Court File and Parties

Court File No.: CV-11-438361 Date: 2023-08-04 Ontario Superior Court of Justice

Between: FERMAR PAVING LIMITED, Plaintiff – and – 567723 ONTARIO LIMITED o/a WINTERS PIT, Defendant

Counsel: Charles C. Chang and Vito S. Scalisi, for the Plaintiff Marco Drudi and Tushar Sabharwal, for the Defendant

Heard: May 30, 31 and June 1, 2022, with written submissions delivered on October 11 and December 19, 2022, and January 6 and 9, 2023

Reasons for Judgment

VERMETTE J.

[1] The Plaintiff, Fermar Paving Limited (“Fermar”), brought this action against the Defendant, 567723 Ontario Limited (“567”), for breach of contract. The contract in issue was for the supply of aggregate or gravel from 567’s gravel pit (“Winters Pit”). After a trial that was heard in April 2018, 567 was found to have breached the contract and was ordered to pay damages to Fermar in the amount of $816,436.37. 567 appealed. The Court of Appeal affirmed the trial judge’s findings on liability, but allowed the appeal on the issue of damages and remitted the issue to a judge of this Court.

[2] The second trial on the issue of damages proceeded before me. Fermar sought damages falling in two categories: (a) $855,846.00 for the increased cost of gravel, and (b) $27,472.00 for out-of-pocket costs.

[3] I find that Fermar has failed to adduce evidence that is sufficiently clear, convincing and cogent to satisfy the balance of probabilities test with respect to most of the damages that it is alleging. The evidentiary issues that were identified by the Court of Appeal and that led to this second trial were not satisfactorily addressed by Fermar. Ultimately, I conclude that 567 is liable to pay to Fermar damages in the amount of $23,347.50 for certain out-of-pocket costs that were proved by Fermar. All the other damages claims are dismissed.

A. Factual Background

1. The Parties and the Agreement

[4] Fermar is an Ontario corporation that carries on business in the construction industry as, among other things, a road builder. In 2010, it was also operating a gravel pit in Ayr, Ontario.

[5] 567 is an Ontario corporation that is the legal and beneficial owner of Winters Pit. Rocco Buono is the principal of 567.

[6] On July 29, 2010, Fermar entered into a construction contract with the Ministry of Transportation of Ontario (“MTO”) to provide road construction on a portion of Highway 26 in Simcoe County (“Project”). The other parties to the contract were Fermar Crushing & Recycling Ltd., Fermar Asphalt Limited and 1458451 Ontario Limited.

[7] To complete the Project, two types of aggregate were required: granular “A” and granular “B”. The aggregate had to meet the MTO’s specifications. Granular B stone is coarser and is used for the highway bed or the subbase. Granular A is finer and is used for the top layer. In order to obtain granular A material, granular B aggregate is crushed.

[8] After hearing about the Project, Mr. Buono approached Fermar to discuss Fermar’s needs for aggregate.

[9] Following some discussion, Fermar sent a letter dated September 1, 2010 to 567 setting out the proposed terms of an agreement. Mr. Buono requested a higher price for the granular A and granular B, but he asked for no other changes. A new price was agreed upon and Mr. Buono signed the revised letter on behalf of 567 on September 3, 2010 (“Agreement”).

[10] The Agreement reads as follows:

This will confirm that F.P.L. [Fermar] has agreed to purchase granular ‘A’ and granular ‘B’ material from the Winters Pit on the following understanding:

1. The Winters Pit is licensed under the Aggregate Act pursuant to the term of the license and the plans filed in connection therewith which are attached hereto as Schedule “A”.
2. Winters Pit is owned and operated by 567723 Ontario Limited.
3. F.P.L. has been awarded a contract by the Ministry of Transportation for the construction of Hwy. 26 near Collingwood, Ontario being contract No. 2010-2010 (“the Project”)
4. F.P.L. shall purchase granular ‘B’ from Winters Pit on the following terms and conditions: (a) F.P.L. shall strip topsoil and construct berms with the said topsoil in the area marked in red ink on the attached Schedule “A”; (b) Winters Pit agrees to screen the aggregate stockpile load and to make same conform to the M.T.O. specification for the Project; (c) F.P.L. shall supply, install, certify a scale for the weighing of trucks and material; (d) F.P.L. shall pay to Winters Pit the sum of $1.84/t of granular ‘B’ material shipped over the F.P.L. scales; (e) Winters Pit warrants and represents that a minimum of 335,000 tonne of granular ‘B’ material is available to F.P.L., (f) Save and except for the foregoing, F.P.L. shall have not [sic] further obligation to rehabilitate the pit.
5. F.P.L. shall purchase granular ‘A’ from the Winters Pit on the following terms and conditions: (a) F.P.L. shall have the right to manufacture a minimum of 140,000 tonne of granular ‘A’ provided by Winters Pit; (b) Winters Pit shall load material; (c) F.P.L. shall pay to Winters Pit the sum of $1.56/t of granular ‘A’ material shipped from the pit.
6. The term of this Agreement shall be for a minimum of two years from this date hereof or until expiration of contract 2010-2010 whichever event first occurs.
7. F.P.L. agrees that all payments due to Winters Pit shall be paid promptly upon F.P.L. receiving progress payment from M.T.O.
8. F.P.L. and Winters Pit herby [sic] agree to execute such further and other documentation as me [sic] be necessary to give effect to this Agreement.

[11] A few days later, through its solicitor, 567 took the position that it could not provide as much aggregate as it was required to under the Agreement. There were discussions over several months, but no new signed agreement was reached.

[12] On or shortly after November 15, 2010, Fermar attended at Winters Pit and began to strip the topsoil and overburden. On or about November 19, 2010, Mr. Buono told Fermar to leave the site or 567 would commence proceedings for trespass.

[13] Ultimately, Fermar purchased the aggregate that it required for the Project from Walker Aggregates Inc. (“Walker”) and Brock Aggregates Inc. (“Brock”).

[14] The approximate distance between the location of the Project and the gravel pits involved in this litigation is as follows:

a. Winters Pit: 32 km b. Brock: 42.1 km c. Walker: 18.6 km

[15] On October 31, 2011, Fermar commenced an action for breach of contract against 567 and sought damages to compensate Fermar for the cost of having to source the aggregate from elsewhere.

