Court File and Parties

COURT FILE NO.: CV-19-0527-00 DATE: 2023-05-01

ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

Finn Way General Contractors Inc. Plaintiff

M. Marrie, for the Plaintiff

- and -

Lakehead University Defendant

J. Lester, for the Defendant

HEARD: April 21, 2023, at Thunder Bay, Ontario Mr. Justice W. D. Newton

Decision On Motion

Overview

[1] The plaintiff, Finn Way General Contractor Inc. (“Finn Way”), seeks leave to admit expert evidence from Mr. Aurelis at trial.

[2] The defendant, Lakehead University (“LU”), opposes the admission of expert evidence arguing that the expert report was served late and that, in any event, expert opinion evidence is not necessary in this case.

Background of the Action

[3] Based on the pleadings and the affidavits filed on the motion, the background facts are as follows. LU contracted with Finn Way as general contractor for the construction and renovation of the Centre for Advanced Studies in Engineering and Sciences. The contract was pursuant to a CCDC2 form with a contract price of over $18,000,000.

[4] During construction LU initiated changes. Change orders were accepted and Finn Way was paid on the basis of the change orders.

[5] According to paragraph 6 and 7 of the Statement of Claim, Finn Way “indicated the contract time extension it required for each change, being its estimate of the extended duration of the Project by reason of” the change orders. Finn Way pleads that LU and its consultants “did not object to the proposed increases in contract time indicated in the Change Requests….”

[6] On August 1, 2018, Finn Way delivered a change request form seeking $200,424.86 in “extension costs” of five months of additional insurance, supervision, site office, fencing, site housekeeping labour costs, and lost profit totaling approximately $150,000 and a delay quote relating to Cardinal Roofing for an additional approximately $40,000. This change request was not approved by the consultant.

[7] LU pleads at paragraph 5 of the Statement of Defence “that “ inter alia ” Finn Way has already been compensated for these costs through full payment under approved Change Orders.”

[8] Other issues are raised such as Finn Way’s failure to follow the dispute resolution provisions under the contract.

Litigation Chronology regarding Expert Report

• Oct 21, 2021 pretrial before Pierce J. – no mention of any requirement for expert report
• Aug 19, 2022 Finn Way serves trial record and Aurelis expert report
• mid Oct, 2022 parties agree on trial date for May 2023 running list
• Feb 10, 2023 LU raises issues with respect to late delivery and admissibility of expert report for first time at trial management conference and directions given with respect to motion
• Apr 19, 2023 motion seeking leave to deliver Aurelis expert report

Positions of the Parties

[9] The parties agree that Rule 53.08(1) provides that the trial judge may grant leave to admit a late served expert report if the party seeking to admit same satisfies the judge that:

(a) there is a reasonable explanation for the failure; and

(b) granting the leave would not,

(i) cause prejudice to the opposing party that could not be compensated for by costs or an adjournment, or

(ii) cause undue delay in the conduct of the trial.

[10] Finn Way states there is a reasonable explanation for the delay as the Rules do not contemplate a pretrial taking place before an action is set down for trial. Finn Way acknowledges that the Rules require expert reports to be served 90 days prior to pretrial but submits that the expert report was served before the action was set down. Thus, Finn Way argues that its explanation as to timing is reasonable.

[11] Further, Finn Way argues that LU is not prejudiced because the report was delivered before the action was set down for trial and two months before the trial date was agreed upon. Finn Way argues that had LU had an objection based on prejudice, that objection should have been made upon delivery of the report in August 2022, and not approximately six months later, at the trial management conference.

[12] LU argues that there is no reasonable explanation for the delay and that, according to the affidavit filed by LU on the motion:

…. based on the report of Mr. Aurelis this would be a paradigm shift in the litigation. I am advised by Mr. Lester and believe it to be true that further pleading amendments and examinations for discovery would be required to address this change in position.

[13] In its factum, LU suggests that an adjournment and costs thrown away may be “one way to address this issue”. LU does not state that LU would need to retain its own expert to respond.

[14] The main thrust of LU’s opposition to admission of the expert opinion is that the report is unnecessary, as it usurps the role of the trial judge. LU relies upon the reasoning in White Burgess Langille Inman v. Abbott and Haliburton Co..

