COURT FILE NO.: CV-21-00673057-0000
DATE: 20221007
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
BBL. CON DESIGN BUILD SOLUTIONS LIMITED
Applicant
- and –
VARCON CONSTRUCTION CORPORATION
Respondent
William A. Chalmers for the Applicant
Vito S. Scalisi for the Respondent
HEARD: September 1 and 2, 2022
PERELL, J.
REASONS FOR DECISION
A. Introduction. 2
B. Procedural and Evidentiary Background. 2
C. Facts. 5
D. The Arbitrator’s Award. 9
E. The Asserted Categorial Errors of Law.. 11
F. The Test for Leave to Appeal 17
G. Discussion and Analysis. 20
H. Conclusion. 27
Schedule A – Construction Contract 28
A. Introduction
[1] In this Application, pursuant to s. 45 of the Arbitration Act, 1991,[^1] BBL. Con Design Build Solutions Limited (“BBL”) seeks leave to appeal an Arbitrator’s award.
[2] Although its Construction Contract is dated three months earlier, on July 12, 2018, BBL, a contractor, hired Varcon Construction Corporation, a subcontractor, to construct the underground and the shell of a residential building in Ajax, Ontario. Twenty months later, on March 19, 2020, before the construction was complete, BBL terminated the Construction Contract. BBL and Varcon accused each other of breaches of contract. Pursuant to the Arbitration Act, 1991, their dispute went to arbitration. BBL claimed damages of approximately $19.7 million. Varcon counterclaimed for approximately $8.9 million. On November 4, 2021, the Arbitrator, Carol A. Albert, released her Arbitration Award. She dismissed BBL’s claim, and she allowed Varcon’s counterclaim for $1,048,351.93.
[3] For BBL to be granted leave to appeal, it must demonstrate that the Arbitrator arguably made significant errors in law. Arguable errors of law are appealable. Arguable errors of fact are not appealable. Arguable errors of mixed fact and law are not appealable - unless an arguable error of law is extractable.
[4] On this application for leave to appeal, the Applicant, BBL, submits that the Arbitrator arguably made 524 categorical errors of law. The Respondent, Varcon, submits that the Arbitrator made no errors or no arguably appealable errors.
[5] For the reasons that follow, the Application is dismissed. I agree with Varcon. The Arbitrator made no appealable errors.
B. Procedural and Evidentiary Background
[6] On March 19, 2020, BBL terminated the Construction Contract, and it served a Notice of Commencement of Arbitration on Varcon.
[7] On April 14, 2020, the parties appointed Carol A. Albert to be the Arbitrator.
[8] On May 22, 2020, BBL delivered a Statement of Claim, which was later amended. BBL claimed approximately $19.7 million. The claim was for damages for breach of contract for: (a) delay ($11.8 million); (b) completion costs ($5.0 million); (c) reimbursement of payments to sub-subcontractors ($1.1 million); (d) refund of overpayments ($1.7 million); (e) deficiency damages ($0.15 million); (f) indemnification for legal fees; and (g) pre- and post-award interest.
[9] On June 22, 2020, Varcon delivered a Statement of Defence and Counterclaim. It claimed approximately $8.9 million. Its counterclaim was for damages for breach of contract for: (a) unpaid goods and services ($3.7 million); (b) loss of profit ($2.3 million); (c) damages for delay ($2.9 million); and (d) pre- and post-award interest.
[10] The arbitration hearing began on March 8, 2021. It proceeded over 14 days[^2] to be completed on August 16, 2021.
[11] At the arbitration, BBL supported its case with the following evidence.
a. Affidavits dated January 20, 2021, February 12, 2021, and March 3, 2021 from Darrell Dixon. Mr. Dixon is the principal of BBL. He was cross-examined at the hearing.
b. Report dated January 13, 2021 from Peter Gray of MTE Consultants. Mr. Gray is a geoscientist and a hydrologist. He was cross-examined at the hearing.
c. Reports dated November 12, 2020 and January 13, 2021 from Robert Low of Robert Low Financial Advisory Inc. Mr. Low is a forensic accountant. Mr. Low was cross-examined at the hearing.
d. Reports dated November 12, 2020 and January 11, 2021 from Davvid O’Keefe of O’Keefe Associates Limited. Mr. O’Keefe is a quality surveyor. Mr. O’Keefe was cross-examined at the hearing.
e. Reports dated November 12, 2020 and January 21, 2021 from John Pearson of Pearson Consultants. Mr. Pearson is an expert about delay in construction projects. Mr. Pearson was cross-examined at the hearing.
[12] Varcon supported its case with the following evidence.
a. Report dated January 4, 2020 from Larry Andrade of Deloitte LLP. Mr. Andrade is a forensic accountant.
b. Report dated December 22, 2020 from Sandra Burnell of Revay and Associates Limited. Ms. Burnell was an expert about delay in construction projects.
c. Affidavit dated February 16, 2021 from Bruce Forde. Mr. Forde was Varcon’s Project Manager.
d. Report dated December 29, 2020 from Willem Huinink. Mr. Huinink is a quality surveyor.
e. Affidavit dated February 25, 2021 from Vito Riccio. Mr. Riccio is the principal of Varcon.
f. Reports dated December 2, 2020 and January 4, 2021 from John Westland of Ground Truth Engineering Ltd. Mr. Westland is a geotechnical expert with expertise with respect to dewatering problems.
[13] Varcon’s witnesses were not cross-examined at the hearing.
[14] The evidentiary record was voluminous. There were 15 volumes of affidavit evidence and 816 exhibits from Mr. Dixon from BBL. There were seven volumes of combined evidence, including 87 exhibits, from Mr. Forde and Mr. Riccio from Varcon. Varcon also filed an additional volume of documents as a compendium. There were 12 expert reports from the eight expert witnesses.
[15] The Arbitrator made the following evidentiary rulings with respect to the evidence proffered by BBL.
a. The Arbitrator found that as a witness, Mr. Dixon was argumentative, rambling, evasive, and sometimes non-responsive. At times, he refused to answer straightforward questions with straightforward answers. At times, his answers contradicted the documents. The Arbitrator found that Mr. Dixon tried to tailor his answers to fit the theory of BBL’s case. The Arbitrator found that Mr. Dixon failed to produce relevant documents potentially harmful to BBL’s case and helpful to Varcon’s case and that he coloured his evidence in an effort to go beyond supplying the factual foundation of the case to advocate on behalf of BBL. The Arbitrator found that he refused to make admissions about certain facts and attempted to spin the facts and that he exaggerated his evidence. The Arbitrator concluded that where Mr. Dixon’s evidence contradicts that of a Varcon witness, in the absence of clear corroborating documentary or expert evidence, she accepted the evidence of the Varcon witness over the evidence of Mr. Dixon.
b. The Arbitrator did not put much weight on the evidence of Mr. Gray because he was argumentative, partisan, and evasive.
c. The Arbitrator gave little weight to the evidence of Mr. Low because he relied on an appraisal report that had not been admitted into evidence and that was qualified by the restriction that the report was only to be used for a particular purpose and not for the purposes of arbitration and because Mr. Low appeared to be a partisan rather than an expert providing an impartial opinion.
d. The Arbitrator found that Mr. O’Keefe was a straightforward and forthright witness, but the probative value of his evidence was undermined because he could not explain the calculations that had been made by his colleague and because he failed to examine the revised construction drawings.
e. The Arbitrator found that Mr. Pearson’s evidence about BBL’s delay claim was worthy of little weight because he was not an impartial expert and he made partisan arguments for BBL outside his areas of expertise. The Arbitrator found that Mr. Pearson’s analysis ignored the circumstances that the milestone deadlines in the contract were unreachable from the outset and that he failed to consider site conditions that both parties faced in their effort to carry out the Construction Contract.
[16] The Arbitrator made the following evidentiary rulings with respect to the evidence proffered by Varcon.
a. The Arbitrator found that Mr. Andrade, who provided an expert report about the delay claims, was a credible witness.
b. The Arbitrator found Ms. Burnell’s affidavit evidence compelling and credible. She found Ms. Burnell’s report with respect to delay detailed and comprehensive.
c. Since there was no cross-examination, the Arbitrator accepted much of Mr. Forde’s evidence as unchallenged. She held that where his evidence was contradicted by the evidence of a BBL witness, she preferred the evidence of Mr. Forde.
d. The Arbitrator found Mr. Huinink’s evidence as an expert quantity surveyor to be succinct and credible.
e. Since there was no cross-examination, the Arbitrator accepted much of Mr. Riccio’s evidence as unchallenged. She held that where his evidence was contradicted by the evidence of a BBL witness, she preferred the evidence of Mr. Riccio.
f. The Arbitrator found Mr. Westland’s expert evidence on geotechnical issues and in particular dewatering as well reasoned, detailed, and credible.
[17] On November 4, 2021, the Arbitrator released a 94-page decision in which she dismissed BBL’s claim and awarded Varcon $1,048,351.93 on its counterclaim with interest at the rate of 2% per annum from May 22, 2020 to November 4, 2021 in the amount of $30,502.73, and thereafter at the rate of 2% per annum, calculated at $57.44 per day, until payment is made. Applying article 24.03 of the Construction Contract, the Arbitrator held that each party bore its own costs of the arbitration.
[18] All of the evidence before the Arbitrator was filed for the purpose of BBL’s leave to appeal Application.
C. Facts
[19] The following factual narrative sets out the findings of fact made by the Arbitrator based on the evidence from the witnesses that she found credible and worthy of belief.
[20] Shannex Inc. is a Nova Scotia corporation that directly, or through a related company, owns and operates seniors’ residences in Nova Scotia, New Brunswick. In or about 2017, Shannex decided to expand its operations into Ontario. The owners of Shannex own BBL, which constructs the residences.
[21] On June 26, 2017, Mr. Dixon of BBL and Mr. Riccio of Varcon had a meeting about Shannex’s plans to operate in Ontario. The next day, Mr. Dixon emailed Mr. Riccio and offered an exclusive 90-day request to submit a bid for the Shannex Ajax Shell Contract project.
[22] The bid was to be based on criteria outlined in the email, including BBL’s scheduling plan to apply for: (a) a building permit by September 2017; (b) a structural permit by November 2017; and (c) a full building permit and site plan approval by January 2018. The building schedule specified excavation and shoring to commence in July 2018, concrete to begin in August 2018, rough-ins to begin in March 2019, and the structure to be completed by July 2019. BBL had retained Jablonsky, AST and Partners as structural engineer to design the building structure and prepare permit drawings for the foundation and super-structure permits. BBL expected Varcon to use Jablonsky to prepare the construction detail drawings.
[23] On August 1, 2017, BBL issued a purchase order for Jablonsky to finalize the complete set of design working drawings to building permit level, and to prepare a complete set of design working drawings and specifications coordinated with all consultants.
[24] On August 31, 2017, BBL retained Terraprobe Inc. as its general project engineer and BBL filed a commitment to review its project with the Town of Ajax.
[25] On November 24, 2017, Varcon delivered its first bid at a price of $23,994,000. Varcon’s quote carried $300,000 for the cost of dewatering the excavation site based on a design of a four-level underground parking garage. Varcon considered a geotechnical report of Soil-Mat Geotechnical Investigation and a hydrogeological report of MTE Consultants Inc. in preparing its bid.
[26] On November 29, 2017, BBL rejected Varcon’s quote because the price was too high.
[27] BBL amended its design to reduce the parking from four levels to two levels so that the excavation would be above groundwater, and on January 30, 2018, Mr. Dixon informed Mr. Forde of Varcon of the revised plans. The revised plan placed the excavation above the water-table. A two-level excavation would reduce the cost of excavation by removing a substantial portion of the dewatering requirements. Varcon reduced its pricing in light of this information.
[28] On February 8, 2018, BBL sent Varcon revised drawings reducing the underground parking structure to two levels.
[29] On March 1, 2018, Shannex as owner contracted with BBL as contractor to build a 14-story building to be operated as a seniors’ residence. A related Shannex company entered into a fit-up contract with BBL on the same date.
[30] Varcon prepared a revised quote for the project in Ajax, and on April 6, 2018, Varcon submitted a revised quote for $21,375,379.00 based on the February 8, 2018 drawings.
[31] BBL produced further revised drawings in April 2018 and Varcon submitted a further revised quote for $22,121,897.00 net of HST.
[32] On June 19, 2018, with no agreement having yet been reached between BBL and Varcon, Mr. Dixon wrote to Angelo Riccio and stated: “if we cannot have signed contracts by Friday, we are putting this project aside for this year.”
[33] Throughout the negotiations between November 2017 and July 12, 2018, BBL provided Varcon seven drafts of the proposed construction contract. There were extensive negotiations about the language of the contract.
[34] On July 12, 2018, the parties signed a Construction Contract. The contract is dated April, 10, 2018. The Arbitrator found that the date of the contract was an error and inadvertently not corrected to reflect the true date of the signing of the contract. The Arbitrator found that there were no binding obligations between the parties before it was actually signed.
[35] The relevant provisions of the Construction Contract are set out in Schedule “A” to these Reasons for Decision.
[36] The Arbitrator found that the Construction Contract was impossible to perform as written from the outset. The project was behind its proposed schedule from the start.
[37] In the months that followed the signing of the Construction Contract, Varcon submitted revised subcontractor schedules to BBL on several occasions. These schedules provided for extended deadlines to complete the Construction Contract milestones. While BBL did not sign and return signed copies of the new proposed schedules, it did not reject them either, and Varcon continued to perform the Construction Contract work.
[38] Pursuant to article 2.09 of the Construction Contract, Varcon was responsible to obtain and pay for permits required to perform Varcon’s scope of work, except where the contract provides otherwise. Schedule C, article 2.1.19 excluded from Varcon’s scope of work applying for and obtaining building permits. In the Arbitration, BBL asserted that under the construction contract, Varcon was solely responsible for obtaining the building permits. The Arbitrator found that this assertion, however, was belied by BBL’s conduct. BBL applied for all the permits, and it never asked Varcon to submit drawings to the Town. BBL used Jablonsky to submit the drawings based on BBL’s design. BBL had applied for the shoring permit before contracting with Varcon. It was BBL that applied for the permits for the foundation, super-structure, and the P2 underground parking.
