There was no duress.

[65] Pomerleau paid ABCO in excess of the second invoice by two payments, one to ABCO’s rebar supplier, CW, on September 21, 2012 and the other to the caisson driller, SFI, on September 26, 2012. ABCO approved these direct payments. Mr. Faustini advised Mr. Conge in October, 2012 that these payment would be applied to ABCO Billing Certificate No. 2. Ms. Assuras argued that this application of the payments was somehow improper and indeed sinister, as the CW and SFI invoices were for work done before September. In my view, this issue is immaterial as there is no doubt that these invoices were on ABCO’s account and that Pomerleau’s payments could be applied against any ABCO billings.

[66] Ms. Assuras argued also that Pomerleau promised in the September 17, 2012 meeting to pay other ABCO supplier invoices and that Mr. Parent confirmed this agreement in the October 23, 2012 meeting. There was no evidence of this (including in the transcript of the October 23, 2012 meeting) and I do not accept the proposition.

[67] Both of these payments were within the contractual 45 days of the date of the invoice, and proper. Furthermore, that Pomerleau chose this form of direct payment to suppliers and subcontractors was reasonable in light of ABCO’s reference in meetings in late August and late September, 2012 to its financial challenges.

[68] The subsequent ABCO billing certificates were complicated by the meeting between the parties on September 17, 2012. Ms. Leonard took detailed minutes of this meeting. Ms. Assuras challenged the accuracy of these minutes; but ABCO received these minutes and never corrected them. I accept the minutes as accurate. At this meeting, as indicated in the minutes, ABCO disclosed its financial stress, which included a statement by Mr. Tkach that ABCO’s formwork price was underbid. The parties reached an agreement in effect amending the contract whereby Pomerleau would take over the formwork portion of ABCO with its costs in this regard being deducted from ABCO’s contract amount. The rebar work was to remain with ABCO.

[69] Mr. Conge insisted that this takeover by Pomerleau was subject to ABCO’s budget and other limitations. There is no corroboration of this statement. In any event, this assertion makes no sense. Why would a contractor take over work subject to a price that the subcontractor has just admitted was too low? I do not accept Mr. Conge’s assertion. The agreement was memorialized in Mr. Faustini’s email to ABCO on September 20, 2012 which makes no reference to a budget limit.

[70] ABCO’s Billing Certificate No. 3 dated September 25, 2012 for September work (in the amount of $828,045.08) and the invoice of the same date are confusing documents. Mr. Conge admitted that the certificate had errors, and could not explain the invoice. The total amount billed “to date” is shown to be $814,203, which is also the amount shown to be payable for September. The invoice shows $644,915.84, which does not correspond with any figure in the certificate. I note that the “current amount” for September work in the certificate is shown to be $468,237.82.

[71] On October 17, 2012 Pomerleau approved $176,698.44 and Mr. Faustini explained the reduction as follows. Pomerleau was prepared to pay for the caisson drilling in an amount that was similar to what had been billed the previous month by SFI for caisson drilling, as progress in this area was at the same pace. 105 caissons had been drilled to that point. This reduction was 66% of the claimed amount for caisson drilling, namely $164,000. As for the yard pole base installation, Pomerleau did not approve these amounts as TTC had not approved either this item or caisson drilling work due to the failure by ABCO to obtain TTC approval for the joints in the caissons.

[72] The caisson joint issue arose in early August, 2012 when ABCO started pouring concrete for caissons for the yard poles. The drawings did not indicate that the concrete for these caissons had construction joints, namely interruptions in the continuous concrete pours. It was undisputed that the specifications that formed part of the ABCO contract made it clear that TTC approval was required in advance if such joints were to be inserted where none were shown on the drawings. It was also undisputed that such joints were required in this case given the configuration of the poles.

[73] Initially, ABCO’s issue was the location of the joints. Mr. Conge testified that ABCO wanted to locate the joints at the pole base plates, and did not get clarity from Pomerleau as to the heights of the base plates. Mr. Badr’s evidence satisfied me that a proper reading of the contract drawings revealed these heights, and that Mr. Badr verbally informed Messrs. Conge and Mr. Abid at site meetings in August, 2012 accordingly.

[74] The real issue here, though, was the absence of TTC approval of the joints. Mr. Campbell of TTC wrote a letter dated August 13, 2012 to Ms. Leonard reiterating the requirement of a submittal to TTC for its approval on this issue. This letter was forwarded by Pomerleau to ABCO forthwith. There is no doubt in my mind that obtaining this approval fell within ABCO’s responsibility, as the insertion of the joints was a matter of construction means and methods, namely, as Mr. Badr pointed out, shop drawings. Mr. Conge asserted that this was Pomerleau’s responsibility, but I give his evidence little credibility for the reasons stated earlier and as he seemed intent on blaming Pomerleau for all of ABCO’s difficulties. Even Mr. Farahzadi, ABCO’s expert, conceded this point in the end of his cross-examination. For some unexplained reason and despite several notices, ABCO never took steps to get TTC approval. As a result, TTC withheld payment for the caisson drilling and yard pole installation. As a result, I blame ABCO for this issue, and Pomerleau was justified in withholding payment to ABCO accordingly as ABCO had not done its work properly.

[75] As for the other items on ABCO’s Billing Certificate No. 3, these were for formwork on the substation and duct banks. TTC approved $353,542 for this work. As Mr. Faustini explained, Pomerleau authorized a small payment of about $10,000 on the duct banks; but it was not prepared to authorize payment on the other aspects of these items in light of the cost it was accumulating at this time for the formwork pursuant to the September 17, 2012 agreement. Mr. Faustini gave evidence that by mid-October, 2012 Pomerleau’s formwork costs was approaching $300,000. I find this position reasonable in light of the cost-plus nature of the September 17, 2012 agreement.

[76] Mr. Faustini explained these reductions to ABCO by marking up Billing Certificate No. 3 and returning the marked copy to ABCO. Pomerleau did not pay ABCO the approved $176,698.44 amount as the contractual 45 day payment period ended on November 10, 2012, a fact that was admitted by Mr. Tkach in his email of October 16, 2012. November 10, 2012 was after the contract termination.

[77] There is an invoice from ABCO to Pomerleau dated September 27, 2012 for “payroll expenses” for September 16 to 22, 2012. There is no evidence that Pomerleau agreed to accept this charge. Ms. Assuras argued that the minutes of the September 17, 2012 meeting indicated that Pomerleau agreed to this payment. I have reviewed the minutes, and they do not so indicate. Indeed, Mr. Faustini noted on the invoice that at the October 23, 2012 meeting it was confirmed that Pomerleau did not have pay it. Furthermore, the invoice contradicts the monthly billing stipulations of the contract. I do not accept this charge.

[78] The documents contain ABCO Billing Certificate No. 4 for October work (in the amount of $1,061,387.01). The evidence shows that this certificate was not delivered to Pomerleau until this litigation, namely after contract termination. Therefore, there was no obligation to pay.

[79] In any event, ABCO Billing Certificate No. 4 contains many of the same problems that existed with the previous certificates, namely the claim of 100% completion in preparation, site survey and mobilization when these were not complete, and the claim for caisson work despite the ongoing caisson joint issue. TTC certified $517,000 worth of ABCO “concrete” work as of the end of October, 2012, and $558,010 for “direct buried underground conduits and ducts.”

[80] Based on my review of the evidence, I find that Pomerleau did not breach the payment terms of the contract as amended by the September 17, 2012 agreement.

c) Did Pomerleau terminate the contract with justification?

[81] There is no doubt that Pomerleau terminated the contract on November 2, 2012. The key issue is whether it was justified. The onus of proving this justification lies on Pomerleau; see McKenna’s Express Ltd. Air Canada, 1992 CarswellPEI 67 (PEI SCTD), at paragraph 18.

[82] A termination of contract is justified when the other party has repudiated the contract. In Rand General Contractors Inc. v. Taskforce Engineering Inc., 2009 CarswellOnt 1144 (SCJ) Justice Boswell held that contract repudiation can be found where a party has either, “(i) breached the contract at a level amounting to a substantial failure to perform its obligations, or (ii) demonstrated an intention to no longer be bound by the contract.”

[83] As to the factors to be considered, the Ontario Court of Appeal in 968703 Ontario Ltd. v. Vernon, 2002 35158 (ON CA), 2002 CarswellOnt 573 at para. 16 outlined these: (a) the ratio of the party’s obligation not performed to the obligation as a whole; (b) the seriousness of the breach to the innocent party; (c) the likelihood of repetition of the breach; (d) the seriousness of the consequences of the breach; and (e) the relationship of the part of the obligation performed to the whole obligation. Has Pomerleau demonstrated that ABCO repudiated the contract?