2. Decision of the Trial Judge

[16] The trial proceeded before Justice C.J. Brown in April 2018. The trial judge released her decision on September 21, 2018 (2018 ONSC 5485). She made the following findings:

a. The Agreement was legally binding and enforceable. It was not void for vagueness or uncertainty. b. The doctrine of frustration did not apply. The Agreement was not frustrated by an annual removal limit which was known to 567 prior to entering the Agreement. c. 567 breached the Agreement by repudiating it. Mr. Buono, by his conduct, made clear that he would no longer be bound by the contract and that the contract was at an end. d. As a result of 567’s repudiatory breach of contract, Fermar was entitled to be restored to the same position that it would have been in if the Agreement had been honoured. e. Fermar was required to find other sources of aggregate in order to fulfil its contract with the MTO. Fermar was able to secure alternate sourcing, but at a greater cost that it had been able to obtain with 567. f. In addition, Fermar incurred other direct costs, equipment rental and labour for which it is entitled to reimbursement. g. The total amount of reconciled additional direct costs for purchases of granular A and granular B from alternate sources amounted to $762,849.92. Other costs were $53,586.25, for a total of $816,436.37.

[17] Accordingly, the trial judge granted the action and ordered that 567 pay to Fermar damages in the amount of $816,436.37 plus prejudgment interest and costs.

3. Decision of the Court of Appeal

[18] 567 appealed from the trial judge’s decision.

[19] The Court of Appeal upheld the decision of the trial judge on the issues of liability and mitigation of damages, but allowed the appeal of the assessment of damages and remitted the issue of quantification of damages to a judge of this Court for determination: 2020 ONCA 173.

[20] The Court of Appeal saw no error in the trial judge’s conclusion that there was a valid agreement between Fermar and 567 and that 567 repudiated that agreement. Therefore, it dismissed the appeal in respect of liability.

[21] The Court of Appeal stated the following regarding the issue of damages:

[17] The trial judge correctly held that as a result of Winter’s Pit’s repudiation of the agreement, Fermar was entitled to be restored to the position that it would have been in had Winter’s Pit met its obligation to supply all necessary aggregate. Fermar was required to find other sources of aggregate and incurred costs for equipment rental, cost of the aggregate, transportation, labour and other valid expenses. Fermar had an obligation to mitigate its losses.

[18] The trial judge awarded Fermar damages in the amount of $816,436.37, which she found to be the difference between what Fermar would have paid to Winter’s Pit and the amount it did pay to the third-party suppliers for the aggregate.

[19] In so doing, the trial judge relied on only two documents. The first was a document entitled, “Cost Summary for Alternate Sourcing of Granular “A” and Granular “B” by Supplier”, which purported to summarize approximately 1000 pages of invoices and other documents. The second was a document entitled, “Production Cost Analysis”, which compared the costs that Fermar says it would have paid to Winter’s Pit and the costs it paid to third parties for the aggregate. These documents were adduced at trial through Charles Ezomo, Fermar’s project manager.

[20] The trial judge noted that Mr. Ezomo was responsible for planning all assigned projects, preparing contracts, progress certificates, payments and completion of the projects. He oversaw the completion of this project and obtained alternate sources of aggregate. Mr. Ezomo testified that Fermar obtained the requisite Granular A from Brock Pit and Granular B, as well as some additional Granular A, from Walker’s Pit.

[21] Mr. Ezomo testified that he had to approve all invoices used in the analysis when they were originally received and did not review them again for purposes of preparing the summary. Mr. Ezomo is not an accountant.

[22] Mr. Ezomo did not do an independent analysis but prepared the cost summary based on a report generated by Fermar’s accounting department. It is not clear who prepared the accounting report. None of the source documents were produced at trial.

[23] Although the two summaries were included in a Joint Book of Documents, there appears to have been no agreement that the parties were thereby acknowledging the truth of the contents of those documents.

[24] We agree with the trial judge that Fermar is entitled to damages resulting from the repudiation of the agreement by Winter’s Pit and mitigated its losses by sourcing aggregate from elsewhere. Fermar was not required to continue to deal with Winter’s Pit, who the trial judge found was not willing to provide Fermar with any more aggregate.

[25] It is not possible on this record to calculate the amount of the appellant’s damages because the source documents were not part of the trial record, nor was there agreement on the quantum of damages at trial. Because it is not possible for this court to make the factual findings necessary to determine these issues on the existing trial record, we return these issues to a judge of the Superior Court to quantify the damages: Gholami v. The Hospital of Sick Children, 2018 ONCA 783, 2019 C.L.L.C. 210-007.

[22] The Court of Appeal’s formal order reads as follows:

1. THIS COURT ORDERS that the appeal as to liability and mitigation of damages is dismissed.
2. THIS COURT ORDERS that the appeal of the assessment of damages is allowed on terms provided in the Reasons for Decision.
3. THIS COURT ORDERS that the quantification of damages is remitted to a judge of the Superior Court of Justice for determination.
4. THIS COURT ORDERS that there be no costs with respect to this Appeal.

4. Witnesses at Trial

[23] Fermar called the following witnesses at trial:

a. Charles Ezomo, Director of Fermar’s Project Management Office. In 2010, Mr. Ezomo was one of two project managers assigned to the Project. In that role, he was responsible for the day-to-day administration of the Project, including approving invoices of subcontractors and suppliers. Mr. Ezomo started working on the Project around October 2010, when the original project manager for the Project went on vacation. Mr. Ezomo continued working on the Project after the other project manager came back from his vacation. By the end of the Project, he was the only project manager assigned to the Project as the other project manager had left Fermar. b. Steven Clay, Vice-President of Operations of Fermar. At the relevant time, Mr. Clay was Senior Operations Manager – Heavy Civil. c. Kevin Martin, Vice-President of Sales and Marketing of Fermar. Mr. Martin joined Fermar in 2009. At the relevant time, i.e., in 2010, he was an estimator project manager at Fermar, but he was not one of the estimators on the Project. He provided the estimates that are relied upon by Fermar in this trial with respect to the costs that Fermar would have had to incur had it sourced gravel from Winters Pit under the Agreement, except for the estimate for haulage costs. d. Jason Kwiatkowski, Chartered Professional Accountant and Chartered Business Valuator. Mr. Kwiatkowski was retained as an expert by Fermar to quantify the economic losses suffered by Fermar as a result of the breach of contract by 567. Mr. Kwiatkowski was qualified as an expert in financial loss and damages quantification.