[39] On July 16, 2018, the Town of Ajax issued a partial foundation permit, and Varcon began work with the installation of temporary fencing and the mobilization of equipment.
[40] On October 10, 2018, while drilling piles, Varcon encountered water rising one to three feet above the level of the proposed slab on the north side of the site.
[41] On October 11, 2018, BBL stated that Varcon was contractually responsible for all dewatering costs.
[42] Varcon’s general site superintendent Mark Beatty wrote to BBL’s Adam Mitchell on October 18, 2018, to advise BBL that the site may need dewatering.
[43] On November 5, 2018, Varcon submitted a revised subcontractor schedule and continued to work on the project. The schedule extended milestone #7 (watertight) completion date from September 30, 2019 to November 12, 2019. BBL did not deliver a notice of non-conformance or reject Varcon’s proposed schedule. Varcon continued with its work on the project.
[44] Hydrogeologist Ed Wong of Edward Wong & Associates attended the site on November 20, 2018. Mr. Wong produced his report of site observations on November 29, 2018. Dewatering using deep wells was required at a significantly higher cost to Varcon than anticipated.
[45] Beginning in January 2019, the owner, architect, and contractors (the “OAC Committee”) met monthly from January 17, 2019 through February 21, 2020.
[46] On April 5, 2019, BBL applied for the P2 building permit, which it provided to Varcon on May 1, 2019.
[47] On June 12, 2019, Varcon submitted a revised subcontractor schedule and it continued to work on the project. This schedule extended the milestone #7 (watertight) completion date from September 30, 2019 to December 16, 2021. BBL did not deliver a notice of non-conformance or reject the proposed schedule.
[48] On June 30, 2019, BBL provided Varcon with the site services permit that it had applied for and obtained from the Town of Ajax.
[49] On September 26, 2019, Mr. Dixon notified Mr. Riccio that he would be visiting the site in November and that he wished to finalize the construction schedule.
[50] On October 25, 2019, Varcon submitted a revised subcontractor schedule and continued to work on the project. The revised schedule maintained the milestone #7 (watertight) completion date as December 16, 2021. BBL did not deliver a notice of non-conformance or reject the proposed schedule. Varcon continued with its work on the project.
[51] On December 12, 2019, Varcon submitted a revised subcontractor schedule and continued to work on the project. In it, the milestone #7 (watertight) completion date was moved up to September 17, 2021. BBL did not reject Varcon’s schedule, nor did it issue a notice of non-conformance. Varcon continued with its work on the project.
[52] On January 23, 2020, Mr. Dixon sent an email message to Mr. Riccio requesting a meeting to discuss Varcon’s proposed revised schedule. Mr. Dixon wrote: “Progress is a little slower than I would like but as long as we start building tables on the first main floor section by the end of February (2020), the south end of the garage will follow in March (2020). I will be back up in 2 weeks and catch up with you then”.
[53] Mr. Riccio and Mr. Dixon met on February 7, 2020. Mr. Riccio’s evidence, not challenged in cross-examination, was that Mr. Dixon verbally accepted Varcon’s proposed schedule. Mr. Riccio deposed that Mr. Dixon’s main concern was avoiding extra costs for winter protection and achieving a watertight structure by March 2021.
[54] On March 5, 2020, the parties met again at a meeting attended by Mr. Dixon and others from BBL and by Mr. Riccio and others from Varcon. At this meeting BBL delivered a notice of non-conformance to Varcon. The notice of non-conformance listed six items, namely: (1) the risk of putting the shell into a second winter construction as a result of Varcon’s lack of control over structural design and related construction; (2) Varcon’s failure to pay its forming sub-subcontractor such that it might not be able to complete the project; (3) many of Varcon’s demand amounts were excessive; (4) unsafe conditions for inspections; (5) Varcon’s failure to request information regarding the roof, delaying the full building permit; and (6) Varcon had caused delay in transmitting the AWD Railing shop drawings to BBL for delivery to the Town of Ajax, thereby delaying the full building permit.
[55] On March 14, 2020, Varcon responded to the notice of non-conformance by letter, and, among other things, Varcon submitted that BBL had breached the contract.
[56] On March 19, 2020, BBL terminated the Construction Contract by serving a notice of termination that reiterated the items of the notice of non-conformance. BBL also served a Notice of Arbitration.
[57] Mr. Riccio deposed that BBL terminated the contract because it did not want to pay Varcon for CCR011-RO for extra rebar. He said that Varcon was at all material times prepared to perform its scope of work, with the matter of the rebar going to a ruling under the dispute resolution provisions of the contract. Mr. Riccio’s evidence was unchallenged. He was not cross-examined. The Arbitrator found that Varcon did not threaten to stop work if BBL did not sign CCR011-RO. The contract provided for a dispute resolution procedure in the event the parties could not agree on a price for the additional rebar.
[58] After terminating the Construction Contract with Varcon, BBL replaced Varcon with Traugott Building Contractors Inc. to complete Varcon’s work on the project.
[59] On April 14, 2020, the parties appointed Carol A. Albert as Arbitrator. Ms. Albert is a former Master of the Superior Court of Justice, who retired in 2018. As a Master, she specialized in construction lien litigation.
[60] On May 13, 2020, Shannex and Shannex RLC gave notice to BBL claiming damages arising from BBL’s failure to complete the Base Building Contract and the FitUp Contract on time. On the same date, they agreed to be bound by the findings in the arbitration.
D. The Arbitrator’s Award
[61] Based on the above findings of fact, the Arbitrator came to the following conclusions about the issues in dispute at the arbitration.
[62] The Arbitrator concluded that the rights and obligations of the parties began on July 12, 2018 when the contract was signed. Before that date, BBL had no enforceable obligation for services and materials and BBL could have entered into a construction contract with a different contractor. BBL’s argument that Varcon should have been carrying out preparatory work as of April 10, 2018 was wrong, as was any calculation of delay from that date.
[63] The Arbitrator concluded that the Construction Contract between BBL and Varcon was a construction contract, not a design build contract. She concluded that “design build” is a term of art in the construction industry and the Construction Contract between BBL and Varcon was not the standard contract utilized in design build projects. The contract did not specify itself as a design build contract, and structural design to permit level was specifically excluded from the scope of work.
[64] The Arbitrator concluded that under the Construction Contract, BBL was responsible for structural design including submitting drawings to the Town of Ajax for issuance of the permits for excavation, shoring, underground foundation, and super-structure. BBL required Varcon to use Jablonsky as its structural engineer for the elements within Varcon’s scope of work. The Arbitrator concluded that Varcon’s design role was limited to finalizing shoring and structural details. She held that Varcon was not responsible for building design or for applying for and obtaining permits.
[65] The Arbitrator concluded that under the Construction Contract, Varcon was required to comply with the schedule for the milestones. However, the milestone deadlines in the contract were unreasonable, unrealistic, and impossible to meet from the outset. Applying the modern trend in contract interpretation as explained in Sattva Capital Corp. v Creston Moly Corp.,[^3] at the time of contracting, the Arbitrator held that the milestones could not possibly have been achieved given the state of BBL’s permit applications, its changes to design, and the unreasonably short timeframes allotted for Varcon to complete the various stages of construction. She reasoned that interpreting the contract in a manner that compels compliance with unachievable milestones leads to a commercial absurdity, particularly when the contract can support an interpretation that allows for schedules to be submitted from time to time.
[66] The Arbitrator held that notwithstanding the wording of the contract, neither party conducted itself as if extensions of deadlines required written approval. Varcon submitted several revised schedules, and the parties carried on without any objection by BBL, which continued to make payments to Varcon. The Arbitrator held that by accepting Varcon’s schedules from time to time and allowing Varcon to continue, BBL by its conduct had acquiesced and acknowledged the extended milestones, even though it did not formally accept the schedules in writing. She concluded that the parties conducted themselves in a manner consistent with having extended the deadlines, and in particular the deadline to achieve a watertight structure into the 2020-2021 winter season. Alternatively, it would have been a breach of its good faith requirements if BBL extended the milestone completion dates and then sought to enforce the original deadlines.
[67] The Arbitrator concluded that Varcon was unable to achieve the milestones for many reasons including: (a) the milestone deadlines were unreasonable and unachievable; (b) both parties expected that the foundation would be above groundwater and would not require deep wells for dewatering; (c) the site conditions were different from the conditions represented by BBL and upon which Varcon priced the work, resulting in an expanded scope of work to prepare the site for excavation and building foundation structure; (d) BBL failed to provide required permits and workable drawings when required and Varcon commenced excavation and shoring without permit drawings in hand that matched Varcon’s construction engineer’s detail drawings; and (e) BBL changed the design and, in some instances, failed to give notice of the changes to Varcon.
[68] The Arbitrator held that none of the six grounds of termination recited in the notice of non-conformance were proven. The Arbitrator concluded that Varcon did not default in its obligations under the contract. Rather, BBL breached the contract by terminating Varcon without sufficient cause or by failing to give Varcon proper notice and an opportunity to rectify.
[69] The Arbitrator concluded that BBL is not entitled to the costs of completing the project pursuant to the termination provision of Article 3.00 because a party in breach cannot rely on this provision and because BBL’s notice of non-conformance did not give proper notice and there were no grounds to justify termination.
[70] On the issue of delay in general, the Arbitrator held that BBL contributed significantly to the delay on the project and cannot rely on it as cause for termination. Delay damages attributable to Varcon did not reach the 15% threshold required to terminate Varcon as subcontractor under the Construction Contract. She held that BBL failed to provide design elements and permits in time for Varcon to meet the contract milestones, but both parties contributed to delays in issuance of permits. She held that the absence of required information and permits from BBL contributed significantly to Varcon’s inability to meet the contract milestones and any delay arising from obtaining the building permit was BBL’s responsibility.
[71] The Arbitrator concluded that BBL’s claim for Shannex’s economic losses would have failed. She found that there was no evidence that BBL has paid any indemnification to Shannex, and, in any event, Varcon was not liable to indemnify BBL for such losses. BBL was engaging in a shell game, claiming a liability when it had not incurred damages.
[72] The Arbitrator held that BBL was liable to Varcon for damages for damages flowing from the breach including loss of profit.
[73] The Arbitrator concluded that BBL owes Varcon for services and materials supplied and not paid for, and for changes to the scope of contract work and for extras in the amount of $2,373,546.59 including HST. She held that article 20.04’s stipulation that Varcon forfeit claims in the absence of notice applies if the contract remains ongoing through to completion, but where BBL terminated the Construction Contract, article 20.04 did not preclude a claim for additional costs or damages.
[74] The Arbitrator concluded that the site conditions proved different from the conditions represented by BBL and upon which Varcon priced the work, resulting in an expanded scope of work to prepare the site for excavation and building the foundation structure. She held that Varcon was entitled to be compensated for a portion of the additional costs incurred as a result of this change in site condition. The email exchange on October 10, 2018 and October 11, 2018 was sufficient notice to BBL that Varcon would be claiming an extra contract charge for dewatering. She held that Varcon was entitled to its costs for dewatering using a deep well system and is entitled to be paid for the additional cost of dewatering above $10,000.00; i.e., $290,000 as an extra. Varcon was entitled to only half of its claim for additional equipment costs of $849,539.90.
[75] The Arbitrator concluded that the notice provisions of article 4.04 did not apply to preclude Varcon’s claim for delay damages. The items that caused delay were not defects in the work of other subcontractors, but rather delays by: (a) BBL’s delay producing documents, information, and permits required for Varcon to proceed; and (b) BBL’s misrepresentation as to the groundwater level and dewatering requirements. In any event, she held that Varcon gave notice of its claim as evidenced by an email chain (July 25, 2019 to July 30, 2019) between Mr. Riccio and Mr. Dixon regarding BBL’s proposal to change the design of a portion of the underground structure. Varcon gave BBL notice sufficient to meet the requirements of article 20.01.
[76] The Arbitrator concluded that Varcon proved a loss of profit of $75,000 plus HST.
[77] The Arbitrator concluded that BBL was entitled to set off payments it made directly to Varcon’s sub-subcontractors in the amount of $1,402,444.66.
[78] The Arbitrator concluded that Varcon was correct that pursuant to article 24.03 of the contract each party was required to bear its own costs for the arbitration and that BBL was not entitled under the indemnification provision, article 16.00, to be indemnified for its legal fees for the arbitration regardless of the outcome. She held that this was not a matter of contra proferentem but a matter of the specific provision superseding the general provision and it was a matter of interpreting the indemnification provision. The provisions could be read together, and the indemnification provision did not apply but was designed for different circumstances. If the indemnity provision had applied, there was a discretion to not indemnify Varcon that would have been exercised in this case.[^4]
E. The Asserted Categorial Errors of Law
[79] In its factum, BBL submits that because the Arbitrator failed to interpret and apply the contract based on the express words of the Construction Contract in accordance with the governing principles of contractual interpretation, the Arbitrator made multiple errors of law.
[80] In its factum, BBL identified 45 instances (items alphabetized “a” to “ss”) where the Arbitrator arguably made multiple extractable errors of law.