[15] In response, Finn Way states the delay claims are ordinarily advanced through expert testimony and relies on this single statement from Schindler Elevator Corporation v. Walsh Construction Company of Canada:

In the absence of a reliable expert assessment of critical path delay on the WCH Project or clear evidence supporting a finding regarding Schlinder’s impact on the overall critical path, I cannot ascertain the extent of Schlinder’s responsibility, if any, for critical path delay on the overall project.

[16] These submissions on the necessity of the expert opinion require close scrutiny of the report.

The Aurelis Expert Report

[17] The report consists of seven pages and six appendices. The core of the report consists of five observations and a conclusion set out below, without Figure 1 and footnotes:

4.0 OBSERVATIONS

4.1 Change Order 5 (CO #5.0) - New Library Sanitary Manhole R1: The work required under this Change impeded excavation work. The pertinent events leading to CO #5.0 are as follows:

• RFI #92 issued – April 20, 2017
• RFI response – April 21, 2017
• CO #5.0 issued – May 2, 2017

This activity commenced on May 3, 2017 and finished on May 12, 2017 with an impact of 65 Working Days to Substantial Performance.

4.2 Change Order 65.1 (CO #65.1) - Costs for New Parapets at Lines 1, 4, H and G REV The new parapets were paramount to roofing works on the Building Addition aspect of the Work with further knock-on successor activities. The pertinent events leading to CO #65.1 are as follows:

• RFI #177 issued – September 17, 2017
• RFI response – September 25, 2017
• PCN #96.0 issued – October 4, 2017
• PCN #96.1 revised – October 17, 2017
• CO #65.1 issued – November 3, 2017

This activity started on November 3, 2017 and finished on December 1, 2017 resulting in 95 Working Days delay to Substantial Performance.

4.3 Change Order 68.0 (CO #68.0) - Solar Shades: This new requirement delayed the installation of the south curtain wall to allow for reinforcing for fixing the solar shades. The curtain wall reinforcement is additional work requiring more time. The pertinent events leading to CO #68.0 are as follows:

• RFI #104 issued – May 15, 2017
• RFI response – August 25, 2017
• CO requested – September 20, 2017
• CO #68.0 issued – November 3, 2017

The associated engineering work was completed at the end of January 2018 and the solar shade colour sample was approved on February 16, 2018. Work on the installation of the south curtain wall commenced in March 2018 and was completed by the end of May 2018. This work appears to have had no knock-on effect on successors or otherwise connected activities.

4.4 Change Order 93.0 (CO #93.0) - Biomass Lab Nitrogen Outlets Adjacent FH-1 Hoods (REV-1): The work associated with the new nitrogen wall outlet did not unduly impact any successor activities. The pertinent events leading to CO #93.0 are as follows:

• CO #93.0 issued – February 9, 2018
• Work commenced in May 2018
• Work completed by June 15, 2018

The activities under this task started on February 9, 2018 and finished by June 15, 2018.

Schedule impact shown on Figure 1 below.

4.5 Change Order 126.0 (CO #126.0) - Exit Signs: This included the relocation and addition of exit signs. The pertinent events leading to CO #126.0 are as follows:

• CR #76E issued – June 8, 2018
• CR response – June 25, 2018
• CO #126.0 issued – June 26, 2018

This activity started on July 11, 2018 and finished on August 21, 2018. This activity impacted Substantial Performance by 77 Working Days.

5.0 FINDINGS & CONCLUSION

Recognizing that the schedule is a dynamic project planning and management tool, individual activities introduced to the project were assessed individually to observe changes to the Critical Path. Subsequently, as deemed appropriate, analysis of schedules considered multiple events based on timing.

Based on my analysis of the schedules, it is my opinion that the changes identified in Section 4 above resulted in 133 Working Days delay to Substantial Performance as follows and further summarized in Figure 1 – Impacts Summary :

The New Library Sanitary Manhole ( CO #5 ) and New Parapets at Lines 1, 4, H and G ( CO #65.1 ) collectively delayed Substantial Performance by 95 Working Days as shown on Appendix C . I have been informed that this activity also impacted the

• work of the roofing subcontractor – Cardinal Roofing & Sheet Metal Inc. The Contractor has assessed delay costs of $40, 800 plus 10% fee.
• The introduction of solar shade to the south curtain wall ( CO #68 ), did not alter the critical path and therefore had no impact on Substantial Performance of the work.
• The new nitrogen wall outlet required under CO #93 and the relocation of exit signs ( CO #126 ) collectively delayed Substantial Performance by 77 Working Days as shown on Appendix D .