[24] 567 called the following witnesses at trial:

a. Rocco Buono. b. William Fitzgerald, 567’s geological consultant. c. Vince Teti, principal of Teti Transport Ltd. Teti Transport Ltd. provided a quote to 567 for certain work to be done at Winters Pit (including relocating berms) based on pricing for the years 2011-2012.

B. Fermar’s Damages Claim

[25] Fermar’s damages claim is set out in Mr. Kwiatkowski’s expert report. [1] His report discusses three categories of damages: (1) increased cost of gravel, (2) out-of-pocket costs, and (3) lost opportunity costs associated with Fermar’s overhead expenses. In it closing submissions, Fermar stated that it was no longer pursuing a claim for damages for lost opportunity costs. Therefore, the only categories of damages discussed below are the increased cost of aggregate and Fermar’s out-of-pocket costs.

1. Increased Cost of Aggregate

[26] Fermar claims that it paid $855,846.00 more for aggregate than it would have had to pay to 567 had 567 not breached the Agreement.

[27] 188,086 tonnes of granular A and 408,014 tonnes of granular B were supplied for the Project and paid for by the MTO. These numbers are confirmed by a Progress Bill dated February 3, 2016 that Fermar submitted to the MTO in relation to the Project.

[28] Fermar’s position is that: (i) Walker supplied all the granular B and approximately 47,690 tonnes of granular A; and (ii) Brock supplied the balance of granular A, i.e., 140,396 tonnes.

[29] According to Fermar, it incurred an increased cost per tonne of: (i) $1.22 for the granular A sourced from Brock; (ii) $2.12 for the granular A sourced from Walker; and (iii) $1.43 for granular B.

[30] These increased cost figures are the result of an analysis of various costs that are related to the sourcing of granular materials, including the following:

a. Crushing costs represent the cost per tonne associated with crushing the granular materials to meet the MTO’s specifications, including transporting crushing equipment to the pit where the materials are sourced. Crushing was not required for granular B. b. Scaling and loading costs represent the costs of weighing and loading the gravel from the extraction site. c. Stripping costs represent the costs to prepare the pit for extraction of granular materials, including clearing, grubbing, stripping, fine grading and seeding of berms. There were no stripping costs to source aggregate materials at Brock and Walker because, contrary to Winters Pit, they are commercial pits that are ready for extraction. d. Quality control testing costs represent Fermar’s internal quality control testing costs associated with sourcing granular A and B materials in order to meet the MTO’s specifications. e. Extra water and compaction costs represent the additional costs incurred by Fermar to ensure that granular B material sourced from a particular pit owned by Walker met the MTO’s quality standards. This cost was deemed not to apply to Winters Pit. f. Screening costs (also referred to as scalping costs) represent the estimated cost to screen off oversized boulders from the sourced materials. There were no screening costs to source aggregate materials at Brock and Walker given that they are commercial pits. g. Haulage costs represent the costs associated with the transportation of materials from the supplier (i.e., the pit) to the construction site. h. Supplied cost represents the actual cost per tonne for granular materials sourced from Walker. It is a combined cost that includes royalty and scaling costs, which were separately accounted for Winters Pit and Brock.

[31] The increased cost for the granular A sourced from Brock ($1.22) is based on the costs set out in the table below:

Various Costs	Winters Pit	Actual (Brock)
Royalty	$1.56	$2.00
Crushing	$2.20	$2.00
Scaling and Loading	$0.25	$0.55
Stripping	$0.20	N/A
Quality Control Testing	$0.30	$0.31
Screening	$0.25	N/A
Haulage	$2.68	$3.80
Total Cost per Tonne	$7.44	$8.66

[32] The increased cost for the granular A sourced from Walker ($2.12) is based on the costs set out in the table below:

Various Costs	Winters Pit	Actual (Walker)
Royalty	$1.56	N/A
Crushing	$2.20	N/A
Scaling and Loading	$0.25	N/A
Stripping	$0.20	N/A
Quality Control Testing	$0.30	$0.31
Screening	$0.25	N/A
Haulage	$2.68	$2.75
Supplied	N/A	$6.50
Total Cost per Tonne	$7.44	$9.56

[33] The following summarizes Fermar’s evidence regarding the figures in the two tables above:

a. Royalty: The figure for Winters Pit comes from the Agreement. The actual royalty cost represents the price at which granular A was sourced from Brock. [2] b. Crushing: The figure for Winters Pit is based on Fermar management’s estimate. Fermar provided two invoices to support the reasonableness of its estimate. The actual crushing cost is based on invoices issued by Duivenvoorden Haulage Ltd. (“DH”) to Fermar for crushing at Brock. c. Scaling and loading: The figure for Winters Pit only relates to scaling because the Agreement provides that 567 is responsible for loading materials. The figure is based on Fermar management’s estimate. Fermar provided one invoice to support the reasonableness of its estimate. The actual scaling and loading cost for Brock is based on invoices issued by Michelle’s Topsoil (“MTS”) to Fermar for loader rental at Brock. d. Stripping: The figure for Winters Pit is based on Fermar management’s estimate. e. Quality control testing: All figures are based on Fermar management’s estimates. f. Screening: The figure for Winters Pit is based on Fermar management’s estimate. Fermar provided two invoices to support the reasonableness of its estimate. [3] g. Haulage: The figure for Winters Pit is based on Fermar management’s estimate. Fermar provided one invoice to support the reasonableness of its estimate. The actual haulage costs for materials sourced from Brock and Walker are based on invoices issued by MTS to Fermar. h. Supplied: The actual supplied cost is based on the invoices issued by Walker to Fermar for the purchase of granular A material.

[34] The increased cost for Granular B ($1.43) is based on the costs set out in the table below:

Various Costs	Winters Pit	Actual
Royalty	$1.84	N/A
Scaling and Loading	$0.25	N/A
Stripping	$0.20	N/A
Quality Control Testing	$0.30	$0.60
Extra Water & Compaction	N/A	$0.30
Screening	$0.25	N/A
Haulage	$2.68	$2.75
Supplied	N/A	$3.30
Total Cost per Tonne	$5.52	$6.95

[35] The following summarizes Fermar’s evidence regarding the figures in the table above:

a. Royalty: The figure for Winters Pit comes from the Agreement. b. The scaling, stripping, screening and haulage costs for Winters Pit would have been the same for granular A and granular B. [4] See the observations above regarding granular A. c. Quality control testing: Both figures are based on Fermar management’s estimates. d. Extra water & compaction: The actual cost is based on Fermar management’s estimate. e. Supplied: The actual supplied cost is based on the invoices issued by Walker to Fermar for the purchase of granular B material.