[84] It is often not one or two things that justify a contract termination. In Shield Metal Manufacturers Ltd. v. Canadian Pacific Forest Products Ltd., 1993 CarswellBC 1176 (BCST) the court noted that it was the totality of several factors, such as crew incompetence leading to deficiencies, unsafe working conditions, lack of management and delays, that justify the contract termination. At paragraph 40 Justice Hutchison stated that the defendant rightfully found that “cumulative effect” all of these breaches amounted to repudiation as “the commercial purpose of the contract had been frustrated.” I take guidance from this decision.

c.1) Excessive payment demands

[85] In Marden Mechanical, op. cit., paras. 28 and 53 Justice Corbett found that excessive demands for payment by a contractor combined with a slowdown in the work amounted to a fundamental breach of contract. I have found that, while Pomerleau did not breach the payment terms of the contract, ABCO continuously overbilled. Pomerleau significantly reduced ABCO’s first two billings certificates, and ABCO accepted these reductions by issuing invoices for the reduced amounts. ABCO’s third billing certificate was significantly impacted by two real issues, the September 17, 2012 agreement whereby Pomerleau took over ABCO’s formwork and the ongoing issue with the caisson joints. Pomerleau significantly reduced the third certificate.

[86] Against this backdrop was the increasing evidence of ABCO financial stress. At the August 23, 2012 site meeting, Mr. Tkach admitted raising the prospect of ABCO’s bankruptcy. Mr. Lebel noted that this caused Mr. Parent to consider a “Plan B.” At the September 17, 2012 meeting Mr. Tkach was much more fulsome in his description of ABCO’s stress. As indicated in Ms. Leonard’s minutes of the meeting that ABCO did not correct, Mr. Tkach admitted having issues with government and union remittances, that its bid on the formwork was too low (a statement that was supported by the evidence that ABCO did not allow for winter work, dewatering and welding in its price), that Peri did not want to deal with ABCO anymore, that other projects were “preventing ABCO performing,” and that ABCO wanted Pomerleau to either take over ABCO or its work or support ABCO with “cash flow.” Importantly, Mr. Tkach admitted that ABCO was facing bankruptcy in “1 month.” It was in this context that Pomerleau decided to take over the formwork scope to give ABCO help.

[87] At the October 23, 2012 meeting, Mr. Tkach raised for the first time verbally the allegation that Pomerleau had agreed to pay ABCO in advance and provide financial support, an agreement which I have found did not exist. ABCO complained at length about Pomerleau’s reductions on the billing certificates, and received Pomerleau’s explanation in response, particularly on the issue of the caisson joints and the Pomerleau back-charge for formwork cost.

[88] ABCO then sent a series of letters and emails which in my view amounted to excessive and unreasonable demands for payment. The first was from Mr. Tkach dated October 25, 2012 asserting that ABCO had billed Pomerleau a total of $921,293.66 on its first three billing certificates (which was not the case), that $685,637.63 was unpaid (which was not the case), and that this level of payment “can never sustain a project of this magnitude.” Mr. Tkach demanded immediate full payment of ABCO Billing Certificate No. 2 in the amount of $317,790.63, adding that this payment would “enable . . . better service” and “smooth operation.” This letter did not refer to the fact that ABCO had accepted the Pomerleau reductions to Billing Certificate No. 2 by issuing an invoice accordingly. This letter gave no weight to Pomerleau’s payments to CW and SFI and Pomerleau’s own formwork cost which it had assumed by agreement. This letter also ignored the caisson joint issue.

[89] The second letter was again from Mr. Tkach five days later on October 30, 2012. In this letter, he mentioned for the first time in writing the alleged two week guaranteed advance payment agreement, which I have found did not exist. He reiterated the demand for $317,790.63 and stated that from the beginning of the project ABCO “was financially incapable of sustaining the operation because of our unstable financial standing.” Mr. Faustini responded to this letter on October 31, 2012 explaining in detail the payment history on this contract.

[90] Mr. Conge then sent an email the same day, October 31, 2012, stating that as ABCO has not received payment, “we cannot move on.” Mr. Faustini responded by email the same day, October 31, 2012, stating that as the reference was to Billing Certificate No. 3, and as no revised ABCO invoice had been presented for that certificate, nothing was due. ABCO had already confirmed that the invoice for Billing Certificate No. 3 was not due at that time. Mr. Faustini added that if ABCO failed to provide the necessary manpower by the next day, ABCO would be in default and Pomerleau reserved the right to terminate the contract.

[91] I find that these letters and emails from ABCO were essentially a statement, a threat, by ABCO that it would not perform its contract as required if it was not paid as it demanded, namely in an amount that was not due. ABCO was attempting to revisit past payment applications to extract further payment from Pomerleau, probably out of financial desperation. Against this background of ABCO excessive payment demands and financial stress, the other issues concerning ABCO’s production acquire a greater level of profundity.

[92] I make one point here about the relevance of ABCO’s financial stress to the contract termination. Ms. Assuras argued that financial stress could not be a ground for contract termination. She relied upon the decision in Standard Precast Ltd. v. Dywidag Fab Con Products Ltd., 1989 CarswellBC 307 at paragraph 54 for this proposition.

[93] This case does not stand for that proposition. The case concerned the justification of a termination of a construction sub-subcontract to supply and install panels. The subcontractor argued that a delay in completing deficiency correction work on the panels justified contract termination. It also argued that subsequent evidence of an ability to perform the contract was not relevant. It relied upon the decision in Sanko S.S. Co. v. Eacom Timer Sales Ltd. (1986), 1986 804 (BC SC), 32 DLR (4th) 269 (BCSC) in this regard. In Sanko the court accepted as proper a termination of a shipping contract by the owner of lumber based solely on the shipper’s declaring insolvency. There was no contemporaneous evidence of an actual inability to complete the contract. The court in Standard distinguished the Sanko decision, holding that with shipping contracts, reliability of service, namely time of the essence, could be implied into the contract, thereby justifying contract termination based only on a declaration of insolvency. The court went on to find that the contract termination in the Standard case was not justified, but the court did not find that evidence of financial stress could never justify termination of a construction contract.

[94] In my view, the Sanko decision in fact supports Pomerleau. It stands for the proposition that where time is of the essence in a contract, evidence of a party’s insolvency justifies contract termination. There was evidence in this case that time was of the essence in the ABCO contract. The award letter required that ABCO’s work “must be completed according to the general contractor schedule.” It also stated that “the subcontractor [ABCO] undertakes to begin and carry out the work at the proper time, in an organized and coordinated way with all the ordinarily required competence and diligence.” It also states that ABCO was to complete its work in accordance with “TTC’s approved schedule.” These clauses indicate that time was of the essence in the contract. I note as well that several Pomerleau witnesses, particularly Messrs. Parent and Faustini, referred to the fact that Pomerleau was potentially subject to liquidated damages in favour of the TTC if there was a delay in Pomerleau’s work. In my view, this evidence made ABCO’s financial stress highly relevant to the issue of the propriety of Pomerleau’s termination of ABCO’s contract.

c.2) Production slowdown

[95] In his contract termination letter dated November 2, 2012, Mr. Faustini described at least four issues that pertained to a slowdown in ABCO manpower and production on site, namely the failure by ABCO to respect the overall project schedule, the failure to pay workers, the failure to pay subcontractors and suppliers, and the failure to provide project management. I find that there is sufficient evidence to support these allegations.

[96] Concerning project management, the June 5, 2012 award letter required that ABCO provide the coordination necessary to meet the Pomerleau schedule. I find that it was implicit, if not explicit, requirement of the contract that ABCO provide a proper project manager, and that it failed to do so. ABCO alleged that Mr. Conge performed a management function, and that he was formally appointed as Project Coordinator in early October, 2012. This was four months into the contract work. On the witness stand, Mr. Coleman, the formwork foreman, stated that he found Mr. Conge to be quite ineffective. He said Mr. Conge avoided decisions, avoided him, Mr. Colemen, and “was never there.” Mr. Coleman was also critical of ABCO’s general management of its work. In an email to Mr. Conge dated September 16, 2012 (and copied to Pomerleau), Mr. Coleman complained about ABCO’s poor management on this project, its lack of provision of material, its shuffling of workers from project to project, its replacement of good workers with poor ones, and its lack of planning and organization. He said he was close to burnout, and made this telling statement: “You ask a 100% from your workers yet you do not stand behind them.” Ms. Assuras attacked Mr. Coleman’s credibility as he ended up working for Pomerleau. As stated earlier, I, on the contrary, found Mr. Coleman to be credible.

[97] ABCO’s lack of proper project management damaged its coordination function. There was ABCO’s repeatedly absence from coordination meetings. As Messrs. Badr and Lebal pointed out, ABCO needed to be present at coordination meetings. Ms. Assuras argued that the award letter specified that ABCO be present at meetings as requested by TTC or Pomerleau and that there was no evidence of such requests. But the same award letter required that ABCO coordinate its work with others. It can be implied from this that ABCO presumptively should be present at coordination meetings. In any event, Mr. Badr sent Mr. Conge a sharp email on August 21, 2012 stating that ABCO’s presence at coordination meetings was “mandatory.”