[81] BBL submits that the Arbitrator’s multiple errors in law can be categorized into 16 categories as follows:
I. failing to consider a relevant factor in interpreting the Agreement;
II. failing to consider a clause in the context of the entirety of the Agreement;
III. looking outside the Agreement for assistance in the interpretive exercise without first concluding that the Agreement reveals an ambiguity;
IV. considering extrinsic evidence where the Agreement is clear and unambiguous on its face;
V. re-writing the Agreement for the parties;
VI. failing to apply the cardinal presumption that the parties intend/mean what they say in the Agreement;
VII. failing to examine the language of the Agreement in the context of the circumstances as they existed when the Agreement was created;
VIII. minimizing or eliminating the import of words in the Agreement and failing to give meaning and effect to particular phrases when interpreting the Agreement;
IX. failing to properly apply the commercial efficacy principle;
X. failing to apply the appropriate principles of contractual interpretation resulting in an interpretation inconsistent with the wording of the Agreement;
XI. failing to consider the Agreement as a whole by focusing on one provision without giving proper consideration to the other relevant provisions;
XII. failing to consider specific clauses in the Agreement that contradict the Arbitrator’s findings and failing to indicate that those clauses were taken into account when interpreting the Agreement;
XIII. misapprehending the evidence by relying on irrelevant factors;
XIV. misapprehending the evidence in a way that is obvious and goes to the very core of the outcome of the case;
XV. making findings that are clearly wrong, unreasonable, and not reasonably supported by the evidence; and,
XVI. placing too much emphasis on the credibility of Dixon and failing to prefer and rely upon the documents.
[82] In the chart below, which I derived from BBL’s factum, I set out: (a) the paragraphs of the Arbitrator’s award that BBL impugns as erroneous; (b) the associated article of the Construction Contract that BBL asserts has been erroneously interpreted; (c) BBL’s description of the error; and (d) BBL’s categorization of the errors of law using its 16 categories of errors of law.
| Item | Award Paragraph | Construction Contract Article | Description of Error | Error Categories |
|---|---|---|---|---|
| a. | 26 120 |
2.02 2.13 2.14 |
Finding that neither party had any enforceable contractual rights or obligations prior to July 12, 2018 and that the parties’ rights and obligations only began on that date in light of the findings of fact regarding the factual matrix (the proposals submitted by Varcon and the seven drafts that were exchanged by the parties that set out the timeline) and in the face of articles 2.02, 2.13 and 2.14. | 5 errors: I, VI, VII, X, XIV |
| b. | 33 36 |
2.08 2.15 2.16 2.17 2.18 2.19 14.01(d) 1.3.1 1.3.2 2.1.2 2.1.19 |
Comparing the Construction Contract to the “standard industry contract” in design build projects (CCDC-14) and using that to conclude that the Construction Contract is not a design-build contract in the face of articles 2.08, 2.15, 2.16, 2.17, 2.18, 2.19, 14.01(d) 1.3.1, 1.3.2, 2.1.2 and 2.1.19 (the “Design Provisions”). | 8 errors: III, IV, V, VI, VIII, X, XII, XIII |
| c. | 34 35 266 267 |
2.08 2.15 2.16 2.17 2.18 2.19 14.01(d) 1.3.1 1.3.2 2.1.2 2.1.19 |
Finding that “BBL was responsible for the building design and for almost all design aspects” and that “Varcon was not responsible for building design in the face of the Design Provisions. | 7 errors: I, III, IV, V, VI, VIII, X |
| d. | 37 | 2.09 | Failing to properly interpret and give effect to the unambiguous words of article 2.09 | 10 errors: I, II, IV, V, VI, VII, VIII, X, XI, XII |
| e. | 51 215 |
4.04 | Failing to properly interpret and give effect to the unambiguous words of article 4.04 | 10 errors: I, II, IV, V, VI, VII, VIII, X, XI, XII |
| f. | 52 | 4.05 | Failing to properly interpret and give effect to the unambiguous words of article 4.05 | 10 errors: I, II, IV, V, VI, VII, VIII, X, XI, XII |
| g. | 54 55 56 |
4.06 7.03 |
Failing to properly interpret and give effect to the unambiguous words of articles 4.06 and 7.03 | 10 errors: I, II, IV, V, VI, II, VIII, X, XI, XII, |
| h. | 79 | Making unjustified conclusions regarding the facts, contrary to the express language of the Construction Contract itself, based on conclusions regarding Dixon’s testimony | 14 errors: I, III, IV, V, VI, VII, VIII, IX, X, XII, XIII, XIV, XV, XVI |
|
| i. | 115 127 |
2.02 2.13 2.14 27,00 2.1.16 |
Relying on purported oral representations regarding groundwater contrary to the provisions of articles 2.02, 2.13, 2.14, 27,00, and 2.1.16 (the “Dewatering Provisions) | 12 errors: III, IV, V, VI, VII, VIII, IX, X, XIII, XIV, XV, XVI |
| j. | 134 164 |
2.09 2.1.2 |
Interpreting Schedule C “to mean that BBL excluded permit applications from Varcon’s scope of work and finding that BBL was responsible for obtaining building permits contrary to the unambiguous words of articles 2.09 and 2.1.2. | 14 errors I, II, III, IV, V, VI, VII, VIII, X, XI, XII, XIII, XIV, XV |
| k. | 137 139 |
1.19 2.08 2.13 2.20 2.21 2.1.2 2.1.3 Scope p.43 |
Finding that BBL knew or ought to have known that Varcon had retained HC Matcon and RWH Engineering to prepare the detailed design drawings for the shoring system in the face of the express obligations regarding drawings for the Project set out in article 1.19, 2.08, 2.13, 2.20, 2.21, 2.1.2, 2.1.3, and Scope p.43 | 7 errors: I, V, VI, VII, VIII, X, XIV |
| l. | 143 | 1.19 2.08 2.13 2.20 2.21 2.1.2 2.1.3 Scope p.43 |
Relying on the comparison of the drawings provided to Varcon on April 11, 2018, to the actual structural drawings in the face of the express obligation on Varcon to prepare drawings in articles 1.19, 2.08, 2.13, 2.20, 2.21, 2.1.2, 2.1.3, and Scope p. 43 | 11 errors: I, II, IV, V, VI, VII, VIII, X, XIII, XIV, XV |
| m. | 148 149 150 151 152 153 |
1.13 1.17 4.01 4.03 4.04 8.00 10.01 10.02 |
Relying on purported delay on the part of BBL in providing “drawings, information and permits from BBL” contrary to articles 1.13, 1.17, 4.01, 4.03, 4.04, 10.01, 10.02 and despite Varcon’s failure to comply with article 8.00. | 10 errors: I, II, V, VI, VIII, X, XI, XII, XIV, XV |
| n. | 172 | 1.04 1.16 4.06 4.11 |
Finding that “BBL had verbally and by its conduct accepted Varcon’s proposed December 12, 2019 schedule” contrary to the express requirements in articles 1.04, 1.16, 4.06, and 4.11. | 14 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV, XVI |
| o. | 173 | 25.00 27.00 |
Finding that the Construction Contract milestone deadlines “had been waived” in the face of 25.00 and 27.00. | 14 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV, XVI |
| p. | 176 | 1.09 11.13 4.01 4.02 4.05 4.06 7.03 25.00 27.00 |
Finding that the Notice of non-conformance was “tantamount to acknowledging that the Construction Contract milestones were unrealistic and the parties, by their conduct, had extended them” in the face of the unambiguous words in 25.00 and 27.00, the requirements of regarding Varcon’s compliance with the timeline 1.09, 1.13, 4.01, 4.02, 4.05, 4.06 and the plain wording of 7.03. | 13 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV |
| q. | 188 | 8.00 20.00 |
Finding that “BBL’s conduct in carrying out its contractual responsibilities contributed to Varcon’s inability to perform its scope of work within the Construction Contract timelines” despite the failure of Varcon to comply with 8.00 and 20.00. | 14 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV, XVI |
| r. | 196 | 1.09 1.13 2.02 2.13 2.14 4.00 4.01 4.02 4.05 4.06 7.03 |
Finding that it “would make no commercial sense and be commercially unreasonable to hold Varcon liable for its failure to meet an unachievable Master Schedule” in the face of the unambiguous provisions of 1.09, 1.13, 2.02, 2.13, 2.14, 4.00, in particular 4.01, 4.02, 4.05 and 4.06, and 7.03 (collectively, the “Master Schedule Provisions”). | 14 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV, XVI |
| s. | 209 | 8.00 20.00 |
Finding that “Varcon’s efforts to comply were further hindered by the absence of necessary design, drawings, permits and municipal approvals” despite the failure of Varcon to comply with 8.00 and 20.00. | 14 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV, XVI |
| t. | 213 | 8.00 20.00 |
Finding that “the meeting minutes, subcontractor schedules and email and other communications are evidence that Varcon gave BBL notice of delay in the completion dates” despite the failure of Varcon to comply with 8.00 and 20.00 | 14 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV, XVI |
| u. | 216 | 20.01 | Finding that “Varcon gave BBL notice sufficient to meet the requirements of article 20.01” [R¶216] notwithstanding the obvious failure of Varcon to comply with that section. | 13 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV |
| v. | 219 | 1.09 1.13 2.02 2.13 2.14 4.00 4.01 4.02 4.05 4.06 7.03 |
Finding that “By its conduct, BBL had approved Varcon’s proposed schedule extensions” in the face of the unambiguous provisions of the Master Schedule Provisions. | 14 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV, XVI |
| w. | 222 | 1.09 1.13 2.02 2.13 2.14 4.00 4.01 4.02 4.05 4.06 7.03 |
Finding that “BBL’s acceptance of its spreading the cost of GC’s over the next 24 months [is] written approval of an extension of the timetable” in the face of the unambiguous Master Schedule Provisions. | 13 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV, XVI |
| x. | 226 | 1.09 1.13 2.02 2.13 2.14 4.00 4.01 4.02 4.05 4.06 7.03 |
Finding that “schedule updates did not require formal Contract amendments” in the face of the unambiguous Master Schedule Provisions. | 13 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV |
| y. | 229 | 2.08 2.15 2.16 2.17 2.18 2.19 14.01(d) 1.3.1 1.3.2 2.1.2 2.1.19 |
Finding that “BBL retained control of the overarching design elements” in the face of the Design Provisions. | 13 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV |
| z. | 243 | 2.02 2.13 2.14 27,00 2.1.16 |
Finding that “Subcontractors are entitled to rely on the expert reports provided to them by the owner … and it is not the usual practice for a subcontractor to be required to (take certain steps) [R¶243]” in the face of the Dewatering Provisions. | 14 errors: I, III, IV, V, VI, VII, VIII, IX, X, XI, XII, XIII, XIV, XV |
| aa. | 251 | 2.02 2.13 2.14 27,00 2.1.16 |
Finding that “Varcon is entitled to be compensated for the additional cost to dewater and for a portion of the delay arising from it” in the face of the Dewatering Provisions. | 13 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV |
| bb. | 277 | 1.17 1.19 2.08 4.03 10.10 10.02 1.3.2 2.1.2 Scope p.43 |
Finding that BBL, not Varcon, was responsible for coordinating the “various disciplines” in the face of the obligations on Varcon set out in 1.17, 1.19, 2.08, 4.03, 10.01, 10.02, 1.3.2, 2.1.2 and Scope p.43. | 13 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV |
| cc. | 297 298 |
5.00 19.00 |
Finding that BBL was responsible for the changes necessary by virtue of the additional required re-bar in the face of Varcon’s failure to comply with 5.00 and 19.00 | 13 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV |
| dd. | 304 | 1.09 1.13 2.02 2.13 2.14 4.00 4.01 4.02 4.05 4.06 7.03 |
Finding the notice of non-conformance is “tantamount to acknowledging that the Contract milestones were unrealistic and the parties, by their conduct, had extended them” contrary to the Master Schedule Provisions. | 14 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV, XVI |
| ee. | 313 | 1.09 1.13 2.02 2.13 2.14 4.00 4.01 4.02 4.05 4.06 7.03 |
Finding “despite the wording of the Contract, neither party conducted itself as if extensions of deadlines required written approval” despite the Master Schedule Provisions. | 13 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV |
| ff. | 321 324 |
1.09 1.13 2.02 2.13 2.14 4.00 4.01 4.02 4.05 4.06 7.03 25.00 |
Finding that BBL “accepted that strict compliance with the Contract milestones was impossible and would be extended for a reasonable period of time”, “BBL by its conduct had acquiesced and acknowledged the extended milestones in writing” and “BBL, by its conduct, extended the Schedule B milestone deadlines” in the face of 25.00 and the Master Schedule Provisions. | 13 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV |
| gg. | 332 | 2.08 2.15 2.16 2.17 2.18 2.19 14.01(d) 1.3.1 1.3.2 2.1.2 2.1.19 |
Finding that “Varcon was not in control of the structural design and the delay that put the construction into a second winter season of construction” with the result that the delay in the construction was not a ground to terminate the Agreement despite the Design Provisions. | 13 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV |
| hh. | 342 | Amendment | Failing to find that the non-payment by Varcon to MMF constituted a breach of the Agreement [R¶342] in the face of the plain language in the Amendment that states that in the event of a failure to pay “Varcon will then be in default of this commitment”. | 13 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV |
| ii. | 345 | 2.08 19.00 |
Failing to find that inflated change orders do not constitute grounds to terminate the Agreement in the face of 2.08 and the failure of Varcon to comply with 19.00. | 13 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV |
| jj. | 359 | 19.00 | Failing to find that Varcon’s response to the Notice of non-conformance in which BBL “requires Varcon to immediately remove any hold on rebar required on site to progress site activities” and to “provide an updated schedule with clear indications on how lost time will be recovered”, in which Varcon “requires an approved Change Order to be able to supply and install additional rebar required to complete the project” and directs BBL to “issue a proposed Change Order in order for [Varcon] to proceed with acquiring and installing the additional rebar” constitutes grounds for termination of the Agreement due to Varcon’s failure to comply with 19.00. | 13 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV |
| kk. | 368 | 23.03 | Finding that Varcon is “entitled to damages for “any loss occasioned by such breach of contract” in the face of the unambiguous language in 23.03 | 13 errors: I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV |
| ll. | 403 409 410 |
23.03 | Finding that Varcon is “entitled to be compensated for a portion of the additional costs incurred as a result of this change in site condition (dewatering) in the face of the unambiguous language in 23.03. | 13 errors I, III, IV, V, VI, VIII, IX, X, XI, XII, XIII, XIV, XV |
| mm. | 20.04 | Failing to properly interpret and apply 20.04. | 9 errors: II, IV, V, VI, VII, VIII, X. XI, XII |
|
| nn. | 433 | Finding that “BBL appears to be engaging in a shell game” without justification. | 8 errors: V, VI, VIII, X, XII, XIII, XV, XVI |
|
| oo. | 438 | 23.03 | Finding that “BBL is liable to Varcon for damages flowing from the breach of Contract, including loss of profit” in the face of the unambiguous language in 23.03. | 12 errors: I, III, IV, V, VI, VIII, X, XI, XII, XIII, XIV, XV |
| pp. | 454 | 3.00 5.02 11.06 11.07 23.01 |
Finding that “BBL is now precluded from recovering amounts it paid to other contractors to rectify deficiencies” in the face of the unambiguous language in 3.00, 5.02, 11.06, 11.07 and 23.01 | 12 errors: I, III, IV, V, VI, VIII, X, XI, XII, XIII, XIV, XV |
| qq. | 3.00 | Failing to properly interpret and apply 3.00. | 9 errors: II, IV, V, VI, VII, VIII, X, XI, XII |
|
| rr. | 459 | 23.03 | Failing to provide any evidentiary basis for the finding that “nor did BBL terminate on 10 days’ notice pursuant to article 23.03” in the face of the uncontested evidence. | 6 errors VI, X, XI, XIII, XIV, XV |
| ss. | 471 | 16.00 24.03 |
Erring in the interpretation of 16.00 and 24.03 that “the indemnification provision applies in respect of legal proceedings involving parties other than the two parties to the Contract” | 6 errors: VI, X, XI, XIII, XIV, XV |
[83] Thus, in its factum, BBL categorized the Arbitrator’s multiple errors of law into 16 types of legal error. In its factum, it asserted that for each of 45 instances of mistakes, the Arbitrator made multiple arguable errors of law. In this regard, BBL submitted that the Arbitrator made errors ranging from a low of five categorical errors to a high of 14 categorical errors. By my count, the result is that BBL asserts that the Arbitrator made 524 arguable errors of law that would justify granting leave to appeal.