[36] At trial, it was revealed that, except for the haulage cost estimate, Kevin Martin was the person who provided the estimates regarding how much it would have cost if the aggregate materials had come from Winters Pit. [5] Mr. Martin provided these estimates to Mr. Ezomo in the fall of 2010, at Mr. Ezomo’s request, even though he was not an estimator on the Project. Mr. Martin stated that he did not obtain any quotes from subcontractors or suppliers to formulate his estimates. Further, even though Mr. Martin knew who the estimators were on the Project, he did not ask them to provide their estimates, notes, supporting documents or quotations. Mr. Martin did not produce any document, note or communication with respect to the estimates that he says he provided to Mr. Ezomo in the fall of 2010.

[37] While Mr. Martin said that he provided the costs estimates for crushing, scaling, stripping, screening and quality control testing at Winters Pit, he did not give any evidence explaining how he arrived at the various numbers.

[38] The invoices that were provided by Fermar to its expert to support the reasonableness of certain of its estimates were obtained by Mr. Martin. Mr. Martin obtained the invoices in the year preceding this trial (i.e., the second trial). According to Mr. Martin, Mr. Ezomo asked him if he had any way of finding “comparables” for the items included in the cost breakdown for Winters Pit, and the few invoices he provided were what he “was able to find”. All the invoices involve the company Louis McNichol Trucking Ltd. (“McNichol”), which is a supplier that Mr. Martin used at the company where he was working before joining Fermar. Mr. Martin contacted McNichol and asked for invoices that would have pricing broken down in the same way as the price was broken down in the cost breakdown for Winters Pit.

2. Out-of-Pocket Costs

[39] Fermar claims $27,472 for the actual costs that it incurred at Winters Pit to remove the soil and overburden from the property and prepare for the removal of granular material from the pit. These costs are as follows:

a. Labour: $1,628 b. Equipment: $1,968 c. Rented equipment: $529 d. Crushing: $1,210 e. Direct charges: $22,137

[40] These figures are based on a report entitled “Job Cost Inquiry by Cost Detail” generated by Fermar’s internal accounting system (“Job Cost Detail”). The direct charges are also supported by an invoice from McIntyre Aggregates Inc. (“McIntyre”) to Fermar dated November 15, 2010. The crushing cost (which, as discussed below, is not truly a crushing cost) is supported by an invoice from DH dated January 15, 2011.

C. Positions of the Parties

[41] Fermar’s position is that it has proven the damages that it seeks, i.e., $855,846.00 for the increased cost of gravel and $27,472.00 for out-of-pocket costs for the work performed at Winters Pit. Among other things, Fermar argues that the documents that it relies upon are admissible as business records, and that Mr. Ezomo and Mr. Martin are participant experts and/or that their opinion evidence is otherwise admissible.

[42] 567’s position is that Fermar has failed to prove the quantum sought and to adduce any admissible evidence that it has suffered any damages. In the alternative, 567 submits that:

a. Fermar was only one of four parties to the contract with the MTO for the Project and it cannot claim for damages the other three parties sustained. b. The loss analysis should stop at the termination date of September 1, 2012. c. The prohibition in 567’s licence to extract more than 100,000 tonnes of aggregate from Winters Pit per year restricts the loss to 200,000 tonnes.

D. Discussion

[43] Evidence must always be sufficiently clear, convincing and cogent to satisfy the balance of probabilities test: see F.H. v. McDougall, 2008 SCC 53 at para. 46.

[44] In Martin v. Goldfarb, [1998] O.J. No. 3403 at para. 75 (C.A.) (“Goldfarb”), application for leave to Supreme Court of Canada dismissed: [1998] S.C.C.A. No. 516, the Court of Appeal stated the following regarding evidentiary issues in the context of an assessment of damages:

[…] I have concluded that it is a well established principle that where damages in a particular case are by their inherent nature difficult to assess, the court must do the best it can in the circumstances. That is not to say, however, that a litigant is relieved of his or her duty to prove the facts upon which the damages are estimated. The distinction drawn in the various authorities, as I see it, is that where the assessment is difficult because of the nature of the damage proved, the difficulty of assessment is no ground for refusing substantial damages even to the point of resorting to guess work. However, where the absence of evidence makes it impossible to assess damages, the litigant is entitled to nominal damages at best.

[45] As set out below, I have concluded that Fermar has failed to adduce sufficiently clear, convincing and cogent evidence to satisfy the balance of probabilities test with respect to most of the damages that it is alleging. While Fermar never sourced aggregate from Winters Pit and, as a result, we will never know the exact costs that Fermar would have incurred had it done so, this does not justify Fermar’s failure to adduce admissible evidence to support its costs estimates. As stated in Goldfarb, a litigant is not relieved of its duty to prove the facts upon which the damages are estimated. In this case, evidence supporting the various costs estimates should have been available to Fermar, both internally (e.g., quality control employees) and externally (e.g., expert witnesses familiar with the aggregate business).

[46] While Fermar called an expert witness, Mr. Kwiatkowski, he had no expertise with respect to the costs involved in producing gravel. His role was limited to gathering information and estimates from Fermar management, asking Fermar – mostly unsuccessfully – for support for the estimates and actual costs figures provided, and performing simple mathematical calculations. When Mr. Kwiatkowski did receive support for estimates, he does not appear to have applied critical thinking skills to the alleged support. With respect to the actual costs incurred by Fermar, he performed very little due diligence to verify the numbers provided by Fermar. For instance, he did not conduct a review of the invoices that Fermar received from Brock, Walker, MTS and DH. In my view, Mr. Kwiatkowski added no or very little value to the estimates and costs figures put forward by Fermar. If these estimates and costs figures are unfounded, then his expert opinion has no basis. As a result, the analysis below is focused on the estimates and costs figures put forward by Fermar rather than on Mr. Kwiatkowski’s evidence.