[98] The minutes of the coordination meetings on August 14, 21, 23, 28, October 16 and October 23, 2012 indicate that ABCO was absent from all of these meetings. ABCO’s absence from coordination meetings and “questionable productivity” were noted in a Pomerleau letter to ABCO dated September 18, 2012. There was also the absence of two week look ahead schedules. In addition to providing a master schedule and updates of same, Pomerleau provided ABCO every two weeks with two week look ahead schedules plotting the ABCO work over the following two weeks. The contract required that ABCO provide its input into these schedules. It is undisputed that ABCO did not do so.

[99] Concerning ABCO suppliers and subcontractors, there is evidence that they were not being paid and that Pomerleau was aware of this. A critical supplier was Peri, the form supplier. Mr. Tkach admitted to Pomerleau in the September 17, 2012 meeting that “Peri doesn’t want to deal with ABCO anymore.” This stems from the fact that ABCO at the time owed a considerable amount of money to Peri on other projects. Indeed, at the September 17, 2012 meeting Mr. Tkach stated that he planned “on returning all rented material.”

[100] There was considerable time spent in the trial concerning the Peri equipment and its existence on the site in the first place. The issue was whether ABCO transferred Peri forms from the Millhaven project in Kingston to the TTC site without Peri’s authority. Having heard the evidence of Ms. Blaschuk and Rajat Tanwar, I am satisfied that Peri had not authorized this transfer as there was a lock on the ABCO account with Peri dating back to April, 2012 due to the large outstanding balance on the ABCO account. These two witnesses made it clear to me that Peri first learned about the equipment transfer to the TTC site at a meeting between Peri and ABCO no sooner than on December 12, 2012. The fact that ABCO would transfer form equipment to the site without the supplier’s authority showed me not only ABCO’s desperation at this time, but its duplicity as well. After Pomerleau took over the formwork on September 17, 2012, it made its own arrangements with Peri to get forms to the site.

[101] Pomerleau was also made aware of non-payment of other ABCO subcontractors. Ms. Leonard stated that she was surprised at the end of July, 2012 when Pomerleau was asked by ABCO to fund mobilization, namely the mobilization of the caisson driller. In the September 17, 2012 meeting the issue of paying ABCO subcontractors came up again, and Pomerleau agreed to pay the existing invoices of CW and SFI, as these were trades whose supply was necessary and could readily be monitored by Pomerleau.

[102] Concerning ABCO workers and the project schedule, these were in my view the biggest issues next to the excessive payment demands. There had been an ongoing issue concerning ABCO’s manpower on site prior to the September 17, 2012 agreement between the parties. When Pomerleau took over the formwork scope and its associated payroll pursuant to that agreement, the idea was that ABCO would have sufficient resources to deliver at least the rebar in a timely way.

[103] The evidence indicates that this did not happen. On September 26, 2012 Marty McNeil, Pomerleau’s Site Superintendent responsible for the car house and substation, sent ABCO and Pomerleau a letter noting that Pomerleau’s pour of the foundation wall footings had to be cancelled that day due to only one rebar worker being on site. Mr. Faustini notified Mr. Tkach of this problem by letter dated September 27, 2012.

[104] Problems continued and deepened thereafter. On October 3, 2012 Earl Dunphy, Pomerleau’s other Site Superintendent responsible for the yard, noted in an email that ABCO’s rebar crew left the site for no reason despite the existence of available work. On October 5, 2012, Pomerleau wrote a letter to ABCO notifying them of ABCO’s lack of workers on site. In response, ABCO announced the appointment of Mr. Conge as Project Coordinator, and the appointment of an estimator and a steel foreman, thereby in effect admitting that more management was required.

[105] On October 17, 2012 it is undisputed that the ABCO rebar crew left the site and did not finish chairing the rebar in duct bank 20. On October 19, 2012 Pomerleau advised ABCO in writing that it was in default of the contract for failing to pay union remittances to Local 27. These remittances were eventually paid directly by Pomerleau on ABCO’s account with ABCO’s approval.

[106] Following the October 23, 2012 meeting and the payment demands ABCO made at that meeting, Mr. Conge wrote an email letter to Pomerleau on October 24, 2012 demanding that it give three day notice of the need for the rebar crew. On the witness stand, he alleged that there was not enough work for the rebar crew. There was available work as indicated on the governing two week look ahead schedule that had been circulated on October 4, 2012. Mr. Dunphy’s email to Mr. Conge dated October 24, 2012 identified work on caisson cages and duct-banks that could be done by a rebar crew of two. In the witness stand, Mr. Conge insisted that there was no work available due to Pomerleau’s poor management. As I found Mr. Conge generally less credible than the Pomerleau witnesses, I prefer Pomerleau’s evidence on this point. I agree with Ms. Groulx that this exchange showed that ABCO was looking for a way to withdraw from its work obligations.

[107] There was evidence that ABCO work essentially stopped at the end of October. According to Pomerleau’s daily journal and ABCO time sheets, there were no ABCO workers on site on October 24, 25 and 26, 2012 despite planned work for them at that time. According to the ABCO time sheets, its workers were not on site after October 25, 2012. On October 30, 2012 Mr. Dunphy emailed Mr. Conge noting that that morning ABCO’s foreman took rebar tie wire off the site for other projects when it was needed on the Project. He demanded that this stop. This was further evidence to me that ABCO was ceasing work. According to Pomerleau journal entries, there was rain on October 29 and 30, 2012; but on October 31, 2012 other work took place. Mr. Dunphy sent emails to Mr. Conge on October 31, 2012 identifying caisson and duct-bank work to be done and demanding that the rebar crew appear on site. Yet, on October 31, 2012 Mr. Tkach sent Mr. Faustini a letter stating that there was no work for the rebar crew and repeating the demand for three day notice. Again, for the reasons already stated, I prefer Pomerleau’s evidence as to the availability of rebar work at this time. Mr. Tkach’s letter was further evidence in my view of ABCO intention to stop working.

[108] It was on October 31, 2012 that Mr. Faustini emailed Mr. Conge advising that ABCO would be in default if it failed to produce the necessary manpower the following day, November 1, 2012. There was no evidence that ABCO produced that manpower on November 1, 2012.

[109] I find that there was evidence of a pronounced production slowdown by ABCO in October, 2012 particularly after the October 23, 2012 meeting. I find that this combined with ABCO’s excessive payment demands and threats of non-performance amounted to a repudiation of the contract that justified Pomerleau’s termination of it, particularly after Pomerleau had assumed ABCO’s formwork scope on September 17, 2012 to help ABCO through its financial difficulties.

[110] I should make a note here about the evidence. Both sides complained about the absence of witnesses to corroborate the above noted site records and correspondence. Ms. Groulx complained about the absence of Mr. Abid, the author of the ABCO daily journal. Ms. Assuras complained about the absences of Messrs. McNeil and Dunphy. Both wanted me to draw adverse inferences against the parties due to these absences. I am not prepared to do so. I view these site records and correspondence more in the nature of business records, namely records where the authors made their relevant observations of manpower activity in the usual and ordinary course of their business, and not to advance the dispute; see Valleyfield Construction Co. v. Argo Construction Ltd., 1981 CarswellOnt (Sup. Crt.) at paragraph 3. I, therefore, give these documents credibility.

[111] Mr. Conge also attempted to deflect questions about ABCO manpower by referring the court repeatedly to the security logs for the site to determine whether the rebar workers were in fact not present. The security logs were also raised many times in argument by Ms. Assuras to justify the ABCO site non-attendance. The security logs did not record the work that was done or not done on site. That evidence was established by the site records and correspondence of the parties’ site officials, namely the individuals responsible for monitoring site activity. I do not accept the security logs as credible evidence of ABCO’s work presence and commitment.

c.3) Other issues

[112] In his termination letter of November 2, 2012 Mr. Faustini referred to other issues concerning ABCO’s work, namely safety, provision of unionized workers, deficiencies and late submittals. On balance, I found that the safety and union issues did not themselves justify termination. However, the deficiencies and submittals did.

[113] Concerning safety, the issue was the danger posed by protruding rebar. Exposed rebar can cause serious personal injury to individuals who fall on them. It is undisputed that ABCO was required by the contract to provide safety. The photographs provided by ABCO indicate that it took steps to barricade protruding rebar. Pomerleau complained that ABCO failed to place caps on the exposed rebar and did not provide other necessary protection, and that it constantly had to remind ABCO to provide for safety. But it did not serve a default notice in this regard, and there was no accident. Mr. Farahzadi stated that the barricades he saw in the photographs were sufficient protection. I accept that limited evidence from Mr. Farahzadi. I do not find that ABCO breached its contract on this issue.