Based on my review of the Contractor’s Summary of General Requirements, it is my assessment that the above-listed Change Orders resulted in 6 months delay to Substantial Performance. The Contractor was nonetheless able to accelerate to achieve Substantial Performance by September 27, 2018. Such delays resulted in additional costs in the order of CA$231,500.00 plus HST.

[18] Figure 1 is a summary of the delays. The footnotes are references to the Appendices.

[19] To reach these observations, Mr. Aurelis reviewed the schedules, the contract, the change order register, the payments, and the pleadings.

Analysis and Disposition

[20] Subject to my comments about necessity I would grant leave for “late” delivery of the expert report.

[21] I accept that LU was surprised by the change in position taken by Finn Way in the production of an expert report about 10 months after the pretrial when there is no indication that an expert report would be required. I note the tactical decision made by Finn Way to serve the report first and then set the action down for trial. No reason was advanced to justify the change in position that an expert report was required.

[22] However, given the timing of the pretrial and the delivery of the expert report, I reluctantly accept that there was a reasonable explanation for the failure to meet the requirements for delivery of the expert report.

[23] The real consideration is prejudice, and given that the report was received approximately eight months ago, and that no objection was made until six months later, I conclude that there is no prejudice to LU. I do not accept LU’s argument that an amendment to the pleadings and further discovery is required. There is no suggestion from LU that they wish to retain their own expert. I find no prejudice to LU in allowing delivery of this expert report after pretrial.

[24] The issue is necessity. This is not a case of “piling on” as argued by LU in its factum. The present case is distinguished from Davies v. The Corporation of the Municipality of Clarington in which the trial judge was faced with 18 expert witnesses.

[25] In the Schindler Elevator decision, the associate judge referred to the Bruff-Murphy et al. v. Gunawardena decision of the Court of Appeal released after the White Burgess Langille Inman v. Abbott and Haliburton Co. decision of the Supreme Court of Canada. In Bruff-Murphy, the Court of Appeal summarized the two main components of the law relating to the admissibility of expert evidence as follows:

[35] The first component requires the court to consider the four traditional "threshold requirements" for the admissibility of the evidence established in R. v. Mohan, [1994] 2 S.C.R. 9: (i) relevance; (ii) necessity in assisting the trier of fact; (iii) absence of an exclusionary rule; and (iv) the need for the expert to be properly qualified.

[36] The second component is a "discretionary gatekeeping step" where "the judge balances the potential risks and benefits of admitting the evidence in order to decide whether the potential benefits justify the risks": para. 24. It is a cost-benefit analysis under which the court must determine whether the expert evidence should be admitted because its probative value outweighs its prejudicial effect.

[26] I am only concerned with the first component – necessity in assisting the trier of fact.

[27] In this case, the proposed expert has reviewed the same evidence the trial judge will be called upon to review. In the passage relied upon by counsel for the plaintiff from Schindler Elevators the reference is to the absence of reliable expert assessment or clear evidence supporting delay. It is up to Finn Way to adduce clear evidence supporting delay. I find that the expert report does meet the necessity requirement as there is no indication in this case that expert evidence is required to determine delay.

[28] Further, the observations made by the proposed expert are conclusions. There is no clearly described analysis tying in the appendices to these conclusions. At trial, the trial judge could not permit amplification of the opinion on matters clearly not discernible from the expert report. The opinion is of no assistance to the trier of fact because no justifications for the conclusions are clearly discernible.

[29] For the foregoing reasons, the testimony of the proposed expert, Mr. Aurelis, is not admissible at trial.

[30] If the parties are unable to agree on costs, then the party seeking costs may make costs submissions within 15 days of the release of this decision with any response received 10 days after. Cost submissions are limited to three pages plus costs outline.

“Original signed by”

The Hon. Mr. Justice W.D. Newton

Released: May 1, 2023