[47] I now turn to the two categories of damages.

1. Increased Cost of Aggregate

[48] In my view, Fermar’s evidence with respect to any damages that it allegedly suffered as a result of incurring increased costs to obtain granular A and granular B is completely inadequate. This is very surprising given the Court of Appeal’s ruling on the issue of damages and the fact that Fermar was given a second chance to prove them. In light of the total lack of support for most of the estimates put forward by Fermar and Fermar’s failure for the second time to adduce cogent evidence with respect to its damages, I have to conclude that Fermar’s claim for damages with respect to the increased cost of aggregate is unfounded.

[49] There are numerous issues with the evidence put forward by Fermar. I address some of them below.

a. The Estimates Provided by Mr. Martin are Inadmissible

[50] As stated above, Mr. Martin is the person who provided the estimates with respect to Winters Pit, except for the haulage costs. The estimates provided by Mr. Martin constitute opinion evidence. This raises the question of the admissibility of this evidence as Mr. Martin did not prepare an expert report and was not qualified to testify as an expert witness.

[51] In my view, Mr. Martin’s estimates are not admissible under the lay opinion evidence rule. Estimates regarding the costs associated with the extraction and production of gravel do not fall within the categories of subjects upon which non-expert witnesses have traditionally been allowed to give opinion evidence. More importantly, such estimates are not something that ordinary people with ordinary experience are able to make. Further, this is not a situation where Mr. Martin had an opportunity for personal observation and where his opinion reflected the facts that he perceived. His estimates were not an abbreviated version of his factual observations or a “compendious statement of facts”. See Graat v. R. at 835, 837-840.

[52] I am also of the view that Mr. Martin is not a “participant expert”. A participant expert is a witness with special skill, knowledge, training or experience who has not been engaged by or on behalf of a party to the litigation, but who may still give opinion evidence for the truth of its contents without complying with Rule 53.03 of the Rules of Civil Procedure where: (a) the opinion to be given is based on the witness’ observation of or participation in the events at issue; and (b) the witness formed the opinion to be given as part of the ordinary exercise of their skill, knowledge, training and experience while observing or participating in such events. See Westerhof v. Gee Estate, 2015 ONCA 206 at paras. 60-61.

[53] Mr. Martin’s opinion is not based on his observation of, or his participation in, the events in issue. There is no evidence that Mr. Martin went to Winters Pit or that he had any involvement with 567 or in sourcing aggregate for the Project. As stated above, Mr. Martin was not one of the estimators assigned to the Project. Further, Mr. Martin’s estimates were not made at the time the Agreement was entered into in September 2010. Since Mr. Ezomo did not start working on the Project until October 2010, Mr. Ezomo could not have asked Mr. Martin to provide estimates before October 2010. I note that there were already issues between Fermar and 567 at that time. There is no evidence before me as to why Mr. Ezomo requested estimates from Mr. Martin in the fall of 2010. Based on the evidence, I find that it is more likely than not that Mr. Ezomo requested the estimates after Fermar was told by 567 to leave Winters Pit, i.e., after the dispute between the parties had crystallized.

[54] Mr. Martin’s opinion regarding the invoices from McNichol as “comparables” is clearly not the opinion of a participant expert. The invoices were sought in the context of the litigation, many years after the underlying events.

[55] Even if Mr. Martin’s opinion with respect to the cost estimates at Winters Pit was admissible, I would not give any weight to it. This is because he provided no reasons for his opinion. Expert witnesses must provide reasons for their opinion: see Rule 53.03(2.1)6 of the Rules of Civil Procedure. What Fermar is asking this Court to do is to accept unconditionally the estimates provided by its own estimators, without any explanation or support, just because they said so.

[56] I find that the comparables provided by Mr. Martin after the fact are not reliable. Among other things:

a. Mr. Martin has no knowledge with respect to the background, context and details of the invoices put forward as comparables. Without more information, it is not possible to determine whether the invoices provided are appropriate comparables. b. The comparables provided to support each estimate were either non-existent or very limited in number (i.e., one or two). Further, all the invoices involved the same company, McNichol. There is no evidence before me that McNichol could have worked on the Project. Given that Fermar is a substantial company that is involved in tens of construction projects every year and owns a gravel pit, it is very perplexing that it could not provide more comparables. c. The invoices relied upon as comparables were not considered by Mr. Martin in the process of formulating his estimates. Rather, they were located after the fact, many years later, to support numbers that had already been put forward in the litigation. Mr. Martin did not seek true comparables with an open mind. His objective was to find invoices that could support specific numbers, without inquiring about the circumstances in which the invoices were issued and whether such circumstances made the invoices appropriate comparables. This is compounded by the fact that Mr. Martin, as an employee of Fermar, is not a disinterested witness. In light of the foregoing, I am unable to conclude that the few comparables that were provided are fair and representative.

[57] I note that Fermar argues in its closing submissions that Mr. Ezomo should be recognized as a participant expert. However, none of the estimates come from Mr. Ezomo. Mr. Ezomo did not give opinion evidence. He simply gathered estimates and information to prepare Fermar’s damages claim. His evidence does not and cannot support the validity or reasonableness of the estimates.

b. The Estimate for Haulage Costs for Winters Pit is Not Reliable

[58] The actual haulage costs for Brock and Walker, which are supported by invoices from MTS to Fermar, were $3.80 per tonne and $2.75 per tonne, respectively. Fermar’s estimate for Winters Pit is $2.68 per tonne. This estimate was provided to Mr. Ezomo by an unknown person in Fermar’s estimating department (Mr. Martin expressly stated that he did not provide an estimate for haulage costs).

[59] The $2.68 per tonne estimate, in addition to being inadmissible opinion evidence from an unknown person, is seriously undermined by the following:

a. In July 2010, at Fermar’s request, MTS provided a quotation to Fermar to transport gravel from Winters Pit to the location of the Project. The quoted price was $3.50 per tonne (trailer). It is unknown why this number was not used by Fermar in its claim for increased cost, especially since MTS was the trucking company used by Fermar for the Project. b. Given that Winters Pit is 13.4 km further from the Project location than Walker, it does not make sense that the haulage costs for Winters Pit would be lower than the haulage costs for Walker.