[114] Concerning unionized workers, the issue is whether ABCO was required by the contract to employ nothing but unionized labour. I am satisfied that the general contract between Pomerleau and TTC required nothing but unionized labour on the Project. As Messrs. Parent and Campbell stated, the project was to be a “wall to wall union job.” But the June 5, 2012 contract award letter did not require such exclusive employment of union labour from ABCO. All that this document required of ABCO was that it abide by the listed five union agreements that Pomerleau had at the time.

[115] One major union in issue was Local 721 of the Ironworkers Union. There is strong evidence that ABCO did not employ exclusively members of that union on its rebar crews. Mr. Tkach admitted as much at the September 17, 2012 meeting. Pomerleau’s Default Notice No. 1 dated October 4, 2012 “requested” that ABCO correct this problem by employing only members of Local 721. The problem is that the June 5, 2012 contract award letter did not specify that Pomerleau was bound by a collective agreement with this union. Therefore, in my view, it is at best an open question whether ABCO was required to employ exclusively Local 721 workers.

[116] The other major union in issue was Local 27 of the United Brotherhood of Carpenters and Joiners of America. This was a union that Pomerleau had contracted with as indicated in the June 5, 2012 contract award letter. ABCO did employ members of Local 27. The problem is that many of these employed members had suspended union cards due to a failure to pay dues. When members fail to pay union dues, they are removed from the union. It is the responsibility of the signatory contractor to insure that the members they employ are fully paid up members of the union. Febienne Shessel confirmed this evidence, and I accept it. Ms. Shessel also confirmed that many of the Local 27 members that ABCO employed had lapsed union cards due to nonpayment of dues. What I do not accept, though, is that this was a widespread problem. There were some occasions when the union stewards removed workers from the site due to this issue. But the problem never appeared to reach the level of a work stoppage or a union complaint to the TTC or a formal default notice from Pomerleau.

[117] On the other hand, there were significant deficiency issues. I have already dealt with the caisson joint issue that arose in early August, 2012. I have found that this was a significant issue, as it interrupted in a major way the flow of TTC money. I have also found that this issue was ABCO’s fault and that it never dealt with it despite receiving timely notice. This added justification to the contract termination.

[118] There were other deficiency issues that Pomerleau crystallized into what it called Non-Comformity Reports (“NCRs”). NCR No. 1 concerned the issue raised by the TTC in late August, 2012 as to the source and quality of the steel for the rebar. ABCO dealt with that issue immediately. NCR No. 2 concerned the installation of foundation wall dowels in the wrong location. ABCO dealt with that issue subsequently as well. These two issues did not justify contract termination obviously.

[119] NCR No. 3 was, on the other hand, significant. On September 17, 2012 Pomerleau issued NCR No. 3 to ABCO concerning the installation by ABCO of four caissons in the retaining wall at the wrong depth. In correspondence the next few days, ABCO proposed installing these caissons at different locations than as specified in the contract documents. Mr. Badr explained in his evidence that this was an unacceptable solution as the alignment of the OCS poles (the poles that feed power to the streetcars) was an integral part of the design of the OCS system. What ABCO proposed, therefore, required an OCS redesign, which was unacceptable. Mr. Badr communicated this rejection to ABCO on September 15, 2012, and ABCO never corrected the problem. By the end of October, 2012 Pomerleau took the initiative to deal with this issue. This issue added to the justification of the contract termination.

[120] The next two NCRs were, in my view, not significant. NCR No. 4 concerned ABCO’s installation of rebar for two piers in the wrong location. ABCO delivered a proposed fix on October 6, 2012, and corrected the problem by October 18, 2012, but failed to submit a calculation signed by a professional engineer as required by the specifications in the contract. ABCO admitted that it did not employ a professional engineer. NCR No. 5 involved the wrong location of four piers in the substation staircase. This problem was resolved by ABCO by October 18, 2012. Neither of deficiencies themselves justified contract termination.

[121] The final NCR before contract termination was NCR No. 6. This concerned the installation of the staircase footing and foundation wall in the substation at the wrong elevation. The evidence is clear that ABCO poured this section, and that, contrary to ABCO’s assertions, the levels for the footings were set in the contract drawings. Mr. Farahzadi opined that this problem was created by Pomerleau’s excavator, but he admitted that this information about the excavation came from ABCO’s counsel. I do not accept Mr. Farahzadi’s evidence on this point. Mr. Badr showed that the drawings set the levels for the footings. As stated earlier, I found Mr. Badr credible, and I accept his evidence on this point. This problem remained unresolved at contract termination, and added justification to it.

[122] Concerning submittals, Specification 01 33 00 (which was in the contract) specified that ABCO submittals for TTC approval before fabrication and construction had to allow for a minimum of 21 days for each review and a minimum of three cycles for each submittal, namely a minimum of 63 days. Considerable time was spent at the trial hearing reviewing the history of ABCO submittals. This history showed that ABCO was consistently slow and deficient in their submittals and resubmittals. For instance, on June 18, 2012 ABCO made a submittal for the light post OCS Caisson Foundation of F2 and F3 (rebar lists and placement drawings). It was rejected by the TTC on July 17, 2012. Over a month later ABCO delivered a resubmittal on this issue on August 23, 2012, despite the fact that caissons were already being drilled. Throughout July, 2012 ABCO delivered formwork shop drawings that were rejected because they did not have an engineer’s stamp, as required by the specifications. The submittals for the substation were received in June, 2012 when the master schedule showed that they should have been delivered in May, 2012. ABCO did not deliver rebar placement drawings for the carhouse until late August and early September, 2012 when they were late based on the master schedule and when they were in urgent need. ABCO delivered samples of formwork and falsework accessories only at the end of August, 2012, which again was late based on the master schedule. Mr. Badr testified that ABCO did not deliver all of its submittals, including the submittals for the substation, before it left the site. This evidence was not contested.

[123] Mr. Conge consistently tried to explain ABCO’s submittal timing as being the result of the award letter being signed no sooner than on June 5, 2012. This was not credible as ABCO was awarded the contract on April 23, 2012, was directed by Pomerleau to start making submittals in May, 2012, and could have started submittal work accordingly.

[124] Based on the evidence, I find that the lack of resolution of three significant ABCO deficiencies (namely the lack of approval for the caisson joints, the wrong depths of the four caissons in the retaining wall, the wrong elevation of the staircase footing and foundation wall in the substation) plus ABCO’s dilatory history of submittals added justification to Pomerleau’s termination of the contract.

[125] ABCO raised the defence of waiver. Ms. Assuras argued that an October, 2012 Pomerleau NCR Status Overview showed NCR 3 as being “closed,” and that this amounted to a waiver of this issue as a contract breach and a ground for contract termination. She referred me to cases involving waiver; see Northern Construction Co. v. R., 1925 835 (AB KB), [1925] 2 DLR 582 (Alta. SC); McKenzie Demolition Ltd. v. Tau Holdings Ltd., (1983) 2 CLR 117 (BCSC); Zanatta & Levac Bulldozing Ltd. v. British Columbia Hydro & Power Authority, [1987] 2 WWR 322 (BCSC). These cases are distinguishable as they concern breaches of contract that were known and tolerated for some time. In the case of NCR 3, the deficiency was not corrected by ABCO, and Pomerleau continued to look to ABCO to correct the problem. Eventually, when ABCO failed to correct, Pomerleau took justifiable steps to do so in late October, 2012. There was no waiver.

[126] In the end, I find that Pomerleau has met its onus of showing that its termination of the ABCO contract was justified. ABCO’s excessive payment demands (combined with threats of non-performance if not paid) plus its marked production slowdown were the primary justification. ABCO’s persistent failure to address three significant deficiency issues and its dilatory history of submittals added to the “cumulative effect” of these breaches, thereby showing that ABCO was not prepared to perform its contract work and repudiated the contract.

[127] Ms. Assuras argued that Pomerleau failed to give proper notice to ABCO of these critical contract breaches. I disagree. Pomerleau gave timely written responses to the ABCO excessive payment demands and gave repeated and timely notice to ABCO of the need to produce the manpower required by the contract. There was no requirement in the award letter on Pomerleau to issue formal “default notices” in this regard.

d) Did Pomerleau breach the duty of good faith?

[128] The Supreme Court of Canada in Bhasin v. Hrynew 2014 SCC 71, [2014] 3 S.C.R. 494 outlined an organizing principle of good faith in the common law of contracts. The Court found that parties to contracts owe each other a duty to act honestly and fairly in performing their contractual obligations. Essentially, this duty requires that a party not seek to undermine the legitimate contractual interests of the other contracting party in bad faith.