F. The Test for Leave to Appeal
[84] BBL is entitled to request leave to appeal the Arbitration award pursuant to s. 45 of the Arbitration Act, 1991, which states:
45(1) If the arbitration agreement does not deal with appeals on questions of law, a party may appeal an award to the court on a question of law with leave, which the court shall grant only if it satisfied that,
(a) the importance to the parties of the matters at stake in the arbitration justifies an appeal; and
(b) determination of the question of law at issue will significantly affect the rights of the parties.
[85] Under s. 45(1), an appeal may only be on a question of law, not a question of mixed fact and law, and if the proposed appeal involves a question of law, then subsections (a) and (b) must also be satisfied before the court can grant leave.[^5]
[86] In deciding whether to grant leave to appeal, there is no requirement that the court doubt the correctness of the arbitrator’s award; in considering whether to grant leave, the court decides only whether the matter warrants granting leave, not whether the appeal will succeed.[^6] At the leave stage, the court does not make a final determination whether an error of law was made, but the court determines whether the appeal has the potential to succeed and thus to change the result of the case.[^7] Thus, for leave to appeal, three criteria must be satisfied.
a. First, the putative appellant must identify one or more arguable errors of law as opposed to questions of fact or questions of mixed fact and law.
b. Second, the importance to the parties of the matters at stake in the arbitration must justify an appeal.[^8]
c. Third, the identified question of law must significantly affect the rights of the parties. Once a question of law has been identified, the court must be satisfied that the determination of that point of law on appeal may prevent a miscarriage of justice.[^9]
[87] Thus, whether an Arbitrator’s decision is appealable pursuant to s. 45 of the Arbitration Act, 1991 depends on identifying significant errors of law that are worthy of appeal and differentiating them from errors of fact and errors of mixed fact and law that are not appealable.
[88] In identifying and differentiating issues of law from issues of fact and issues of mixed fact and law, the following principles are helpful.
a. A questions of law concerns what is the correct legal test, and questions of mixed fact and law are questions about whether the facts satisfy the legal tests.[^10]
b. What is the correct legal test to be applied to the facts is a question of law.[^11]
c. The application of an incorrect legal standard, a failure to consider a required element of a legal test, or similar error in principle is an error in law.[^12]
d. Applying an incorrect legal principle, misapplying a principle of contractual interpretation, the failure to consider a required element of the legal test, the failure to consider a relevant factor and the failure to consider substantive elements of contract formulation are extricable errors of law.[^13]
e. A question of statutory interpretation is a question of law.[^14]
f. The question of whether the adjudicator applied the proper principles of interpretation is a question of law.[^15]
g. The failure to consider the surrounding circumstances or factual matrix of a contract is an error of law in interpreting a contract.[^16]
h. Interpretation can become a question of law as soon as the true meaning of the words in which an instrument has been expressed and the surrounding circumstances, if any, have been ascertained as facts.[^17]
i. A denial of natural justice is a question of law.[^18]
j. Matters of mixed fact and law lie along a spectrum; where the legal principle is not readily extricable, then the matter is one of mixed law and fact.[^19]
k. If fact finding is integral to the ultimate determination of the question, the question is an issue of mixed fact and law.[^20]
l. The question whether the parties had concluded a binding and enforceable contract is a question of mixed fact and law.[^21]
m. The question of how the adjudicator applies the proper principles of contract interpretation is a question of mixed fact and law and the interpretation of a contract is a mixed question of fact and law.[^22]
n. The question whether a contract has been breached or repudiated is a question of mixed fact and law.[^23]
o. Whether the facts satisfy the legal test is a question of mixed fact and law.[^24]
p. The question of whether a party satisfied or breached the appropriate standard of care is a question of mixed fact and law.[^25]
q. Questions of fact involve questions about what actually took place between the parties.[^26]
r. What constitutes the surrounding circumstances, the nexus for contractual interpretation, is a question of fact.[^27]
G. Discussion and Analysis
[89] As noted above, questions of contract interpretation and questions about whether a contract has been breached are questions of mixed fact and law. Extracting an error of law from an arbitrator’s decision about the interpretation of and the performance of the terms of a contract in a breach of contract dispute is a very difficult assignment.
[90] In Sattva Capital Corp. v. Creston Moly Corp.,[^28] which, like the case at bar, was a case involving the appeal of an arbitrator’s decision, the Supreme Court of Canada changed the Canadian law with respect to the characterization of errors of contract interpretation. Before Sattva, errors in contract interpretation were categorized as errors of law. After Sattva, with several exceptions such as for widely used standard form contracts, errors of contract interpretation were categorized as mixed errors of fact and law, unless a pure question of law could be identified and extracted. In Sattva, Justice Rothstein explained that the goal of contractual interpretation, which is to ascertain the objective intentions of the parties, is inherently fact specific and that courts should be very cautious in identifying extricable questions of law in disputes over contractual interpretation.[^29]
[91] Law professor John D. McCamus in a paper presented for the renowned Pitblado Lectures discusses what he describes as the striking departure in the Sattva decision, from English common law doctrine that contract interpretation is an issue of law.[^30] Professor McCamus writes:
The striking departure from English doctrine in Sattva pertained to the characterization of questions of interpretation for purposes of determining the scope of appellate review. In traditional English doctrine, questions of contractual interpretation are considered to be questions of law and, accordingly, are subject to appellate review on that basis. […] In Sattva, the Court held that matters of interpretation should no longer be considered to be questions of law. Rather, they should be characterized as questions of mixed fact and law. Rothstein J. opined that, “the historical approach should be abandoned” on the basis that, “[c]ontractual interpretation involves issues of mixed fact and law as it is an exercise in which the principles of contractual interpretation are applied to the words of the written contract, considered in light of the factual matrix.” By way of exception to the new approach, the Court acknowledged that in unusual circumstances, it may be that an identifiable and extricable question of law may be drawn out of what was initially characterized as a question of mixed fact and law. The result in Sattva, then, was to substantially restrict the possibility of appellate review in matters of contract interpretation. […] [T]here is no question but that on issues of appellate review of contractual interpretation, Canadian law has substantially departed from the English approach.
[92] For present purposes, I emphasize Professor McCamus’ conclusion that the result in Sattva was a substantial restriction of appellate review in matters of contract interpretation, which is a conclusion that has been borne out in the subsequent Supreme Court of Canada cases applying and explaining Sattva.[^31] In so far as appeals are concerned from an adjudicator’s decision, contract interpretation is now very rarely an issue of pure law or an extractable issue of pure law drawn from an issue of mixed fact and law. Court intervention in the interpretation of contracts by Arbitrators is and should be rare and contracting parties are entitled to have their contractual disputes decided by the arbitral process they agreed upon.[^32] In Sattva Capital Corp. v. Creston Moly Corp., Justice Rothstein stated at paragraphs 54-55:
- […] The warning expressed in Housen to exercise caution in attempting to extricate a question of law is relevant here:
Appellate courts must be cautious, however, in finding that a trial judge erred in law in his or her determination of negligence, as it is often difficult to extricate the legal questions from the factual. It is for this reason that these matters are referred to as questions of “mixed law and fact”. Where the legal principle is not readily extricable, then the matter is one of “mixed law and fact” . . . . [para. 36]
- Although that caution was expressed in the context of a negligence case, it applies, in my opinion, to contractual interpretation as well. As mentioned above, the goal of contractual interpretation, to ascertain the objective intentions of the parties, is inherently fact specific. The close relationship between the selection and application of principles of contractual interpretation and the construction ultimately given to the instrument means that the circumstances in which a question of law can be extricated from the interpretation process will be rare.
[93] In Teal Cedar Products Ltd. v. British Columbia,[^33] a Supreme Court of Canada case that followed and applied Sattva Capital Corp., Justice Gascon stated at paragraph 45:
- Courts should, however, exercise caution in identifying extricable questions of law because mixed questions, by definition, involve aspects of law. The motivations for counsel to strategically frame a mixed question as a legal question — for example, to gain jurisdiction in appeals from arbitration awards or a favourable standard of review in appeals from civil litigation judgments — are transparent (Sattva, at para. 54; Southam, at para. 36). A narrow scope for extricable questions of law is consistent with finality in commercial arbitration and, more broadly, with deference to factual findings. Courts must be vigilant in distinguishing between a party alleging that a legal test may have been altered in the course of its application (an extricable question of law; Sattva, at para. 53), and a party alleging that a legal test, which was unaltered, should have, when applied, resulted in a different outcome (a mixed question).
[94] In the immediate case, BBL can be admired for its effort, but it fails in the very much uphill task and uphill legal battle of extracting a question of law from a question of mixed fact and law. In the immediate case, although BBL cluster bombs the Arbitrator’s decision with assertions of 45 instances of errors and 224 categorical mistakes in legal principles, the essence of BBL’s argument for leave to appeal just comes down to an argument that the Arbitrator erred by looking to extrinsic facts to read the contract differently than what it plainly says. The alleged fundamental error of the Arbitrator is how she dealt with the facts. BBL asserts that the Arbitrator misapplied the factual nexus in the exercise of contract interpretation. That assertion is the nucleus of 13 of the categorial errors asserted by BBL (I, III, IV, V, VI, VII, VIII, IX, X, XIII, XIV, XV, and XVI) against the Arbitrator’s decision. Failing to consider a contract clause in the entirety of the agreement is the nucleus of the remaining three categorial errors (II, XI, and XII), which assertion is not far from the assertion that the Arbitrator erred by reading the contract differently than what it plainly says because of her use of extrinsic evidence.
[95] Thus, BBL’s leave to appeal Application essentially relies on its version of the principles of plain meaning in construing a contract and its assertion that the Arbitrator was mistaken in her finding of facts and use of extrinsic facts in interpreting the Construction Contract. But all BBL has actually accomplished is just to identify questions of mixed fact and law not to extract legal issues. In my opinion, notwithstanding its admirable herculean effort to demonstrate that the Arbitrator mishandled the facts in her analysis of the competing breach of contract claims, it is BBL that is in error about the role of the facts in the determination of a breach of contract dispute. Upon analysis of BBL’s argument, it emerges that it relies on plain meaning to the exclusion of any surrounding facts known to the parties at the time of the making of the contract and to the exclusion of any surrounding facts that happened during the performance of the contract. This is just a wrong argument. BBL has not demonstrated that there is an arguable ground of appeal in the immediate case.
[96] To repeat, the major thrust of BBL’s arguments is that the Arbitrator erred in her use of extrinsic evidence. In this regard, BBL argues that the Arbitrator erred by: (a) referring to facts that happened after the contract was signed; and (b) referring to extrinsic facts outside the plain wording of the Construction Contract without first determining that the contract was ambiguous. There are at least two major doctrinal or analytical mistakes or fallacies in BBL’s attempt to extract an arguable legal error from the 45 instances of alleged arguable errors.
[97] The first major doctrinal and analytical error made by BBL is failing to differentiate findings of fact for the purpose of interpreting a contract, which is a question of mixed fact and law, from findings of fact for the purpose of determining whether a contract has been breached or repudiated, which is a different type of question of mixed fact and law.
[98] For the present purposes of explaining why I do not find an extractable error of law in the immediate case, it is useful to examine more closely BBL’s doctrinal or analytical error that concerns the difference of findings of fact: (a) for the purposes of interpretation, and (b) for the purposes of determining whether a contract has been breached. Thirty-seven of BBL’s 45 items of asserted arguable Arbitrator error concern matters of whether the contract has been breached,[^34] which is a question that is closely related to but ultimately different from questions of contract interpretation in so far as findings of fact and questions of mixed fact and law are concerned. Three of BBL’s 45 items of asserted Arbitrator error concern questions of fact.[^35] Only five of BBL’s 45 items of asserted arguable Arbitrator error concern matters of the use of extrinsic evidence in pure contract interpretation.[^36]
[99] BBL submits that the Arbitrator’s demonstrable references to extrinsic evidence are extractable arguable issues of pure law for which leave to appeal should be granted. The fallacy here, however, is that in referring to the evidence of what happened after the contract was signed, the Arbitrator was not engaged in the exercise of just determining the meaning of the words in the contract at the time the contract was signed; rather, she was engaged in determining whether Varcon’s performance of the Construction Contract was a breach of contract.