[60] In his report, Mr. Kwiatkowski stated that haulage costs from commercial pits are typically higher as compared to dedicated pits such as Winters Pit due to longer loading times experienced at commercial pits. However, no evidence was adduced on this point by any of the witnesses, and Mr. Kwiatkowski does not have the required knowledge and expertise to give evidence on this issue. Further, this statement appears to be contradicted by the quotation by MTS referred to above.

[61] Mr. Kwiatkowski also referred to an invoice dated June 30, 2010 from McNichol to Fermar showing a haulage cost of $2.50 per tonne. However, this invoice does not support anything as it does not indicate the distance for which this rate was charged.

c. The Estimates for the Costs Related to Quality Control Testing and Extra Water and Compaction are Unsupported

[62] Fermar has its own quality control department. Therefore, the quality control testing costs ($0.30/t for Winters Pit, $0.31/t for granular A at Brock and Walker, and $0.60/t for granular B) are all internal costs and they are all estimates. They were provided to Mr. Ezomo by others at Fermar. While Mr. Martin stated that he provided the estimate for quality control testing costs for Winters Pit, he did not provide the estimates for Brock and Walker. It is unknown who did. Further, no support whatsoever was provided for these figures (e.g., number of employees involved, time spent, etc.), whether by Mr. Martin or anyone else. Among other things, no explanation was provided as to why quality control testing would cost $0.01 more at Brock and Walker for granular A than at Winters Pit.

[63] The difference in the estimates for granular B at Winters Pit and Walker is significant (i.e., $0.30/t vs. $0.60/t). Mr. Ezomo gave evidence at trial that the figure for “actual” quality control testing costs is higher for granular B because of compaction issues that Fermar encountered with respect to some of the granular B material sourced from a particular pit owned by Walker. As a result, Mr. Ezomo said, increased testing was required.

[64] However, Mr. Ezomo’s evidence on this point was brief and general, and he stated that he did not know the quantity of granular B for which extra water and compaction was required. He confirmed that extra water was not needed for all the granular B. Despite this, the charge for extra water and compaction and the higher charge for quality control testing were applied to the entire quantity of granular B. Mr. Ezomo also did not know the quantity of water that Fermar applied to some of the granular B. While Mr. Ezomo said that he believed that Fermar hired water trucks for this purpose, I was not pointed to, and I did not see, any documents or invoices in support of this claim. Mr. Ezomo stated that the figure for extra water and compaction came from Fermar’s estimating department, even though this is allegedly an actual cost that Fermar incurred. Mr. Ezomo did not do any analysis of invoices or timesheets to determine the actual costs incurred.

[65] In light of the foregoing, I conclude as follows:

a. The increased costs for quality control testing and extra water and compaction do not apply to the entire quantity of granular B. They only apply to a smaller and unknown quantity of granular B. b. In any event, the estimates provided for these costs are not supported by any evidence and are inadmissible opinion evidence provided by an unknown person.

d. Numerous Source Documents Were Not Provided

[66] The Court of Appeal noted in its reasons that, during the first trial, Fermar relied on a document entitled “Cost Summary for Alternate Sourcing of Granular “A” and Granular “B” by Supplier” (“Cost Summary”) which purports to summarize hundreds of invoices. The Court of Appeal noted that: (a) Mr. Ezomo prepared the Cost Summary based on a report generated by Fermar’s accounting department and he did not do an independent analysis; (b) it is not clear who prepared the accounting report; (c) none of the source documents were produced at trial; and (d) there was no agreement between the parties acknowledging the truth of the contents of the Cost Summary.

[67] The same Cost Summary was relied upon by Fermar during the second trial. Surprisingly, most of the Court of Appeal’s observations are still applicable: (a) Mr. Ezomo still had not done an independent analysis; (b) it is unknown who prepared the accounting report; (c) while some source documents were produced at trial, a significant number of them were missing; and (d) there was no agreement between the parties acknowledging the truth of the contents of the Cost Summary.

[68] With respect to the source documents, a substantial number of invoices listed in the Cost Summary were not produced at trial and no explanation was provided for their absence. In fact, their absence was not even acknowledged by Fermar. Further, with respect to some of the invoices that were produced, there were discrepancies between the amount recorded in the Cost Summary and the amount shown on the invoice. Again, no explanation was provided for these discrepancies or, more generally, with respect to how the Cost Summary was put together. While summaries are often helpful, the production of original documents is usually required: see R. v. Scheel, 42 C.C.C. (2d) 31 at 34-36 (Ont. C.A.) and R. v. Ajise, 2018 ONCA 494 at paras. 23-24.

[69] Without the source documents, it is not possible to determine, among other things: (a) the quantity of granular A supplied by Brock and Walker, respectively; and (b) whether certain charges (e.g., loader rental) were applied to the entire quantity supplied or only part of it.

[70] The following analysis with respect to the costs that Fermar alleges it incurred for the loading of granular A at Brock illustrates the evidentiary issue raised by Fermar’s failure to produce source documents and/or marshal that evidence properly.

[71] Fermar claims that it paid $0.55/t for scaling and loading at Brock. While this cost is said to be based on invoices issued by MTS to Fermar for loader rental at Brock, the specific invoices were not identified by any of Fermar’s witnesses, including its expert who said that he did not conduct an exhaustive review of the invoices. 567 stated in its written closing submissions that it had found one invoice with a loader rental charge. In its reply closing submissions, Fermar identified for the first time some invoices with a loader rental charge by their invoice number, without additional detail.