[129] Ms. Assuras argued that Pomerleau breached this duty. She argued that the evidence showed that it was always Pomerleau’s intention to replace ABCO. She pointed to an email Mr. Parent sent on September 10, 2012 to Mr. Lebel requiring him to put together a “formwork team for the carhouse.”

[130] I disagree with this assertion. The evidence shows that Pomerleau indeed began developing a “Plan B” as it became aware of ABCO’s performance challenges and financial stress starting in late August, 2012. At the site meeting of August 23, 2012, the ABCO team led the Pomerleau team to observe that, as indicated in Mr. Lebel’s note, “it’s really not going well with them [ABCO] and we must make adjustments immediately.” I agree with Ms. Groulx that developing such a Plan B in anticipation of a real risk that ABCO may not be able to complete its contract work is not a violation of the duty of good faith in contract. I was given no authority for that proposition.

[131] Indeed, the evidence indicated that Pomerleau tried to assist ABCO in taking over part of its scope. There were instances prior to the September 17, 2012 when Pomerleau assisted ABCO with workforce help in order to keep ABCO moving. There was the September 17, 2012 agreement where, at ABCO’s request, Pomerleau took over the formwork scope. Pomerleau did not breach the duty of good faith in contract. The contract termination took place properly and primarily in response to unreasonable financial demands and threats combined with a pronounced ABCO work slowdown in late October, 2012.

[132] Ms. Assuras argued that there were other instances of Pomerleau bad faith, such as the alleged reductions it made to ABCO payment certificates without explanation. I disagree. The evidence showed that Mr. Faustini provided Mr. Conge with marked up copies of the third certificate. As to the first two certificates, ABCO adopted the reductions and issued invoices accordingly. Ms. Assuras also referred in argument to Pomerleau’s conduct in relation to its finishing trades, such as Kimco Sales Limited (“Kimco”). None of this was brought out in the evidence, and I do not accept it.

[133] I do not find that Pomerleau breached the duty of good faith in contract.

e) What are Pomerleau’s damages?

[134] In light of its justified termination of the contract, Pomerleau is entitled to its damages. The measure of its damages is its cost to complete the ABCO contract less what it would have cost Pomerleau had ABCO completed the contract work; see Heintzman and Goldsmith on Canadian Building Contracts, Fifth Edition, op. cit., at page 9-46; see also Marden, op. cit., paragraph 62.

[135] This entitlement is tempered by the obligation on the innocent party, namely Pomerleau, to properly mitigate its damages. Furthermore, any costs flowing from changes to the original contract scope after the contract termination cannot be back-charged to the offending party; see Marden, op.cit., paragraph 28.

e.1) Completion costs

[136] Mr. Faustini gave evidence that after the contract termination Pomerleau tried to get a single contractor to complete all of ABCO’s scope under a fixed price contract. He said that this was not possible, but never explained in detail why that was not the case. He also provided no corroboration of this evidence – no correspondence, no tenders. He said that Mr. Parent had had “conversations” with contractors on what it would cost to complete ABCO’s work. None of these “conversations” were disclosed by Mr. Parent. Therefore, this was hearsay evidence that could have been avoided. Its credibility is marginal at best. There was also no disclosure of who these contractors were and what they said. I do not accept this uncorroborated explanation by Mr. Faustini as sufficient evidence of reasonable mitigation on Pomerleau’s part.

[137] According to Mr. Faustini, Pomerleau then had no choice but complete ABCO’s scope on its own. Pomerleau hired subcontractors and suppliers to do so. He showed how in November, 2012, Pomerleau hired Rodbusters Reinforcing Steel to install rebar on a time and material basis during that month. He showed that on December 10, 2012 Pomerleau entered into a unit price subcontract with Kimco whereby Kimco would supply and install rebar at a unit price of $1,755/metric tonne. He showed that on February 22, 2013 Pomerleau entered into a contract with Birmingham Construction whereby Birmingham completed the caissons and OCS foundations for a fixed price of $635,000 plus HST. On November 27, 2013 Pomerleau entered into a subcontract with Metro Concrete Floors Inc. whereby Metro was to complete the concrete placement work for a fixed price of $962,500 plus HST. Pomerleau hired All Canada Crane Rental Corp. to facilitate the installation of the forms and rebar. It entered into a contract with Peri whereby Peri was to supply forms to the site. Mr. Faustini indicated that Pomerleau hired a Montreal engineer, Andre Houle Inc., to provide engineering services for the formwork scope, and that Pomerleau hired Form & Build Supply (Toronto) Inc., CRS Contractors Rental Supply and HD Supply Canada Inc. to provide miscellaneous equipment and materials. It hired other subcontractors and suppliers as well.

[138] Mr. Faustini showed that the bills from these parties were entered and tracked in Pomerleau’s electronic database, CMIC, using a cost coding system that assigned codes to the costs of aspects of the contract scope. Mr. Faustini was the one who approved the bills for payment and assigned the cost codes to the bills. Such electronic cost tracking in my view meets the definition of business records for evidence purposes; see Valleyfield Construction Co., op. cit. at paragraph 3.

[139] In any event, Pomerleau provided electronic copies of the bills from these parties on a USB key along with proofs of payment. The filed index for these bills showed a total of $5,955,491.90. The filed Scott Schedule Schedule D shows the totals of this index as forming part of Pomerleau’s counterclaim, and shows a total of $6,286,173.02. The discrepancy between the two figures lies in the category named, “EO305/formwork and rebar.” Mr. Faustini confirmed that the lesser amount, $5,955,491.90, was the proper figure as Pomerleau erroneously included ABCO invoices in category EO305 when it prepared the Scott Schedule. In the Scott Schedule, Pomerleau describes this $5,955,491.90 as including “materials only.” Mr. Faustini in his testimony clarified that of these documents only the Rodbusters invoices concern labour.

[140] This was not, however, by any means the extent of what Pomerleau claims its completion costs were. Pomerleau claims that it incurred a huge amount for its labour costs in completing the ABCO contract. Ms. Groulx filed another USB key that contains a summary of what Pomerleau claims were its labour costs for the ABCO scope allocated to the cost codes on its CMIC database. This is a huge summary. It contains totals for each cost code. These totals in turn reach an overall total of labour cost of $15,131,571.20. That means that Pomerleau filed documents showing that it incurred material and labour costs in completing ABCO’s contract scope totaling $21,087,063.10. This is in excess of the $9,300,000 contract price in ABCO’s contract by more than $11 million.

[141] Mr. Faustini then gave some curious evidence about Pomerleau’s overall cost of the ABCO contract scope. He stated that he recalled that Pomerleau incurred a total cost of between $25 and $26 million to complete ABCO’s contract scope, and that of this amount there was a “delta of” $17 million that pertained either to the cost of completion due to the termination of ABCO’s contract or to the “changes” that TTC made to the contract scope after the ABCO contract termination. This $17 million was the amount of the cost that exceeded ABCO’s contract price. Mr. Faustini stated that there had been a very lengthy arbitration between Pomerleau and the TTC concerning these TTC “changes,” and that this arbitration ended in a resolution that contained a “confidentiality agreement.” He stated that this confidentiality agreement prohibited him and Pomerleau in general from disclosing the TTC “changes” and the resolution of the arbitration.

[142] Mr. Faustini then gave some further curious evidence about the Pomerleau counterclaim. He stated that he and Mr. Parent decided to limit the Pomerleau counterclaim not only to the above noted $5,955,491.90 of material completion costs, but to the round number $5 million. No explanation was given for these limitations, and they seemed as a result rather arbitrary. In essence, for some reason, Pomerleau would appear to be basing its counterclaim as against ABCO on the following logic: the total cost to Pomerleau due to ABCO’s contract termination was $14.3 million plus HST less the amount of the ABCO contract price of $9.3 million plus HST, not the alleged actual cost of $25 to $26 million.

[143] This leaves me in a quandary. While there is more than enough evidence showing that Pomerleau incurred a significant cost overrun in completing ABCO’s scope, it is not at all clear to me that this overrun was due to the termination of the ABCO contract. All I received was Mr. Faustini’s word on this point. What was needed was a full disclosure of the TTC “changes” that impacted the ABCO scope and a damage expert analysis of the extent to which the Pomerleau costs related to the TTC changes on the one hand and to the ABCO contract termination on the other. This evidence was not provided. Yet, for some unexplained reason Pomerleau was prepared to limit its counterclaim to a fraction of what it said its completion cost overrun really was.