[100] Moreover, Canadian law accepts that the subsequent conduct of the parties in performing the contract may inform what was intended by the parties at the time of the signing of the contract.[^37] In Re Canadian National Railway and Canadian Pacific Ltd.,[^38] Justice Lambert for the British Columbia Court of Appeal stated at p. 262:
In Canada the rule with respect to subsequent conduct is that if, after considering the agreement itself, including the particular words used in their immediate context and in the context of the agreement as a whole, there remain two reasonable alternative interpretations, then certain additional evidence may be both admitted and taken to have legal relevance if that additional evidence will help to determine which of the two reasonable alternative interpretations is the correct one. It certainly makes no difference to the law in this respect if the continuing existence of two reasonable alternative interpretations after an examination of the agreement as a whole is described as doubt or as ambiguity or as uncertainty or as difficulty of construction.
[101] It is obvious that it is not an error in determining whether a contract has been breached or whether there is a defence to the breach, for example, by performance, amendment to the contract, acquiescence, promissory estoppel, or waiver, to refer to the evidence of what happened after the contract was signed and to refer to evidence of how the contract was performed.
[102] Item “n” in the chart above is an example of BBL’s failure to differentiate extractable errors of law about contract interpretation and extractable errors of law about breach of contract. With respect to item “n”, BBL asserts that the Arbitrator erred in 14 categories of extractable errors of law by finding that “BBL had verbally and by its conduct accepted Varcon’s proposed December 12, 2019 schedule” contrary to the express requirements in articles 1.04, 1.16, 4.06, and 4.11.”
[103] Item “n” also provides an example of BBL’s second doctrinal error. With respect to item “n”, in my opinion, there is no extricable issue of pure law in the Arbitrator’s use of extrinsic evidence and it was not necessary for her to first determine that there was an ambiguity (categorical error III) in the Construction Contract before making her finding of mixed fact and law that BBL had accepted Varcon’s proposed December 12, 2019 schedule and accordingly Varcon was not in breach of contract.
[104] BBL’s misunderstanding of the role of ambiguity is the other major doctrinal and analytical error. BBL is incorrect in arguing that it is an extractable issue of pure of law and an error for an adjudicator to look outside the Construction Contract for assistance in the interpretive exercise without first concluding that the Construction Contract reveals an ambiguity. To the contrary, it is ancient and venerable law that existed long before Sattva Capital Corp. v Creston Moly Corp.,[^39] but that Justice Rothstein reiterated and explained in that case that ambiguity is not a prerequisite to the use of extrinsic evidence to interpret a contract in its factual nexus.
[105] In Sattva Capital Corp., Justice Rothstein explained that all contracts must be interpreted in a factual nexus. He explained that there is no preclusion of this necessary phenomenon of contract interpretation by the parol evidence rule, and there is no prerequisite that the court find ambiguity before looking outside the wording of the contract to determine its factual nexus. Evidence of context is always admissible whether or not the language of the agreement is ambiguous. BBL’s misunderstanding of this fundamental principle undermines its assertion of Arbitrator error.
[106] In Sattva Capital Corp., Justice Rothstein stated at paragraphs 56-61 [citations omitted]:
The Role and Nature of the “Surrounding Circumstances”
I now turn to the role of the surrounding circumstances in contractual interpretation and the nature of the evidence that can be considered. […]
While the surrounding circumstances will be considered in interpreting the terms of a contract, they must never be allowed to overwhelm the words of that agreement […]. The goal of examining such evidence is to deepen a decision-maker’s understanding of the mutual and objective intentions of the parties as expressed in the words of the contract. The interpretation of a written contractual provision must always be grounded in the text and read in light of the entire contract […]. While the surrounding circumstances are relied upon in the interpretive process, courts cannot use them to deviate from the text such that the court effectively creates a new agreement […].
The nature of the evidence that can be relied upon under the rubric of “surrounding circumstances” will necessarily vary from case to case. It does, however, have its limits. It should consist only of objective evidence of the background facts at the time of the execution of the contract […], that is, knowledge that was or reasonably ought to have been within the knowledge of both parties at or before the date of contracting. Subject to these requirements and the parol evidence rule discussed below, this includes, in the words of Lord Hoffmann, “absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man” […]. Whether something was or reasonably ought to have been within the common knowledge of the parties at the time of execution of the contract is a question of fact.
Considering the Surrounding Circumstances Does Not Offend the Parol Evidence Rule
It is necessary to say a word about consideration of the surrounding circumstances and the parol evidence rule. The parol evidence rule precludes admission of evidence outside the words of the written contract that would add to, subtract from, vary, or contradict a contract that has been wholly reduced to writing […].
The parol evidence rule does not apply to preclude evidence of the surrounding circumstances. Such evidence is consistent with the objectives of finality and certainty because it is used as an interpretive aid for determining the meaning of the written words chosen by the parties, not to change or overrule the meaning of those words. […]
[…] it is sufficient to say that the parol evidence rule does not apply to preclude evidence of surrounding circumstances when interpreting the words of a written contract.
[107] Apart from his radical departure in defining the nature of appellate review of an adjudicator’s interpretation of a contract, Justice Rothstein was articulating traditional and venerable principles of contract interpretation. The rules for the interpretation of contracts direct a court to search for an interpretation from the whole of the contract that advances the intent of the parties at the time they signed the agreement.[^40] The court is directed not to read provisions in isolation but in harmony with the agreement as a whole.[^41]The court is directed to consider the terms used by the parties, the context in which they are used, and the purpose sought by the parties in using those terms.[^42] The idea that words take meaning from their immediate context is sometimes known by the Latin maxim noscitur a sociis. A simple example of the importance of context is provided by the word “demise”, which, depending on the accompanying language, may mean a “death”, a “conveyance” or a “lease”.
[108] Justice Rothstein was explaining long established law about the use of extrinsic evidence. In a much-cited passage, in the leading English authority, Reardon Smith Line Ltd. v. Hansen-Tangen,[^43] which is quoted at paragraph 47 of Sattva Capital Corp., Lord Wilberforce stated:
No contracts are made in a vacuum: there is always a setting in which they have to be placed … In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating.
[109] Five years earlier, in Prenn v. Simonds,[^44] Lord Wilberforce stated:
“[T]he time has long since passed when agreements … were isolated from the matrix of facts in which they were set and interpreted purely on internal linguistic considerations.” English law was not to be considered to have been “left behind in some island of literal interpretation”.
[110] Determining what constitutes the surrounding circumstances at the time of the execution of the contract is a question of fact. The surrounding circumstances are the background facts and information that would have been within the knowledge of both parties including the purpose of their contracting, the nature of the relationship to be constituted by the contracting, the customs of the market and industry associated with the contracting, and other matters that would have affected how the parties would understand the language of their contract.[^45]
[111] BBL’s reliance on pure literalism is not supported by the law recited by Justice Rothstein or Lord Wilberforce that the words in a contract are not immutable and must be interpreted in context. BBL’s reliance on pure literalism is not supported by the so-called cannon of contract interpretation. Ironically, in the context of the immediate case, it would have been an error of law of contract interpretation if the Arbitrator had not considered the surrounding circumstances or factual matrix of the Construction Contract.[^46]
[112] In the immediate case, BBL much relies on the principles of interpretation articulated by Justice Rothstein, and BBL accuses the Arbitrator of rewriting the Construction Contract rather than interpreting the contract in accordance with the principles of contract interpretation. However, apart from the alleged error in the use of extrinsic evidence, BBL never articulates the particular principle that has been contravened, and it never explains in what way the Arbitrator rewrote the contract in determining that the Construction Contract had been breached by BBL in wrongfully terminating the contract.
[113] BBL’s bald assertion that the Arbitrator failed to properly interpret and give effect to the unambiguous words of an article, which assertion it makes in five of the 45 items does not extract an error of contract interpretation. As noted above, 37 of BBL’s 45 items of asserted arguable Arbitrator error concern matters of whether the contract has been breached, and once again, BBL fails to extract an error of law. Moreover, I am not satisfied that 15 of the 45 items of alleged legal error would in any event significantly affect the rights of the parties such that an appeal may prevent a miscarriage of justice.[^47] It appears that the Arbitrator understood and undertook to apply the principles of contract interpretation. She made no identifiable arguable error in considering extrinsic facts in determining the factual nexus at the time of contracting, and she made no identifiable arguable error in considering the facts after the time the contract was signed in determining whether the contract had been breached or whether there was a defence to the breach of contract allegations. She did not have to find the contract to be ambiguous in order to determine its factual nexus or in order to determine whether the contract had been breached.
[114] In Teal Cedar Products Ltd. v. British Columbia,[^48] Justice Gascon reiterated how difficult it is to extricate a question of law premised on an argument that a judge mishandled the factual matrix in a passage that is applicable to the circumstances of the immediate case. He stated at paragraph 65:
[65] Again, contractual interpretation is a fact-specific exercise. It follows that a question of law premised on the failure to apply the principle that the factual matrix must not be interpreted in isolation from the words of the contract will be very difficult to extricate in practice. On closer examination, it will often amount to nothing more than a complaint about how much weight was allocated to the factual matrix — in effect, a disagreement about how the decision-maker interpreted the words of a contract in light of the factual matrix (Sattva, at paras. 50 and 65). In short, the supposed question of law will often reveal itself to be a question about whether the decision-maker applied the principle properly — a mixed question — and not about whether the decision-maker applied the proper principle. To extricate a question of law based on the alleged error of having overwhelmed the contract, a reviewing court must be satisfied that the decision-maker interpreted the factual matrix isolated from the words of the contract; an approach which could effectively create a new agreement. There is no arguable merit to the claim that the arbitrator’s analysis here adopted such a flawed approach.
[115] I therefore conclude that BBL does not satisfy the test for granting leave to appeal the Arbitrator’s award. It has not identified one or more arguable errors of law as opposed to questions of fact or questions of mixed fact and law.
H. Conclusion
[116] For the above reasons, the Application is dismissed.
[117] If the parties cannot agree about the matter of costs, they may make submissions in writing beginning with Varcon’s submissions within twenty days of the release of these Reasons for Decision, followed by BBL’s submissions within a further twenty days.
Perell, J.
Released: October 7, 2022
Schedule A – Construction Contract
THIS CONSTRUCTION CONTRACT (THE “Agreement”) made the 10th day of April, 2018
BETWEEN
BBL Design Build Solutions Limited (the” Contractor”)
-and-
Varcon Construction Corporation (the “Subcontractor”)
1:00 DEFINITIONS
1.01 "Change Directive" means a written instruction signed by the Contractor directing the Subcontractor to proceed with a change in the Work within the general scope of the Scope of Work prior to the Contractor and the Subcontractor agreeing upon adjustments in the Contract Price and Contract Time.
1.02 “Change Order” means a written amendment to the Contract signed by the Contractor and Subcontractor stating their agreement upon:
A change in the Contract Work;
The method of adjustment or the amount of the adjustment in the Contract Price, if any; and
The extent of the adjustment in the Contract Time, if any.
1.04 "Contract" means this Agreement, its appendices or schedules, the Specifications, Scope of Work, Change Orders and any amendments approved in writing by the Contractor.
1.05 “Contract Price” has the meaning specified in Article 5:00.
1.06 “Contract Time” is the time stipulated in the Subcontractor Schedule from the commencement of the Work to Substantial Completion of the Contract.
1.08 “Drawings” means drawings, plans, diagrams, illustrations, schedules, performance charts, brochures and other data provided by the Contractor to the Subcontractor which depict or illustrate some aspect of the Work, which items are more particularly set out on Schedule A.
1.09 “Master Schedule” means the overall schedule for the performance and completion of the Project attached hereto as Schedule B.
1:10 “Owner” means Shannex Incorporated.
1.13 “Scope of Work” means the document outlining the Work and related services, maintenance, supplies and equipment, Specifications, Master Schedule, Subcontractor Schedule and pricing under this Contract attached hereto as Schedule C.
1.15 “Specifications” means the technical requirements set out in the Scope of Work, any written directions applicable to such Scope of Work provided to the Subcontractor by the Contractor including Drawings, detailed design documents, performance criteria, code, regulation or bylaw produced/developed/issued by any government agency/board/council or independent society/association, that set out the manner of executing the Work and the type, nature and quality of the Work and the materials to be supplied, and which complement, enhance and detail the Work and Scope of Work, technical interpretation of the requirements of the Contract and any changes to these documents approved in writing by the Contractor.
1.16 "Subcontractor Schedule" means the detailed working schedule prepared by the Subcontractor and approved by the Contractor for the performance and completion of the Work under the Scope of Work.
1.17 "Sub-subcontractor" means a person or organization including subsidiaries of the Subcontractor who directly or indirectly contracts with the Subcontractor to perform any of the Work.
1.18 "Substantial Completion" means "substantial performance of the contract" within the meaning of the Construction Lien Act of Ontario.
1.19 “Work” shall include the delivery of all equipment required to be supplied as described in the Specifications, tools, consumables, project planning, site services, labour and supervision required to produce or complete the construction, maintenance, repair, modification or other services or the installation or removal of equipment as described in the Specifications, and all materials and equipment incorporated therein and the general obligations of the Subcontractor set out in the Contract and the Scope of Work.
2:00 GENERAL OBLIGATIONS OF THE SUBCONTRACTOR
2.02 In advance of signing this agreement, the Subcontractor shall visit the Site to review the level of construction and provide written notice confirming its visit to the Contractor. If the Contractor does not receive written notice, the Subcontractor is still responsible to visit the Site and shall be deemed to have visited and reviewed the Site.
2.04 The Subcontractor shall perform work in an efficient workmanlike skillful and careful manner and on a timetable as to cause a minimum of interference with the Contractor's or Owner's operations and the operations of any other subcontractors that work on the Site.
2.07 Any and all Work performed or to be performed by the Subcontractor under or pursuant to the Scope of Work shall be governed by the terms of the Contract.