[72] Given the lack of clarity and the unsatisfactory evidence and submissions on this point, I undertook the task of reviewing and searching MTS’s invoices (more than 1,000 pages). I have located the following invoices from MTS to Fermar referring to a loader rental charge (the list below includes at least 20 invoices that were not contained in Fermar’s list in its reply submissions):

a. invoice dated July 25, 2011 which includes a charge for “Loader-Brock Pit” at a unit price of $0.55 applied to a quantity of 157.85 tonnes for a total of $86.82; b. invoice dated July 26, 2011 which includes a charge for “Loader-Brock Pit” at a unit price of $0.55 applied to a quantity of 533.04 tonnes for a total of $293.17; c. invoice dated July 27, 2011 which includes a charge for “Loader-Brock Pit” at a unit price of $0.55 applied to a quantity of 499.44 tonnes for a total of $274.69; d. invoice dated July 28, 2011 which includes a charge for “Loader-Brock Pit” at a unit price of $0.55 applied to a quantity of 960.87 tonnes for a total of $528.48; e. invoice dated July 29, 2011 which includes a charge for “Loader-Brock Pit” at a unit price of $0.55 applied to a quantity of 150.59 tonnes for a total of $82.82; f. invoice dated August 2, 2011 which includes a charge for “Loader-Brock Pit” at a unit price of $0.55 applied to a quantity of 1,052.56 tonnes for a total of $578.91; g. invoice dated August 3, 2011 which includes a charge for “Loader-Brock Pit” at a unit price of $0.55 applied to a quantity of 1,048.92 tonnes for a total of $576.91; h. invoice dated August 4, 2011 which includes a charge for “Loader-Brock Pit” at a unit price of $0.55 applied to a quantity of 1,034.73 tonnes for a total of $569.10; i. invoice dated August 11, 2011 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 628.33 tonnes for a total of $345.58; j. invoice dated August 12, 2011 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 1,547.11 tonnes for a total of $850.91; k. invoice dated August 17, 2011 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 525.19 tonnes for a total of $288.85; l. invoice dated August 22, 2011 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 158.13 tonnes for a total of $86.97; m. invoice dated November 16, 2011 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 1,938.84 tonnes for a total of $1,066.36; n. invoice dated November 17, 2011 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 1,846.5 tonnes for a total of $1,015.58; o. invoice dated November 18, 2011 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 1,236.77 tonnes for a total of $680.22; p. invoice dated April 2, 2012 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 243.65 tonnes for a total of $134.01; q. invoice dated April 3, 2012 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 157.96 tonnes for a total of $86.88; r. invoice dated April 4, 2012 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 895.43 tonnes for a total of $492.49; s. invoice dated April 5, 2012 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 236.95 tonnes for a total of $130.32; t. invoice dated April 9, 2012 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 274.52 tonnes for a total of $150.99; u. invoice dated April 11, 2012 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 275.84 tonnes for a total of $151.71; v. invoice dated April 12, 2012 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 276.87 tonnes for a total of $152.28; w. invoice dated April 17, 2012 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 1,458.49 tonnes for a total of $802.17; x. invoice dated April 18, 2012 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 1,799.26 tonnes for a total of $989.59; y. invoice dated April 19, 2012 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 781.96 tonnes for a total of $430.08; z. invoice dated April 20, 2012 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 786.66 tonnes for a total of $432.66; aa. invoice dated April 23, 2012 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 814.33 tonnes for a total of $447.88; bb. invoice dated April 25, 2012 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 812.75 tonnes for a total of $447.01; cc. invoice dated April 26, 2012 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 816.61 tonnes for a total of $449.14; dd. invoice dated April 27, 2012 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 883.68 tonnes for a total of $486.02; ee. invoice dated April 30, 2012 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 815.37 tonnes for a total of $448.45; and ff. invoice dated May 15, 2012 which includes a charge for “Loader Rental-Brock Pit” at a unit price of $0.55 applied to a quantity of 1,793.99 tonnes for a total of $986.69. [6]

[73] In addition, there are two handwritten invoices showing a loader rental for certain quantities, without a unit price: (i) 495.74 tonnes on May 13, 2011; and (ii) 1,335.14 tonnes on November 15, 2011. Assuming that a $0.55 unit price was also charged, the amounts charged would be $272.66 on May 13, 2011 and $734.33 on November 15, 2011.

[74] The invoices set out above establish a loader rental charge for 28,274.07 tonnes. However, Fermar claims damages with respect to 140,396 tonnes of granular A sourced from Brock. This leaves 112,121.93 tonnes for which there is no evidence that a $0.55 charge was applied for loader rental.

e. Conclusion

[75] Given the lack of evidence with respect to the costs to obtain granular A and granular B at Winters Pit (leaving aside all the other evidentiary issues identified above), it is not possible to conclude that the cost of obtaining aggregate at Brock and Walker was higher than it would have been at Winters Pit. Therefore, I decline to award damages to Fermar for an alleged increased cost of gravel.

[76] In light of my conclusion, I do not need to address 567’s argument that Fermar’s analysis does not capture all of the costs to source granular A and granular B at Winters Pit. I note, however, that most of the additional costs put forward by 567 do not appear to be meritorious and/or are in search of complete mathematical precision, which is impossible to attain in a “but for” scenario which never occurred.

2. Out-of-Pocket Costs

[77] As stated above, Fermar claims $27,472 for the actual costs that it incurred at Winters Pit to remove the soil and overburden from the property and prepare for the removal of granular material from the pit. These costs are as follows:

a. Labour: $1,628 b. Equipment: $1,968 c. Rented equipment: $529 d. Crushing: $1,210 e. Direct charges: $22,137

[78] These figures are based on the Job Cost Detail.

[79] In my view, the Job Cost Detail is not admissible as a business record under section 35 of the Evidence Act, R.S.O. 1990, c. E.23. In R. v. Felderhof, 2005 ONCJ 406 at para. 26 (“Felderhof”), Hryn J. listed the following eight requirements for admissibility of records under section 35:

a. Record made on some regular basis, routinely, systematically b. of an act, transaction, occurrence or event, c. and not of opinion, diagnosis, impression, history, summary or recommendation d. made in the usual and ordinary course of business e. if it was in the usual and ordinary course of business to make such record, f. pursuant to a business duty g. at the time of such act or within a reasonable time h. and where the record contains hearsay, both the maker and informant must be acting in the usual and ordinary course of business.

[80] Very little evidence was adduced about how the Job Cost Detail was created. The evidence adduced by Fermar does not establish that the Job Cost Detail meets the requirements above. Among other things, there is no evidence as to who prepared this record (or who entered the information in the accounting system) and whether this type of record is made on a regular basis and in the usual and ordinary course of business.

[81] I also note that the Job Cost Detail summarizes information. It was not itself prepared to record an “act, transaction, occurrence or event”. While the source documents used to prepare this document (e.g., timesheets of employees, invoices for rented equipment, etc.) would record an act, transaction, occurrence or event, not all the source documents have been produced at trial. A summary type of record is not the type of record contemplated by section 35 of the Evidence Act: see Felderhof at paras. 53-58, 61-62, 76, 174, 214

[82] There is also no evidence as to when the information reflected in the Job Cost Detail was entered into Fermar’s accounting system, when the Job Cost Detail was created and whether it was created at the time of the “act, transaction, occurrence or event” that it records or within a reasonable time thereafter.