[144] Without this evidence, I am not prepared to find that Pomerleau has proven on a balance of probabilities that its overall costs to complete the ABCO contract scope exceeded the ABCO contract price, namely that it is entitled to damages for completion costs in this action. Ms. Groulx argued that a difficulty in assessing damages should not stop the court from assessing damages. She referred me to the decision in Penvidic Contracting Co. v. International Nickle Co. of Canada Ltd., 1975 6 (SCC), [1975] 1 SCR 267, 1975 CarswellOnt 299 (SCC) at paragraph 22. The issue for the Court in Penvidic was the proper method of assessing damages for contract breach, namely whether a per unit estimation of the extra cost of ballasting due to a breach of contract by the owner of a railroad building contract could be accepted over the more accurate but much more difficult method of reviewing detailed expense records. The Court found that it could. The question for me, however, is not one of a method of assessing damages using available evidence. It is whether Pomerleau has established that it has suffered damages in the first place.

[145] Furthermore, the alleged assessment difficulty in this case was created by Pomerleau itself through its confidentiality agreement with the TTC, not by the objective complexity of the evidence. The evidence would appear to be available and assessable, but just not disclosable due to this confidentiality agreement. Pomerleau should not be able to “have its cake and eat it.” It must bear the consequences of the arrangements it has made.

[146] In addition, for the reasons stated earlier, I do not find that Pomerleau has proven that it properly mitigated its damages. For all these reasons, I deny this claim.

[147] What I will add though is that I am satisfied, based on the enormity of the costs Pomerleau has incurred in completing the ABCO scope, that Pomerleau did not complete that scope at a saving that should benefit ABCO.

e.2) Backcharge – caisson joint issue

[148] Despite Pomerleau’s failure to prove its claim for damages for completion cost overrun, it is nevertheless entitled to recover the costs it incurred to correct ABCO’s deficiencies. These costs would be recoverable even if Pomerleau had improperly terminated the contract and ABCO was entitled to damages; see Vallie Construction Inc. Minaker, 2011 ONSC 6565 (Ont. Master) at paragraph 236. These are costs that Pomerleau would not have had to incur in any event had ABCO properly performed its contract.

[149] The first issue is the caisson joint issue. I have earlier in these Reasons determined the liability for the caisson joint issue, namely I found that it was ABCO’s fault that TTC approval of the joint was not obtained as required by the specifications and continued not to be obtained, despite ABCO’s clear and continuous knowledge of this issue and despite TTC withholding payment for the caisson installation as a result.

[150] Ms. Assuras argued that this was all a devious plot by Pomerleau to delay payment to ABCO for the caisson installation work until after contract termination to allow Pomerleau to get the benefit of the payment for this work. I do not find this to be the case. TTC made it clear in Mr. Campbell’s letter to Pomerleau dated August 13, 2012 (that was forwarded to ABCO) that this issue was one of non-compliance with contract documents and that payment was being withheld as a result. The issue was a real one of non-compliance and fell within ABCO’s responsibility for the means and methods of its construction. It should take responsibility for failing on this issue.

[151] Pomerleau claims a back-charge of $648,835.93 for its costs to correct this deficiency. On October 16, 2012 Pomerleau, now in charge of the formwork, took the initiative to propose in a letter to Mr. Campbell of the TTC a method to deal with this issue. The TTC reviewed the proposal and required a revision. Mr. Badr stated in his evidence that he submitted a revised procedure to the TTC for its review on December 24, 2012, and that the TTC finally on January 10, 2013 approved the revised proposal.

[152] Mr. Campbell confirmed in his evidence and in the brief of documents he submitted during the trial hearing that Pomerleau never claimed an extra for its work on this issue from the TTC. This makes sense as, as I have noted earlier, this was indeed a non-compliance issue.

[153] As to the quantum of the Pomerleau back-charge, Mr. Badr testified that Pomerleau incurred significant costs in completing the second pour for the 105 caissons that ABCO had installed. Much of this cost was labour. It was tracked by Pomerleau’s cost codes as described earlier. On April 9, 2014 Mr. Badr prepared a back-charge document showing these costs, which totaled $648,835.93 (HST inclusive). There was no significant dispute about the quantum of this back-charge. I, therefore, grant this back-charge in full.

e.3) Back-charge – improperly built caissons

[154] I have already discussed the issue of the four caissons in the retaining wall that were built by ABCO at the wrong depth. There is no doubt that this was an ABCO deficiency, as ABCO itself proceeded to propose methods for a fix, namely a relocation of the caissons. I have also already discussed that Pomerleau found this proposal unacceptable as the proposal required a design change for the overall OCS system. I find this position credible and I accept it.

[155] ABCO never corrected this problem before its contract was terminated. Mr. Badr gave evidence that Pomerleau proceeded to propose to the TTC on October 30, 2012 a fix that involved a demolition and reconstruction of the four cassions at the proper depth. This proposal was approved by the TTC on December 11, 2012. Pomerleau proceeded to demolish the caissons, correct the ground, drill new caissons and rebuild the caissons in the correct location using concrete and non-shrinkable grout.

[156] Pomerleau claims a back-charge of $169,848.74 for this item. Mr. Badr gave evidence that he compiled the back-charge document. He referred to the material invoices that composed the back-charge. He stated that Pomerleau included the provision of concrete in this back-charge, despite the fact that Pomerleau was contractually obligated to provide the concrete. The rationale was that Pomerleau had to provide the concrete for this installation twice, which represented a damage to Pomerleau. That makes sense. Mr. Badr indicated that Bermingham’s scope included the demolition and reconstruction of these caissons. This represented the bulk of the Pomerleau cost on this item. Mr. Badr stated that there were other costs, such as for rebar and grout.

[157] When the work was finally done, Mr. Badr stated that he prepared a back-charge document using Pomerleau’s cost records. The document is dated April 9, 2014. It shows a total cost to Pomerleau of $169,648.74 (HST included). There was no serious attack on this quantum. I, therefore, find that Pomerleau is entitled to be paid this amount, $169,848.74.

e.4) Back-charge - formwork

[158] As discussed earlier, the parties agreed at their September 17, 2012 meeting that Pomerleau would assume the formwork scope of the ABCO contract. Contrary to ABCO’s assertion, I have found that this agreement did not limit Pomerleau’s cost in this regard to ABCO’s budget. Mr. Tkach disclosed at this meeting that ABCO had underbid the formwork, and, with this admission, no contractor would reasonably have agreed to be limited to ABCO’s budget. There was also no evidence that Pomerleau in fact agreed to this limit.

[159] Pomerleau kept track of its formwork costs incurred prior to contract termination by tracking the labour time through time sheets and the equipment cost through invoicing from suppliers such as All Canada Crane. These time sheets and invoices were filed. Pomerleau then assigned a separate cost code to these costs in its CMIC database. That was made clear by Mr. Faustini. The total for this back-charge is $310,902.26. As stated in the Scott Schedule, this total includes the undisputed $19,307.94 of union dues that Pomerleau paid to the union on ABCO’s behalf and at ABCO’ request.

[160] Ms. Assuras argued that the Pomerleau time sheets are unreliable. She argued that the submitted Pomerleau time sheets for its occasional formwork prior to September 7, 2012 contradicted what appeared in an email from Mr. Lebel dated September 7, 2012, an email which contained a list of some time and material costs incurred by Pomerleau up to September 7, 2012. I agree with Ms. Groulx’s response that this email did not purport to be a complete list and did not include the labour and material costs incurred by Pomerleau after the September 17, 2012 meeting. I do not find the Pomerleau time sheets unreliable, and I do not accept Ms. Assuras’ point.

[161] Ms. Assuras also argued that this was not a proper back-charge as the formwork was taken out of the ABCO contract scope pursuant to the September 17, 2012 agreement. She argued that this meant that Pomerleau could not back-charge against the remaining ABCO contract scope for Pomerleau’s formwork cost going forward.

[162] This point has some merit. I do not agree that the formwork was “taken out of” the ABCO scope. I view the September 17, 2012 agreement as being in the nature of a sub-subcontract wherein Pomerleau became the sub-subcontractor to ABCO for the formwork. The key was that this “sub-subcontract” was cost-plus with no cost limit, as that was not agreed to, as I stated earlier. I note that ABCO continued to bill in October, 2012 for the formwork, and Pomerleau applied its formwork cost as a “back-charge” against the formwork portion of the ABCO billing. That was evident from Mr. Faustini’s testimony concerning his review of the ABCO September and October ABCO billing. This means that only that portion of Pomerleau’s pre-contract termination formwork cost that exceeded what was properly included in the ABCO billing for formwork could be back-charged against ABCO’s non-formwork scope.

[163] I, therefore, find that Pomerleau is entitled to this back-charge of $310,902.26, and that it is to be applied to ABCO’s proper billings that included formwork.

e.5) Small back-charges

[164] The Scott Schedule contains five small Pomerleau back-charges: $617.77 for rebar cage delay; $921.06 for lost concrete; $1,038,91 for welding deficiencies; $2,068.53 for concrete lost and refill poured for incomplete Caisson #96; $962.54 for concrete that was lost due to ABCO not having rebar cages ready. These five items total $5,608.81. At the trial hearing, there was no evidence and no submissions on these items. I, therefore, make no ruling in this regard.

f) What is the result?