2.08 The Subcontractor shall perform the Work as described in the Scope of Work with its own forces in the trades normally employed directly by it, except for such aspects of the Work that are subcontracted. The Subcontractor shall be solely responsible for all construction means, methods, techniques, sequences and procedures and for coordinating each and every portion thereof, and if so provided in the Scope of Work, shall be solely responsible for ail aspects of the engineering and design for the Work on the condition that the Contractors obtains sufficient errors and omissions insurance. The Subcontractor recognizes the relationship of trust and confidence established between it and the Contractor and shall furnish its best skill and judgment and shall comply with the directives and requirements of the Contractor in forwarding the interests of the Contractor.
2.09 Except as expressly provided otherwise in the Scope of Work and listed in Schedule E, the Subcontractor shall obtain and pay for all permits, licenses, inspections and certificates necessary for the performance and completion of the Work in strict accordance with the Contract. The Contract Price includes the cost of these permits, licenses, inspections and certificates and their procurement. Any delays resulting from the process of obtaining permits, licenses, inspections and certificates will be the sole responsibility of the Subcontractor and the Subcontractor will be responsible for any resulting costs.
2.10 The Subcontractor shall furnish all construction equipment, tools, materials, supplies, consumables and services (including safety materials, storage, lunch room for its employees and meeting facilities (if required)).
2.11 Any Work, equipment and materials shown on the Drawings, even if not particularly described in the Specifications, as it relates to the Scope of Work, are to be done or supplied by the Subcontractor as part of the Work as if such Work, equipment and materials were so described.
2.12 Equipment, Work and materials that are not specifically mentioned in the Contract but that are usual or necessary for the completion and satisfactory operation of the Work, as it relates to the Scope of Work, in accordance with the terms of the Contract shall be deemed to be part of the Work and included in the Contract Price.
2.13 The Subcontractor warrants that, prior to its acceptance of a Scope of Work, it has:
(a) examined the Scope of Work; and
(b) considered any difficulties or hazards that might be expected to be encountered in performing the Work.
2.14 The Subcontractor represents and warrants that the Subcontractor has carefully examined the Site and the site of the work and has accepted all conditions that may impact the performance of the Work including, without limitation: climate, present physical condition of the Site, access, topography, geotechnical and other subsurface conditions, storage areas, nature and location of the Work, site congestion, other subcontractors, supervision, labour, materials, plants, and other things required for the proper performance and timely completion of the Work and all other conditions, contingencies and risks that may be associated with the performance and observance of Subcontractor's obligations under the Contract.
2.15 When the Contract requires the Subcontractor to perform engineering or design Work, the Subcontractor shall submit a PDF version and one (1) copies of preliminary designs to the Contractor's Draftsman for review and approval. The preliminary designs shall be accompanied by a cover sheet which outlines the contents of the submission and the Site to which the drawings are applicable.
2.16 After the Contractor's approval of the preliminary designs, the Subcontractor shall submit the final detailed design to the Contractor for approval before the Subcontractor or any Subsubcontractors may commence any Work related to or affected by the design. The Subcontractor shall also submit to the Contractor's Draftsman for review and approval a PDF version and two (2) copies all Drawings, including all shop, fabrication and field drawings. The Drawings shall be accompanied by a cover sheet which outlines the contents of the submission and the Site to which the Drawings are applicable.
2.17 Preliminary designs and Drawings will only be received from the Subcontractor. If they are received from Sub-subcontractors they will be forwarded to the Contractor's Draftsman.
2.18 Once received by the Contractor's draftsman (DBS Shop drawing agent), preliminary designs and Drawings will be forwarded to the appropriate consultant for review.
2.19 The Contractor's review and approval, or the review and approval of any consultant retained by the Contractor, shall not relieve the Subcontractor from liability or responsibility for the safety and performance of the Work or for compliance with the Contract.
2.20 The Subcontractor shall allow in its Subcontractor Schedule seven (7) Working Days after submission of its draft Subcontractor Schedule for the Contractor's review of the Subcontractor's Drawings and documentation.
2.21 All Drawings and related documentation prepared by the Subcontractor and approved by the Contractor in accordance with this Contract shall, once so approved, become the sole and exclusive property of the Contractor. For further certainty, the Subcontractor expressly, absolutely, and without reservation assigns to the Contractor all rights and title to the Drawings and related documentation. Upon attaining Substantial Completion of the Contract, the Subcontractor shall deliver to the Contractor a complete set of the Drawings and related documentation in paper and native electronic formats.
3.00 TERM OF CONTRACT
This Contract shall be effective from the date first above-written through to Completion unless otherwise terminated in accordance herewith. No termination of the Contract shall affect Work issued prior to the termination date unless specifically stated otherwise in the written termination notice. If the Contractor terminates the Contract, the Subcontractor, in accordance with the payment terms, will be paid for the portion of the work properly completed to the date of termination, less any reasonable costs to complete.
4:00 TIME OF COMPLETION
4.01 The Subcontractor shall complete all of the Work described in the Scope of Work in accordance with the Contract by the date specified in the Scope of Work. The Subcontractor shall perform the Work diligently at such a rate and in such a manner as is necessary to ensure the Work is performed and completed within the time limits set out in the Scope of Work.
4.02 The Subcontractor shall comply with the Master Schedule and the Subcontractor Schedule and any other schedules that may be agreed upon.
4.03 The Subcontractor shall schedule its Work so as to conform to the Subcontractor Schedule. The Contractor and other subcontractors may be working concurrently at the Site during the performance of the Work. The Subcontractor shall anticipate in its scheduling that the Work may be interfered with or temporarily delayed on account of the concurrent Work of the Contractor or others. If the Subcontractor Schedule is not delayed, the Subcontractor shall not be entitled to compensation or damages in respect of such interference or delay. If the Subcontractor Schedule is delayed, the Subcontractor shall be entitled to an extension in the Contract Time and corresponding costs as agreed by the Contractor, acting reasonably. Subcontractor shall cooperate with the Contractor and any other subcontractor working at the Site and shall coordinate its Work so that a minimum of delay and interference is experienced between and among the Contractor, the Subcontractor and any Sub-subcontractors. The Contractor will use reasonable efforts to coordinate the Work of all subcontractors at the Site and the Subcontractor shall comply with the Contractor's direction in order to facilitate the overall expeditious performance of all Work. Notwithstanding the Contractor's efforts to coordinate the Work of all subcontractors, the Subcontractor remains solely responsible for the effective coordination of the Work.
4.04 If any part of the Work depends for proper execution or results upon the Work of any other subcontractor or the Contractor, the Subcontractor shall inspect and promptly report in writing to the Contractor any defects in such Work before performing any preparation, erection or installation Work within reason. Failure to inspect or report defects promptly shall be deemed to constitute an acceptance by the Subcontractor of the Work of the other subcontractor or the Contractor as fit and proper for the reception of the Work and the Subcontractor shall not be entitled to compensation or damages for delay or extra cost or expense in respect of defects that were not promptly reported to the Contractor before the commencement of the Work.
4.05 If the Subcontractor falls behind the Master Schedule the Contractor has the right to demand a plan, to be approved by the Contractor, to bring the Subcontractor back in compliance with the Master Schedule.
4.06 The Subcontractor shall, within 14 Days of the date on which the Subcontractor received notification of the award of the Contract, prepare and forward to the Contractor for approval a draft Subcontractor Schedule. The schedule shall be prepared within the framework of Master Schedule. The Subcontractor Schedule must be reviewed and approved by the Contractor and the Subcontractor shall revise and resubmit a schedule reflecting recommendations made by Contractor. If approved by the Contractor in writing, the Subcontractor Schedule shall become the schedule for the Contract. The Contractor's approval of the Subcontractor Schedule shall be for general compliance with the requirements of the Contract and overall project coordination and does not indicate approval of, or assumption of any responsibility, for correctness or adequacy of, the program shown in the Subcontract Schedule.
4.08 The Subcontractor Schedule shall:
i. conform to and show Contractor's milestones and constraints;
ii. prepared in the critical path method;
iii. show each activity duration in a level of detail of two weeks or less, unless it is an ongoing task;
iv. based on early start and early finish logic for each activity/task;
v. show the start, finish dates and duration for each activity/task;
i [sic] show the float for each activity/task;
vi. include an estimate of the number of workers required per week, by major area, by trade, necessary to meet the Subcontractor Schedule;
ii. [sic] have the estimated man-hours per task shown; and
iii.[sic] include the cost loading by task or group of tasks.
4.11 Throughout the duration of the Contract the Subcontractor Schedule shall be revised as necessary to remain current to the Master Schedule and any changes deemed necessary by the Contractor.
5:00 CONTRACT PRICE
5.01 As full compensation for the Subcontractor's performance of its obligations under the Contract, the Contractor shall pay the Subcontractor the amount(s) calculated and payable as set out at Schedule D (the "Contract Price").
5.02 No progress payments made by the Contractor to the Subcontractor hereunder shall be construed as a waiver of the Contractor's right to require the fulfillment of all the terms of the Contract. No certificate given or payment made under this Contract shall constitute any evidence of performance except the final certificate of Substantial Completion of the Contract. Neither the final certificate nor final payment shall be construed as an acceptance by the Contractor of any defective or deficient aspects of the Work.
5.03 In the event that the Contractor in good faith anticipates a material breach of the Contract by the Subcontractor or otherwise has a claim against the Subcontractor, the Contractor, acting reasonably, may withhold any payment or portion thereof otherwise payable to the Subcontractor. The Contractor shall provide the Subcontractor with five (5) Working Days Notice of its intention to withhold any payment or portion thereof. The Subcontractor shall be in compliance with the Contractor's instructions if it corrects the default or commences correction of the default within the specified time.
5.04 Except where otherwise specifically stated in the Scope of Work, the Contract Price shall be fixed and not subject to escalation and is inclusive of all required duties, levies, taxes and other charges (except HST). Without limiting the generality of the foregoing, the Subcontractor shall be solely responsible for the payment of any taxes on or in respect of the Subcontractor's capital revenue or income earned in Canada or elsewhere including any withholding taxes that the Contractor may be required by law to deduct from payments made to the Subcontractor and remit to the Canadian taxation authorities.
5.05 The Contractor shall pay HST as required by law. The Subcontractor shall clearly indicate the amount of HST as the case may be on every invoice submitted to the Contractor.
7:00 CONTRACT DOCUMENTS
7.03 The Subcontractor shall report at once to the Contractor in writing any error, inconsistency or omission in the Contract. No changes or substitutions in and to any portion of the Contract may be made by the Subcontractor without the Contractor's prior written consent.
8:00 DELAYS AND TEMPORARY SHUTDOWNS
8.01 If the Subcontractor or its Sub-subcontractors causes or suffers a delay in the Master Schedule or the Subcontractor Schedule which is not otherwise excused hereunder, the Contractor shall have the right, in its sole discretion, to terminate the Contract if the delay in the Master Schedule results in damages in excess of fifteen (15) percent of the Contract Price.
8.02 If the Subcontractor or its Sub-subcontractors cause or suffer a delay in the Master Schedule or the Subcontractor Schedule which is not otherwise excused hereunder, the Subcontractor shall, without additional cost to the Contractor, work such overtime, acquire such necessary additional equipment or perform such other acts as may be necessary to complete the Work within the specified time. If the Subcontractor is delayed in the completion of the Work due to acts of the Contractor, all without the fault or negligence of the Subcontractor, the time for completion of the Work shall be extended; provided that the Subcontractor shall use its best efforts to minimize the actual impact of such delay upon the Master Schedule. In arriving at the length of the extension, the Subcontractor will maintain a record of days or portion of days upon which, on account of such delays caused by the Contractor, it is impossible to proceed with any Work. Where only a part of the Work is delayed for any such reason, the part of the Work affected and the time lost thereby shall be determined by the Contractor, acting reasonably. If the Contractor and Subcontractor do not agree, this issue shall be determined by the dispute resolution clause herein. Any delay and the causes thereof shall be evidenced by written notice from the Subcontractor to the Contractor within five (5) Working Days after the delay commences; otherwise, the Subcontractor will be deemed to have waived any claim for an extension of the Master Schedule.
8.03 The Subcontractor shall, within ten (10) Working Days, notify the Contractor in writing of any occurrence which has caused or which may cause a substantial delay to, or which will affect, the performance of the Work according to the Subcontractor Schedule. The Subcontractor shall notify the Contractor in writing not less than ten (10) Working Days after the occurrence which caused the delay or gave rise to the anticipation of the delay. The notice must set out particulars of the cause of the delay, the expected length of the delay and the steps that Subcontractor has taken, is taking or intends to take to mitigate the effects of the delay. In the case of a continuing cause of delay, only one notice of delay is necessary.
8.04 If the Subcontractor fails to give notice within the time required any cost resulting from the delay shall be borne by the Subcontractor without reimbursement or extension of the Subcontractor Schedule.
8.05 Notice of delay made by the Subcontractor may be submitted to the Contractor at a later date when the extent of a delay has been determined by Subcontractor, but in any event shall be submitted not later than five (5) Working Days after the date on which the full extent of the alleged delay could reasonably be determined and under no circumstance later than the date of the Subcontractor's Completion.
8.06 After receipt of a notice of delay, the Contractor shall decide the validity of the claim. The decision of the Contractor may be made at a later date, including a date after the final completion of the work, if the Contractor, acting reasonably, considers that the decision can be best rendered at that time having regard to all the circumstances. If the Contractor and Subcontractor do not agree, this issue shall be determined by the dispute resolution clause herein.
8.07 If the Contractor, acting reasonably, accepts a request for a delay to the work which will affect the Master Schedule or Substantial Completion of the Contract, the Contractor shall have the right to extend Substantial Completion of the Contract and direct the Subcontractor to submit a revised Subcontractor Schedule within a timeframe to be determined by the Contractor. If the Contractor and Subcontractor do not agree, this issue shall be determined by the dispute resolution clause herein.