[165] Pomerleau does not appear to take the position that ABCO disentitled itself to any compensation by wrongfully repudiating the contract. In my view, there is authority for this proposition. In Heyday Homes Ltd. v. Gunraj, 2004 34324 (ONSC), Master Sandler reviewed the law of construction contract repudiation in depth. At page 77, the Master made the following statement which he said applied whether the contract price was payable in lump sum or in installments: “If some installments had been paid and then the builder abandoned and failed to substantially complete, the owner usually cannot recover what he has already paid but is relieved from paying further installments and can recover for the costs of correcting defective work and for the increased costs of completion, that is, his damages for the builder’s breach.” This decision was approved by Justice Perell in his summary of the law in this area in D&M Steel Ltd. v. 51 Construction Ltd., 2018 ONSC 2171 at paragraphs 51 to 55. Given Pomeleau’s position, I will not take this approach.

f.1) ABCO’s base claim

[166] What then is the base amount ABCO is entitled to? ABCO’s claim has the following components: $1,581,508.28 for its claim for lien; and $1,695,000 for loss of profit. I will comment on these parts in order.

[167] Let me deal with the lost profit claim first. It is well established that a party that wrongfully repudiates a contract cannot obtain the profit it anticipated had it finished the contract work. I have found that ABCO wrongfully repudiated its contract, and therefore it cannot recover its lost profit. In any event, I reiterate Mr. Tkach’s statement at the September 17, 2012 meeting that ABCO had underestimated the formwork price. I also note that Mr. Conge freely admitted that ABCO had not included winter protection costs in its price, when winter was clearly contemplated in the Pomerleau master schedule. Mr. Conge described this absent winter protection cost as huge. Given this evidence, I fail to see how ABCO would have recovered a profit in any event had it completed its work. I deny this claim.

[168] Concerning the ABCO claim for lien, the evidence in support of this claim was a moving target. Mr. Conge admitted that he calculated the lien amount by taking off quantities of work he considered done. This takeoff was based on a review of the tender drawings. Mr. Conge said that he then applied unit cost rates to these quantities to get to the lien amount. The only exception to this process was the inclusion of $432,410.99 of rebar supply, which Mr. Conge said was the total of all CW invoices.

[169] This process was not consistent with the contract, which was a fixed price contract. As previously discussed, the contract, being fixed price, created entitlement to payment based on the proportion of the work done as applied to the contract price. Not surprisingly, when Ms. Groulx took Mr. Conge through his calculations of the ABCO claim for lien and correlated those calculations to the ABCO Billing Certificate No. 4 (ABCO’s final billing certificate) there were many discrepancies. As I have previously noted, the ABCO billing certificates were created by Mr. Conge generally in accordance with the spirit of the award letter, namely by estimating the proportion of the ABCO work that was done. The problem with these certificates was that they consistently exceeded the proper proportion, particularly as indicated in the Pomerleau certified draws. Mr. Conge consistently dismissed these discrepancies between Billing Certificate No. 4 and ABCO lien claim cavalierly. At one point, he stated that Pomerleau was “lucky” where the item in Billing Certificate No. 4 exceeded the equivalent item in the claim for lien calculation. At another point, he stated that Ms. Groulx was comparing “apples and bananas” and did not explain what he meant. This cavalier attitude only detracted from Mr. Conge’s credibility in my view.

[170] Not surprisingly, when it particularized its claim in the Scott Schedule, ABCO reverted back to its last billing certificate, Billing Certificate No. 4, and relied on those figures. The total value of work shown on this billing certificate was $1,043,645.04 plus HST. To this ABCO in its Scott Schedule added $237,587.67 plus HST of what it called “unbilled rebar supplied” for the caissons for light post foundation and retaining wall. To this ABCO also added eight claims for extras that had not been billed, which extras totaled $183,605.21 plus HST. This produces a total of $1,464,837.92 plus HST, or a grand total of $1,655,266.85.

[171] I have already commented at some length as to my view of the ABCO billing certificates. I found them to be consistently excessive in their assessment of the state of ABCO’s work, and that Pomerleau’s reductions were reasonable in all the circumstances. Pomerleau’s assessment of ABCO Billing Certificate No. 1 was $65,835.64, Billing Certificate No. 2 was $108,745.97, and Billing Certificate No.3 was $176,698.44, for a total assessment as the end of September, 2012 of $351,280.05. I found these assessments reasonable in the circumstances, particularly as the Pomerleau certified draws to the end of September, 2012 show a similar amount for ABCO’s work, namely $365,807. Both the Pomerleau and TTC assessments rightfully gave no value to ABCO’s work on the light pole installations due to ABCO failure to address the caisson joint issue.

[172] What then to do with the formwork that Pomerleau assumed on September 17, 2012? As I stated earlier, I found that the agreement on that day was in the nature of a sub-subcontract whereby Pomerleau took over the formwork under a cost-plus arrangement but with no limitation on costs. That means that ABCO should be credited for this work in its billings, so that Pomerleau’s formwork cost can be properly back-charged. Concerning September, 2012 work, Pomerleau disallowed $86,371.06 on the ABCO Billing Certificate No. 3 due to Pomerleau’s formwork back-charge. There was no evidence directly correlating the Pomerleau certified draw for September, 2012 to the items Pomerleau disallowed, and there is no such correlation evidence on the face of the certificates themselves. Therefore, for this one calculation, I am prepared to accept the ABCO figure of $86,371.06.

[173] As for October, 2012 work, on its Billing Certificate No. 4 for its October, 2012 work ABCO showed $210,211.38 worth of work done in October that did not relate to the installation of caissons for light post foundation. Pomerleau’s certified draw for October, 2012 showed $151,250 worth of work in October for ABCO’s concrete scope and $496,628 worth of work in October, 2012 for buried conduits and ducts. Given these figures in the Pomerleau certified draw, I am prepared to accept the ABCO figure of $210,211.38 as an accurate reflection of the state of completion of ABCO’s work in October, 2012 that was not the installation of the caissons at light pole foundations.

[174] That means that ABCO’s state of completion in proportion to its contract price was the following: [($351,280.05 (Pomerleau’s certification to end of September) + $86,371.06 (disallowed September work) + $210,211.38 (certified October work)] x 1.13 (HST) = $732,084.61 (tax inclusive).

f.2) ABCO’s extras claims

[175] What then of the ABCO claim for extras? In the Scott Schedule ABCO asserts eight claims for extras. All of these, totaling $207,473.82 (HST inclusive), pertained to alleged additional work done by ABCO to create ductbanks. One claim for $107,944.62 (HST inclusive) concerned the demolition and rebuilding of a ductbank Pomerleau had allegedly constructed at the wrong elevation. The other seven claims for a total of $99,529.20 concerned alleged additional work on ductbanks that ABCO claimed were not shown on the tender drawings.

[176] None of these extra claims were formally asserted before the contract termination. The June 5, 2012 contract award letter does not contain a procedure for the assertion of claims for extras. Nevertheless, it is dubious for a subcontractor to assert claims for extras for the first time in the middle of the litigation. Mr. Conge maintained that ABCO did not have the time to make these claims in a timely way. Furthermore, for the seven claims for additional work on ductbanks, Mr. Conge asserted that ABCO needed the “as built” drawings to quantify the claims and did not get them until the litigation. These assertions were self-serving and lacking in credibility. ABCO should have kept track of its extra costs in a timely way. However, because there was no procedure for extra claims in the award letter, I will ground my analysis on the substance of the claims, not procedure.

[177] Concerning the extra for the demolition of ductbank #20 and a rebuilding of ductbanks in that area, there was evidence from the ABCO daily reports that this work was commenced on October 4, 2012 and was due to poor Pomerleau preparation work. The reports state the following: “ground was at wrong level.” The work described in the reports includes cutting rebar in the walls on grid line 22/28. The reports describe work on this item taking place on October 9, 11, 12 and 16, 2012. ABCO notified Pomerleau by email on October 19, 2012 that there would be an extra cost associated with re-ordering the rebar. Pomerleau did not seriously challenge the substance of this claim.

[178] I am prepared to grant this extra claim in the circumstances. There was difficulty with the quantification of the claim. Mr. Conge’s calculations were difficult to follow. He appears again to have done a takeoff of the new ductbank and walls. I did not find corroboration for the figures for the labour and material he included in the claim. Nevertheless, I will give the benefit of the doubt here to ABCO in light of the basic merit of the claim. I grant ABCO this extra of $107,944.62 (HST inclusive).

[179] The other seven claims are another story. The drawings governing the ductbank installation stated the following: “The layout is for guideline only and may vary as per site conditions. Contractor to site verify routing and distance before ordering materials. Verification shall include coordination with other disciplines underground work.” One electrical ductbank drawing had the following note: “Ducts position/orientation is subject to change to suit site and installation constraints. Contractor may adjust duct configuration as required.” ABCO was to submit shop drawings for the ductbanks in advance. The drawings with these notes were a part of the ABCO submittals.

[180] Mr. Conge’s evidence as to whether ABCO in fact site verified the routing and distance of the ductbanks was equivocal at best. He initially maintained that he did the site verification, and then said Mr. Abid did it. There was no corroboration of these assertions. When pressed as to these inconsistencies and as to whether the site verification in fact happened, Mr. Conge did not answer. Mr. Conge was also pressed as to whether he submitted a request for information due to the alleged shortage of routing information on the drawings. He maintained that ABCO had no time for such requests prior to contract termination. That makes no sense as ABCO alleges it did the extra work before the contract termination. It should have had time to request information.

[181] Mr. Conge claimed extra cost for these items in an email to Mr. Lebel dated September 28, 2012. Mr. Lebel did not respond as he expected Mr. Badr to do so. In any event, Mr. Lebel stated that the claim was groundless as the drawings in this regard were “schematic” only and site conditions for the installation of the ductbanks could create unexpected complexities. I agree with him. I find that these are not valid claims for extras, and I deny them.

[182] ABCO also claims in the Scott Schedule $268,474.07 (HST inclusive) worth of “unbilled” rebar. It claims that this amount of rebar was supplied to the site by CW and was not included in ABCO’s billings. The credibility of this claim is in issue. This is not a claim for additional work. ABCO asserts in the Scott Schedule that its bills included $293,444.02 worth of rebar, and that this additional $268,474 was for some reason not included.

[183] Yet Mr. Triolo of CW gave evidence that the total amount of rebar CW supplied to ABCO cost $379,310.83, that Pomerleau, as stated above, paid CW $74,004.85 on account, and that the balance owing to CW is therefore $304,905.98. CW’s default judgment against ABCO is in this amount. Therefore, the total amount of what CW says it supplied is much less than what ABCO now claims was supplied. ABCO claims that it supplied Pomerleau $561,918.08 worth of rebar, whereas CW’s evidence was that it supplied no more than $379,310.83 worth of rebar. This is a discrepancy of $182,607.25. Therefore, it is and remains an open issue as to whether there was in fact ABCO “unbilled” rebar cost.

[184] That there was unused rebar on site at the time of contract termination is not in dispute. Mr. Faustini was asked about this and he conceded that the leftover steel could have been as high as 116 tonnes. But that is not the question. The question is whether ABCO did not bill for this rebar, and that question was not satisfactorily answered in my view.

[185] If the rebar was in fact not billed, there are other hurdles. There is the fact that ABCO’s contract with Pomerleau was a fixed price contract, and that ABCO’s costing is largely irrelevant as a result. As Thomas G. Heintzman points out in his text, with a fixed price contract, the contractor “takes a calculated risk that the actual cost of the work to be carried out may be more or less than anticipated”; see Thomas G. Heintzman, Bryan G. West and Immanuel Goldsmith, Heitnzman and Goldsmith on Canadian Building Contracts, Fifth Edition, op. cit., 6.1(c), “Lump Sum Contract.” Also, the award letter specified that the progressive monthly billing must be based on the work projected to be “completed” by the end of each month. In preparing its billing certificates, ABCO would have assessed its state of completion in proportion to its fixed contract price, not its costs. Therefore, if ABCO obtained rebar that was not incorporated into the work by the time of contract termination or if the incorporated rebar cost more than ABCO could recover under its fixed price contract, those were risks that were contemplated by the contract and do not generate an entitlement to payment.

[186] For these reasons, I am not prepared to grant ABCO a damage claim for the alleged “unbilled” rebar, particularly as I have found that ABCO wrongfully repudiated the contract. I deny this claim as well.

f.3) ABCO’s entitlement or liability

[187] Credit needs to be given for the payments Pomerleau made to ABCO or on ABCO’s behalf. These payments again were the following: the $65,835.64 that Pomerleau paid to ABCO in August, 2012; the $74,404.85 that Pomerleau paid to ABCO’s supplier, CW, in late September, 2012; and the $86,859.99 that Pomerleau paid to ABCO’s caisson driller, SF, in late September, 2012. The total of these payments is $227,100.48.

[188] The result of this analysis is as follows: [$732,084.61 (ABCO’s base amount) + $107,944.62 (ABCO’s extras)] – [$648,835.93 (Pomerleau’s caisson joint back-charge) + $169,648.74 (Pomerleau’s improperly built caisson back-charge) + $310,902.26 (Pomerleau’s formwork back-charge) + $227,100.48 (Pomerleau’s payments)] = (-$516,458.18).

[189] I, therefore, find that ABCO is entitled to none of its claims and that its claim for lien should be discharged accordingly. Furthermore, I find that ABCO is liable to pay Pomerleau $516,458.18 in damages for breach of contract.

g) What is CW’s holdback entitlement?

[190] Pomerleau insisted that CW prove the quantum of its claim despite its default judgment against ABCO. In my view, it has done so. Mr. Trilo showed that the CW claim was based entirely on its outstanding invoices to ABCO. CW rendered 15 invoices from July, 2012 to October 2012 totaling $379,310.83. The evidence indicates that the only payment CW received was the $74,404.85 cheque it received from Pomerleau on September 25, 2012. This leaves a balance owing of $304,905, namely the amount of the CW default judgment. I confirm that CW is owed this amount.

[191] It was undisputed that CW’s holdback entitlement is its entitlement to basic holdback, namely 10% of the proper value of ABCO’s work. I have found that the proper value of ABCO’s work as of the date of its contract termination was $732,084.61 (ABCO’s base amount) + $107,944.62 (ABCO’s extras) = $840,029.23. 10% x $840,029.23= $84,002.92.

[192] No one took the position that the valuation of ABCO’s work for the purpose of calculating the basic holdback should account for Pomerleau’s back-charges in any way. This makes sense in light of section 30 of the Construction Act, R.S.O. 1990, section 30 (“CA”) which prohibits a payer from using holdback to pay for “services or materials in substitution for” the services or materials of a person who is default of contract. Therefore, I will not do so.

[193] As stated above, there are no other claims for lien against the basic holdback. The SFI lien has expired and the Volvo lien was discharged. As a result, I find that Pomerleau must pay CW $84,002.92 in basic holdback.

VI. CONCLUSION

[194] In conclusion, I rule that ABCO’s claims are dismissed, its claim for lien is discharged, and the lien bond security posted for its claim for lien pursuant to the order of then Master MacLeod dated December 14, 2012 be returned to Pomerleau for cancellation.

[195] I also rule that Pomerleau must pay CW holdback in the amount of $84,002.92 in thirty (30) days, and that upon doing so the lien bond posted by Pomerleau for the CW claim for lien must be returned to Pomerleau for cancellation. Should Pomerleau fail to so pay, the lien bond must respond accordingly to pay CW, and upon doing so, the lien bond must be returned to Pomerleau for cancellation.

[196] I also rule that ABCO must pay Pomerleau $516,458.18 in damages for breach of contract on Pomerleau’s set off and counterclaim. I understand that ABCO is not bankrupt and that this judgment is not stayed as a result.

[197] As to costs, I required that the parties deliver costs outlines for the reference including the trial hearing. They did so by mid-March, 2019. ABCO’s costs outline shows $1,268,206.80 in full indemnity costs, $1,087,509.40 in substantial indemnity costs, and $857,530.93 in partial indemnity costs. Pomerleau’s costs outline shows $811,217.33 in full indemnity costs, $733,634.92 in substantial indemnity costs and $500,887.69 in partial indemnity costs. CW’s costs outline shows $44,073.85 in substantial indemnity costs and $28,414.31 in partial indemnity costs.

[198] If the parties cannot otherwise agree on costs, all those seeking costs must deliver written submissions on costs of no more than five (5) pages on or before August 30, 2019. All responding written submissions of no more than five (5) pages must delivered on or before September 13, 2019. All reply written submissions of no more than three (3) pages must be delivered on or before September 20, 2019.

[199] If the parties are unable to agree on the form of my final report, an attendance may be required to settle the report.

Released: August 16, 2019 ___________________________

MASTER C. WIEBE

COURT FILE NO.: CV-13-472439

DATE: August, 2019

ONTARIO

SUPERIOR COURT OF JUSTICE

In the matter of the Construction Act, R.S.O. 1990, c. C.30

BETWEEN:

ABCO One Corporation

Plaintiff

• and -

City of Toronto, Toronto Transit Commission and Pomerleau Inc.

Defendants

REASONS FOR JUDGMENT

Master C. Wiebe

Released: August 16, 2019