10:00 SUBCONTRACTING
10.01 The Subcontractor is not authorized to and shall not subcontract the entirety of the Work to be performed hereunder or transfer, sell or assign the Contract without the prior written consent of the Contractor. No subcontracting, sale or assignment irrespective of the Contractor's consent hereto shall relieve the Subcontractor of its liability and responsibility for the full performance of the Contract.
10.02 As soon as practicable and before awarding any Sub-subcontracts, the Subcontractor shall notify the Contractor in writing of the names of proposed Sub-subcontractors. The Subcontractor shall not employ any Sub-subcontractor to which the Contractor, acting reasonably, objects or may have a reasonable objection. All Work performed by a Sub-subcontractor shall be pursuant to an appropriate written contract with the Subcontractor which must be approved by the Contractor and which shall contain provisions that preserve and protect the rights of the Contractor under the Contract and shall require that the Work be performed in accordance with the Contract. Nothing in the Contract shall create any contractual relationship between the Contractor and any Subsubcontractor or any obligation on the part of the Contractor to pay any sums directly to any Subsubcontractor. The Subcontractor shall be solely and fully responsible to the Contractor for the performance of its Sub-subcontractors.
10.03 If the Subcontractor fails to pay any Sub-subcontractors appropriately, the Contractor has the right to pay the Sub-subcontractor and deduct any amounts paid from moneys due or that become due to the Subcontractor.
14:00 WARRANTY
14.01 The Subcontractor agrees that it shall be a condition of the Contract that:
(a) unless otherwise expressly agreed in writing, all materials and equipment forming part of the Work shall be new, and of first quality and free of all liens and encumbrances; (b) the Work shall comply with the requirements set out in the Specifications and other parts of the Contract, be of merchantable quality, be free from any defects in design, materials and Workmanship and be suitable for the purpose for which it is intended as indicated in the Specifications;
(c) the Work shall be performed in accordance with the highest standards applicable to the disciplines involved and shall comply with all applicable laws, rules and regulations and shall conform to all of the requirements of the Contract; and all design Work provided in connection with the delivery shall be approved by qualified licensed professionals, shall comply with the requirements set out in the Specifications and the highest professional standards and shall be suitable for the purposes for which the Work is intended.
(d) all design Work provided in connection with the delivery shall be approved by qualified licensed professionals, shall comply with the requirements set out in the Specifications and the highest professional standards and shall be suitable for the purposes for which the Work is intended.
16.00 INDEMNITY
The Subcontractor shall indemnify and hold harmless the Contractor and, if requested by the Contractor, its directors, officers, agents and employees from and against any and all claims, loss, damage, fines and penalties and expenses whatsoever (including legal fees and disbursements) caused or alleged to have been caused in whole or in part by any act or omission of the Subcontractor or any person for whom the Subcontractor may be responsible, including its sub-subcontractors either pursuant to this Contract or by law whether negligent or otherwise, or which may arise out of the Subcontractor’s performance of this contract.
19:00 CHANGES
19.02 When a change in the Work is proposed or required, the Contractor will provide the Subcontractor with a written description of the proposed change in the Work in the form of a proposed Change Order. The Subcontractor shall, within ten (10) Working Days, present to the Contractor a method of adjustment or an amount of adjustment for the Contract Price, if any, and the adjustment in the Subcontractor Schedule, if any, for the proposed change in the Work.
19.03 If the Contractor and Subcontractor agree to the adjustments in the Contract Price and Subcontractor Schedule such agreement shall be effective only after written permission is issued by the Contractor's Project Manager to the Subcontractor in the form of a Change Order. The value of the work performed as the result of a Change Order shall be included in the application for progress payment.
19.04 If the Contractor requires the Subcontractor to proceed with a change in the Work prior to the Contractor and Subcontractor agreeing upon the corresponding adjustment in the Contract Price and Subcontractor Schedule, the Contractor shall issue a Change Directive. The Subcontractor shall perform the required work pursuant to a Change Directive issued by the Contractor. The cost for the Change Directive will be limited to the actual cost of the following on a time and materials basis:
(a) salaries, wages and benefits paid to personnel in the direct employ of the Subcontractor under a salary or wage schedule agreed upon by the Contractor and the Subcontractor, or in the absence of such a schedule, actual salaries, wages and benefits paid under applicable bargaining agreement, and in the absence of a salary or wage schedule and bargaining agreement, actual salaries, wages and benefits paid by the Subcontractor, for personnel;
(b) stationed at the Subcontractor's field office, in whatever capacity employed;
(c) engaged in expediting the production or transportation of material or equipment, at shops or on the road;
(d) engaged in the preparation or review of Shop Drawings, fabrication drawings, and coordination drawings;
(e) engaged in the processing of changes in the Work;
(f) contributions, assessments or taxes incurred for such items as employment insurance, provincial or territorial health insurance, workers' compensation, and Canada or Quebec Pension Plan, insofar as such cost is based on wages, salaries or other remuneration paid to employees of the Subcontractor and included in the cost of the Work;
(g) travel and subsistence expenses of the Contractor's personnel described in paragraph (a);
(h) materials, supplies, construction equipment, temporary Work, and hand tools not owned by the workers, including transportation and maintenance thereof, which are consumed in the performance of the Work; and cost less salvage value on such items used but not consumed, which remain the property of the Subcontractor;
(i) all tools and construction equipment, exclusive of hand tools used in the performance of the Work, whether rented from or provided by the Subcontractor or others, including installation, minor repairs and replacements, dismantling, removal, transportation, and delivery cost thereof;
(j) all equipment and services required for the Subcontractor's field office;
(k) deposits lost;
(l) the amounts of all sub-subcontracts;
(m) quality assurance such as independent inspection and testing services;
(n) charges levied by authorities having jurisdiction at the Site;
(o) royalties, patent licence fees and damages for infringement of patents and cost of defending suits therefor subject always to the Subcontractor's obligations to indemnify the Contractor;
(p) any adjustment in premiums for all bonds and insurance which the Subcontractor is required, by the Contract, to purchase and maintain;
(q) any adjustment in taxes, other than value added taxes, and duties for which the Contractor is liable;
(r) charges for long distance telephone and facsimile communications, courier services, expressage, and petty cash items incurred in relation to the performance of the Work;
(s) removal and disposal of waste products and debris; and
(t) safety measures and requirements.
19.05 Notwithstanding any other provisions contained in the Contract, it is the intention of the parties that the cost of any item under any cost element referred to in Article 19.04 shall cover and include any and all costs or liabilities attributable to the Change Directive other than those which are the result of or occasioned by any failure on the part of the Subcontractor to exercise reasonable care and diligence in the Subcontractor's attention to the Work. Any cost due to failure on the part of the Subcontractor to exercise reasonable care and diligence in the Subcontractor's attention to the Work shall be borne by the Subcontractor.
19.06 The Subcontractor shall keep full and detailed accounts and records necessary for the documentation of the cost of performing the Work attributable to the Change Directive and shall provide the Contractor with copies thereof when requested.
19.07 For the purpose of valuing Change Directives, the Contractor shall be afforded reasonable access to all of the Subcontractor's pertinent documents related to the cost of performing the Work attributable to the Change Directive, and for this purpose the Subcontractor shall preserve such records for a period of one year from the date of Substantial Completion of the Contract.
19.08 Pending determination of the final amount of a Change Directive, the undisputed value of the Work performed as the result of a Change Directive is eligible to be included in progress payments.
19.09 If the Contractor and the Subcontractor do not agree on the proposed adjustment in the Subcontractor Schedule attributable to the change in the Work, or the method of determining it, the adjustment shall be dealt with by the dispute resolution process provided for in this Contract.
19.10 When the Contractor and the Subcontractor reach agreement on the adjustment to the Contract Price and to the Subcontractor Schedule, this agreement shall be recorded in a Change Order.
20:00 CLAIM NOTIFICATION
20.01 The Subcontractor, within ten (10) Working Days, shall notify the Contractor in writing of any occurrence which in the Subcontractor's opinion has caused or which it anticipates may cause a material delay which will affect the Master Schedule of performance on the part of the Subcontractor and in any event shall notify the Contractor in writing not later than ten (10) Working Days after the occurrence which caused the alleged delay or gave rise to the anticipated delay.
20.02 If the Subcontractor considers that any alleged delay or increased cost was the direct result of the act or neglect of the Contractor, its agents or employees, the Subcontractor must advise the Contractor in writing and may also submit a written claim to the Contractor for an extension of the time for completing the Work and for approval of the reimbursement of the Subcontractor's additional direct costs which can be shown to be the result of the delay resulting from such act or neglect. After receipt of such a claim submitted by the Subcontractor, the Contractor, acting reasonably, shall decide the validity of the claim and if the Contractor, acting reasonably, accept such claim or portion of such claim (which acceptance shall not be arbitrarily denied) it shall be paid to the Subcontractor and the Contractor shall have the right to extend the Master Schedule, or alternatively, to require the Subcontractor to complete the Work as originally scheduled, but in such latter event the Contractor shall be responsible to pay whatever additional direct costs are incurred as a result of such direction. If the Contractor and Subcontractor do not agree, this issue shall be determined by the dispute resolution clause herein.
20.03 If the Subcontractor disputes the decision of the Contractor on a claim submitted pursuant to the provisions of this Article, the Subcontractor shall, after consultation, if ordered by the Contractor, perform the Work and the performance of the Work shall not prejudice any remedies the Subcontractor may have, provided the Subcontractor gives the Contractor within five (5) Working Days of the receipt of the Contractor's decision, a written notice that the Subcontractor disputes the Contractor's decision in accordance with the dispute resolution clause herein.
20.04 In the case of the Subcontractor's neglect or failure to observe fully and faithfully all the above conditions of this Article, it shall forfeit all right to additional costs, damages, extension of time for completing the Work, which it otherwise might have had, and shall not make any claim in respect thereof, and if made, the Contractor may reject the same as invalid, and the Subcontractor shall not have any right of recovering damages or compensation with respect thereof at law or otherwise.
21:00 FORCE MAJEURE
21.02 Events occurring after the issuance of a Scope of Work which are beyond the control of the Parties, such as a strike, lockout, fire, war, mobilization, conscription, distrait, confiscation and currency restrictions, shall be deemed to be force majeure events to the extent that the event as such has impeded the fulfillment of the contractual obligations and to the extent that it could not reasonably have been possible to foresee, avoid or prevent. A lack of funds or an inability to obtain financing at a reasonable or any cost or financial hardship shall not constitute a force majeure event.
21.04 The other party shall be promptly informed in writing of the beginning and cessation of the force majeure event. Failure to give prompt notice will result in loss of the right to rely on such event as an event of force majeure.
23:00 TERMINATION
23.01 Except as provided below the Contract will continue until all the Subcontractor’s obligations under the Contract have been discharged. Those terms of the Contract that expressly or by implication survive the Contract shall be enforceable beyond the terms of the Contract.
23.02 The Contractor may terminate the Contract as follows:
(b) upon notice, if the Subcontractor fails to cure a default in respect of any of its obligations hereunder within ten (10) Working Days following receipt of a written notice from the Contractor specifying the nature of such default or defaults (if such default or defaults cannot be rectified fully within the ten (10) Working Days period noted herein the Subcontractor may submit a plan, including a strict timeline, under which the default or defaults will be rectified in full and the Contractor, in its sole discretion, may decide to accept or reject the Subcontractor's rectification plan);
23.03 The Contractor, acting reasonably, may terminate the Contract in whole or in part at any time with or without cause by giving the Subcontractor ten (10) Working days written notice. Termination shall be effective in the manner specified in the notice and shall be without prejudice to any right derived from the Subcontractor's performance or nonperformance under this Contract. The Contractor's sole liability on such termination shall be to pay the Subcontractor, upon the Subcontractor's satisfaction of the requirements of this Article the following amounts:
(a) the unpaid balance due the Subcontractor for Work satisfactorily performed prior to receipt of the Contractor's notice of termination;
(b) all reasonable expenditures made and costs incurred by the Subcontractor for materials or equipment ordered by Subcontractor for the Work prior to notice of termination and not incorporated therein;
(c) reasonable and unavoidable costs incurred by the Subcontractor in terminating the Work, including reasonable and unavoidable costs incurred as a result of terminating commitments to Sub-subcontractors and suppliers, provided that such amounts shall not be paid in the event that the termination is because of the Subcontractor's breach; and
(d) the percentage of any fixed portion of the compensation not measured on the basis of costs which is equivalent to the percentage of the Work satisfactorily completed, as reasonably estimated by the Contractor as of the date of the notice.
24:00 GOVERNING LAW AND DISPUTE RESOLUTION
24.01 The Contract shall be governed by, and disputes shall be settled in accordance with the laws of the Province of Ontario.
24.02 Any disputes between the parties will be resolved by binding arbitration before a sole arbitrator pursuant to the Arbitration Act, 1991 of Ontario.
24.03 Each party will be responsible for its own costs for the binding arbitration.
27:00 ENTIRE CONTRACT
27.00 The Parties agree that there are no contracts, terms or understandings other than those written or specified in the Contract unless specifically incorporated therein by reference.
SCHEDULE C - SCOPE OF WORK
Project Name: Shannex Parkland Ajax Project Number: 5680
Scope of Work: Through the combination of this scope and drawings it is intended to create an inclusive base building package to provide a complete weather tight building matching the provided renderings for the Parkland Ajax facility being constructed at 1 Rossland Road West, Ajax, Ontario. Details of the scope and exclusions are below. Any errors or omissions are to be brought up prior to signing. The general and overall quality of workmen ship, products and finishes are to be equal or greater to that of the Shannex Parkland at the Gardens complex located at 5732 College Street, Halifax, Nova Scotia. By executing this contract, the subcontractor confirms they visited 5732 College Street, Halifax, Nova Scotia and fully understand the overall quality and finish that is expected to be delivered. This contract includes all exterior finishes to match the provided renderings and the subcontractor shall ensure the overall look of the building matches the renderings.
1 General Scope of Work
1.3 Project General Overview
1.3.1 The base buildings will include all exterior wall systems, structural concrete, all exterior masonry, CIP elevator shafts, interior masonry, windows, curtain or window wall, balcony rails, metal cladding, shoring, site excavation, all site drainage (including podium drainage, to be connected by plumbing contractor), podium, foundation building water proofing and all retaining walls to complete building shell to a weather tight condition. All building systems and products can be changed as long as the overall image stays the same as the renderings and elevations. All changes must be approved by the Contractor. Quality of products and building system are to be of Parkland at the Gardens quality or greater.
2 Scope of Work Detailed
2.1 DIVISION 1 GENERAL REQUIREMENTS
2.1.1 All consulting cost prior to the building permit being issued are the responsibility of the Contractor unless otherwise indicated.
2.1.2 It is the Subcontractors responsibility to finalize the structural design, and shoring design. All cost and risk associated with the engineering, fees, precondition report, inspections, monitoring and testing requirements for this portion are the responsibility of the Subcontractor. This includes all required information and paperwork to achieve building occupancy.
2.1.3 Structural drawings to be designed and stamped by a Professional Engineer(s) registered in Ontario.
2.1.14 All required surveying and layout for the excavation and building structure are included in the scope.
2.1.15 Lot location certificate "pin plan".
2.1.16 All geo & hydro-g requirements to complete scope, including soils compaction testing by subcontractor including all required inspections.
2.1.19 Exclusions:
a. Building permit /application
b. Structural design to permit set level only is not included. All other structural design is included in the subcontractor's scope
c. Other then what has been listed all other design disciplines have been excluded and are not part of this scope.
d. Bonding.
Boundary survey, subdivision or lot consolidation if required.
2.2 DIVISION 2 SITEWORK/ASPHALT/FLATWORK/LANDSCAPING/FENCING
2.2.1 All siteworks to complete shoring, excavation and foundation work.
2.2.2 All shoring design and inspections
2.3 DIVISION 3 CONCRETE
2.3.1 All structural concrete as per drawings and provide specs. Final structural details are to be finalized by Subcontractor
2.3.3 All required reinforcing steel for foundations, columns, beams, slabs, etc., sizes to be determined by design. Including all required embedded plates and shear stud rails.
2.5 DIVISION 5 METALS
2.5.1 Structural drawings designed and stamped by a Professional Engineer registered in Ontario and all documents to satisfy permits, inspection and occupancy process.
2.9 DIVISION 9 FINISHES
2.9.1 Supply, install and design all exterior steel stud walls and densglass exterior sheathing behind masonry walls and where required to completed the building shell.
2.15 DIVISION 16 ELECTRICAL
2.15.2 Subcontractor to assist with coordination, design and install of the coralline in the structural slab.
Contract Amendment #01
(2) If at any time during construction DBS is advised that Varcon has not made payments to the Varcon's subcontractor Maurice's Masonry & Forming LTD within 24 hours from receipt of payment from DBS. Varcon will then be in default of this commitment and DBS will have the right to take over these payments to ensure Maurice's Masonry & Forming LTD receives the required payments. These payments will be subtracted from Varcon's contract.
[^1]: S.O. 1991, c. 17.
[^2]: March 8, 9, 11, 12, 15 and 16, 2021; April 8, 14 and 27, 2021; May 4, 10 and 25, 2021; June 30, 2021 and August 16, 2021.
[^3]: 2014 SCC 53.
[^4]: Phoenix Interactive Design Inc. v Alterinvest II Fund L.P. [2017] O.J. No. 224 (S.C.J.).
[^5]: DesRochers v. Fis, 2013 ONSC 6467; Wooree Trading Ltd. v. Wooree Trading Ontario Ltd., 2010 ONSC 7162 at para. 37; School of Dance (Ottawa) Pre-Professional Programme Inc. v. Crichton Cultural Community Centre, [2007] O.J. No. 3111 at para. 7 (S.C.J.); Lombard Canada Co. v. Axa Assurance Inc., [2007] O.J. No. 601 at paras. 10-11 (S.C.J.); York Condominium Co. No. 359 v. Solmica Chemical International Inc., [2005] O.J. No. 6268 (S.C.J.); Gore Mutual Insurance Co. v. TTC Insurance Co., [2004] O.J. No. 1359 (S.C.J.).
[^6]: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53; DesRochers v. Fis, 2013 ONSC 6467; Zafir Holdings Inc. v. Grassmere Construction Ltd., 2013 ONSC 1835 at para. 5.
[^7]: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 at para. 72.
[^8]: DesRochers v. Fis, 2013 ONSC 6467; Aronowicz et al. v. Aronowicz, (2007), 2007 CanLII 1885 (ON SC), 84 O.R. (3d) 428 at para. 32. (S.C.J.); McAsphalt Marine Transport Ltd. v. Liberty International Canada, 2005 CanLII 11794 (ON SC), [2005] O.J. No. 1424 at para. 34 (S.C.J.); Denison Mines Ltd. v. Ontario Hydro, (2002), 2002 CanLII 62450 (ON SC), 61 O.R. (3d) 291 at para. 6 (S.C.J.).
[^9]: Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32 at para. 64; Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 at para. 68; DesRochers v. Fis, 2013 ONSC 6467; Aronowicz et al. v. Aronowicz, (2007), 2007 CanLII 1885 (ON SC), 84 O.R. (3d) 428 at paras. 27-29. (S.C.J.); McAsphalt Marine Transport Ltd. v. Liberty International Canada, 2005 CanLII 11794 (ON SC), [2005] O.J. No. 1424 (S.C.J.).
[^10]: Teal Cedar Products Limited v. British Columbia, 2017 SCC 32 at para. 43; Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 at para. 49; Dr. K. Ansarian Dentistry Professional Corp. v. Dr. A. Mohajeri Dentistry Professional Corp., 2013 ONSC 2662 at para. 21; Canada (Director of Investigation and Research, Competition Act) v. Southam Inc., [1997] 1 S.C.R. 758, para. 35.
[^11]: Toronto Standard Condominium Corp. No. 2256 v. Paluskiewicz, 2018 ONSC 2329 at para. 58.
[^12]: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 at para. 36.
[^13]: Toronto Standard Condominium Corp. No. 2256 v. Paluskiewicz, 2018 ONSC 2329 at para. 61.
[^14]: Teal Cedar Products Limited v. British Columbia, 2017 SCC 32 at para. 47.
[^15]: Zafir Holdings Inc. v. Grassmere Construction Ltd., 2013 ONSC 1835 at paras. 6-7; Wooree Trading Ltd. v. Wooree Trading Ontario Ltd., 2010 ONSC 7162; Amalgamated Transit Union, Local 279 v. Ottawa (City), [2009] O.J. No. 4618 (S.C.J.); MacDougall v. MacDougall, 2005 CanLII 44676 (ON CA), [2005] O.J. No. 5171 (C.A.); McAsphalt Marine Transport Ltd. v. Liberty International Canada, 2005 CanLII 11794 (ON SC), [2005] O.J. No. 1424 (S.C.J.).
[^16]: IFP Technologies (Canada) v. EnCana Midstream and Marketing, 2017 ABCA 157 at para. 83, leave to appeal to the S.C.C. ref’d [2017] S.C.C.A. No. 303; British Columbia (Minister of Technology Innovation and Citizens’ Services) v Columbus Real Estate Inc., 2016 BCCA 283 at paras 40, 51; Starrcoll Inc. v. 2281927 Ontario Ltd., 2016 ONCA 275 at paras 16-17
[^17]: Zafir Holdings Inc. v. Grassmere Construction Ltd., 2013 ONSC 1835 at para. 40; Aronowicz et al. v. Aronowicz, (2007), 2007 CanLII 1885 (ON SC), 84 O.R. (3d) 428 (S.C.J.).
[^18]: York Condominium Co. No. 359 v. Solmica Chemical International Inc., [2005] O.J. No. 6268 at para. 33 (S.C.J.).
[^19]: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235 at para. 36.
[^20]: Ferreira v. Esteireiro 2013 ONSC 4620 at para. 24.
[^21]: Dr. K. Ansarian Dentistry Professional Corp. v. Dr. A. Mohajeri Dentistry Professional Corp., 2013 ONSC 2662 at para. 35.
[^22]: Corner Brook (City) v. Bailey, 2021 SCC 29 at para, 44; Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32 at paras. 45, 65; Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53; Zafir Holdings Inc. v. Grassmere Construction Ltd., 2013 ONSC 1835 at paras. 6-7; Wooree Trading Ltd. v. Wooree Trading Ontario Ltd., 2010 ONSC 7162; Amalgamated Transit Union, Local 279 v. Ottawa (City), [2009] O.J. No. 4618 (S.C.J.); MacDougall v. MacDougall, 2005 CanLII 44676 (ON CA), [2005] O.J. No. 5171 (C.A.); McAsphalt Marine Transport Ltd. v. Liberty International Canada, 2005 CanLII 11794 (ON SC), [2005] O.J. No. 1424 (S.C.J.); Algoma Steel Inc. v. Union Gas Ltd. (2003), 2003 CanLII 30833 (ON CA), 63 O.R. (3d) 78 at paras. 19-21 (C.A.).
[^23]: Dr. K. Ansarian Dentistry Professional Corp. v. Dr. A. Mohajeri Dentistry Professional Corp., 2013 ONSC 2662 at para. 35.
[^24]: Toronto Standard Condominium Corp. No. 2256 v. Paluskiewicz, 2018 ONSC 2329 at para. 60.
[^25]: Gore Mutual Insurance Co. v. TTC Insurance Co., [2004] O.J. No. 1359 (S.C.J.); Canada (Director of Investigations and Research) v. Southam Inc., 1997 CanLII 385 (SCC), [1997] 1 S.C.R. 748 at para. 35.
[^26]: Toronto Standard Condominium Corp. No. 2256 v. Paluskiewicz, 2018 ONSC 2329 at para. 59.
[^27]: Ontario First Nations (2008) Limited Partnership v. Ontario Lottery and Gaming Corporation, 2021 ONCA 592 at para. 63; Corner Brook (City) v. Bailey, 2021 SCC 29 at para. 44; IFP Technologies (Canada) v. EnCana Midstream and Marketing, 2017 ABCA 157 at para. 83, leave to appeal to the S.C.C. ref’d [2017] S.C.C.A. No. 303; Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 at paras 49-55.
[^28]: 2014 SCC 53.
[^29]: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 at paras. 68 and 69.
[^30]: J.D. McCamus, “The Supreme Court of Canada and the Development of a Canadian Common Law of Contract” Manitoba Law Journal, publication pending.
[^31]: Corner Brook (City) v. Bailey, 2021 SCC 29; Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37
[^32]: Epicor Software Corp. v. RB Packing & Seals Inc., 2017 ONSC 5959 at para. 9; Consolidated Contractors Group S.A.L. v. Ambatov Minerals S.A., 2016 ONSC 7171 at para. 34; Newport Investment Counsel Inc. v. 2033862 Ontario Inc. 2016 ONSC 6703 at para. 31.
[^33]: 2017 SCC 32.
[^34]: See items: d, e, f, g, i, l, m, n, o, p, q, r, s, t, u, v, w, x, y, aa, bb, cc, dd, ee, ff, gg, hh, ii, jj, kk, ll, mm, nn, oo, pp, qq, and rr.
[^35]: See items: h, k and z.
[^36]: See items: a, b, c, j, and ss.
[^37]: Re Canadian National Railway and Canadian Pacific Ltd. (1978), 1978 CanLII 1975 (BC CA), 95 D.L.R. (3d) 242 (B.C.C.A.); Adolph Lumber Co. v. Meadow Creek Lumber Co. (1919), 1919 CanLII 27 (SCC), 58 S.C.R. 306.
[^38]: (1978), 1978 CanLII 1975 (BC CA), 95 D.L.R. (3d) 242 (B.C.C.A.)
[^39]: 2014 SCC 53.
[^40]: Consolidated-Bathurst Export Ltd. v. Mutual Boiler & Machinery Insurance Co., 1979 CanLII 10 (SCC), [1980] 1 S.C.R. 888.
[^41]: BG Checo International Ltd. v. British Columbia Hydro & Power Authority, 1993 CanLII 145 (SCC), [1993] 1 S.C.R. 12); Scanlon v. Castlepoint Dev. Corp. (1993), 1992 CanLII 7745 (ON CA), 11 O.R. (3d) 744 (C.A.); Hillis Oil and Sales Limited v. Wynn’s Canada, 1986 CanLII 44 (SCC), [1986] 1 S.C.R. 57; McClelland and Stewart Ltd. v. Mutual Life Assurance Co. of Canada, 1981 CanLII 53 (SCC), [1981] 2 S.C.R. 6.
[^42]: Frenette v. Metropolitan Life Insurance Co., 1992 CanLII 85 (SCC), [1992] 1 S.C.R. 647.
[^43]: [1976] 3 All E.R. 570 (H.L.).
[^44]: [1971] 3 All E.R. 237 (H.L.).
[^45]: IFP Technologies (Canada) v. EnCana Midstream and Marketing, 2017 ABCA 157 at para. 83, leave to appeal to the S.C.C. ref’d [2017] S.C.C.A. No. 303; Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37 at paras. 30, 106; Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 at para. 58; King v Operating Engineers Training Institute of Manitoba Inc., 2011 MBCA 80 at para 72; Geoffrey L. Moore Realty Inc. v The Manitoba Motor League, 2003 MBCA 71 at para. 15; Investors Compensation Scheme Ltd. v West Bromwich Building Society, [1998] 1 WLR 896 at p 913 (H.L).
[^46]: IFP Technologies (Canada) v. EnCana Midstream and Marketing, 2017 ABCA 157 at para. 83, leave to appeal to the S.C.C. ref’d [2017] S.C.C.A. No. 303; British Columbia (Minister of Technology Innovation and Citizens’ Services) v Columbus Real Estate Inc., 2016 BCCA 283 at paras 40, 51; Starrcoll Inc. v. 2281927 Ontario Ltd., 2016 ONCA 275 at paras 16-17
[^47]: See items d, e, f, g, h, i, k, l, m, s, t, w, y, z, and cc
[^48]: 2017 SCC 32