[83] Even if the Job Cost Detail was admitted as a business record for the truth of its content, it is insufficient in itself to establish that the costs that it reflects are damages that were caused by 567’s breach of contract and for which Fermar should be compensated. Among other things:

a. There is no evidence as to what the labour costs ($1,628) relate to. I note that some of the labour costs were incurred on August 31, 2010, which is before the Agreement was entered into. b. There is no evidence as to the equipment for which $1,968 is claimed (e.g., what kind of equipment it was and what it was used for). Again, I note that some of the equipment costs were incurred on August 31, 2010, before the Agreement was entered into. c. There is no evidence about the “rented equipment” for which $529 is claimed. Again, this cost was incurred on August 31, 2010, before the Agreement was entered into. d. There is no evidence about any crushing costs. The Job Cost Detail describes the costs as “Crushing (Processor) Costs” and indicates that the “Date Worked” is November 30, 2010, which is after Mr. Buono told Fermar to leave Winters Pit. While there is no evidence that any crushing was performed at Winters Pit on November 30, 2010, there is an invoice to Fermar by DH that reflects the following work on November 30, 2010 for which $1,210 was charged:

Float Service – Relocate plant from Grey Rd. 4 in Maxwell to Brock Pit Maxwell re: Customer changed mind once entire unit was delivered

e. The Job Cost Detail refers to two “Direct Charges”: one in the amount of $57.95 incurred on November 20, 2010 and one in the amount of $22,137.00 incurred on November 15, 2010. It appears from the report of Mr. Kwiatkowski that Fermar is only seeking reimbursement for $22,137. While the Job Cost Detail does not contain any information about what the direct charges relate to, the $22,137 charge is supported by an invoice from McIntyre to Fermar for hoe rental, rock truck rental, and 14C dozer rental at Winters Pit on November 15, 16, 17, 18 and 19, 2010 in the amount (before tax) of $22,137.50.

[84] In light of the foregoing, I find that Fermar has established that it incurred out-of-pocket costs at Winters Pit in the amount of $23,347.50 ($1,210 paid to DH and $22,137.50 paid to McIntyre) for which it should be compensated as a result of 567’s breach of contract. Mr. Ezomo confirmed during his testimony that Fermar paid these costs and did not obtain reimbursement from anyone with respect to them.

[85] 567 argues that Fermar should not be compensated for the work done by McIntyre at Winters Pit because McIntyre allegedly caused damage to Winters Pit by, among other things, not creating berms in accordance with 567’s licence and stockpiling topsoil and overburden in a manner that did not comply with the licence. I reject this argument. 567 did not counterclaim for the alleged damages caused by McIntyre and it is beyond the scope of the second trial ordered by the Court of Appeal to assess damages allegedly suffered by 567. It does not appear that 567 raised these arguments during the first trial or on appeal. Further, and in any event, it is 567 who asked Fermar and McIntyre to leave Winters Pit in November 2010. Therefore, 567 is not in a position to complain that McIntyre did not complete its work and/or correct certain issues.

[86] Accordingly, I conclude that Fermar is entitled to damages in the amount of $23,347.50 for out-of-pocket costs incurred at Winters Pit.

3. Arguments Raised by 567

[87] I address briefly below some of the arguments raised by 567, even though most of them are moot as a result of my findings above.

[88] The fact that Fermar is only one of four parties to the contract with the MTO for the Project is irrelevant. The Agreement is between Fermar and 567. Brock, Walker, McIntyre, MTS and DH issued invoices to Fermar. Fermar is the party that suffered damages (or would have suffered damages) as a result of 567’s breach of contract.

[89] 567 submits that, given the terms of 567’s licence, it would have been unlawful for Fermar to extract more than 200,000 tonnes of aggregate during the term of the Agreement. Therefore, the quantum of the aggregate for which damages are awarded should be restricted to 200,000 tonnes. I reject this argument as the issue of illegality has already been argued and rejected by both the trial judge and the Court of Appeal. See, e.g., paragraphs 89, 97, 101-102 and 104 of the trial judge’s decision and paragraphs 11 and 14d) of the Court of Appeal’s decision. I also note that the Court of Appeal stated at paragraph 17 of its reasons that “Fermar was entitled to be restored to the position that it would have been in had Winter’s Pit met its obligation to supply all necessary aggregate.” [Emphasis added.]

[90] 567 argues that Fermar’s damages analysis should stop at the termination date of September 1, 2012. Section 6 of the Agreement states that the term of the Agreement “shall be for a minimum of two years from this date hereof or until expiration of contract 2010-2010 whichever event first occurs.” Under section 6, Fermar could have terminated the Agreement on September 1, 2012. Given this, I agree with 567 that Fermar cannot claim damages for aggregate purchased after September 1, 2012. The assessment of damages for breach of contract requires only a determination of the minimum performance that the plaintiff was entitled to under the contract, i.e., the performance which was least burdensome for the defendant: see Hamilton v. Open Window Bakery Ltd., 2004 SCC 9 at paras. 13, 20. Under the Agreement, 567 had no obligation to supply aggregate after September 1, 2012. The need to determine the costs incurred by Fermar as of September 1, 2012 is another reason why the source documents would be required.

E. Conclusion

[91] 567 is liable to pay damages to Fermar in the amount of $23,347.50, plus prejudgment interest.

[92] If costs cannot be agreed upon, both sides shall deliver submissions of not more than five pages (double-spaced), excluding the bill of costs, by August 18, 2023. Both sides can deliver responding submissions of not more than three pages by September 1, 2023.

Vermette J. Released: August 4, 2023

Footnotes

[1] Mr. Kwiatlkowski made some “oral changes” to his report during his testimony to reflect the fact that Walker provided some of the granular A to Fermar. His report assumed that the entire quantity of granular A came from Brock.

[2] 567’s position is that the price that Fermar paid to Brock for granular A was $1.64/t, not $2.00/t. 567 points out that the remaining $0.38 was for an environmental charge and a levy charge. 567 argues that Fermar did not produce any evidence to indicate that the environmental charge and levy charge would not have been payable by Fermar if the granular A had come from Winters Pit. I reject this argument. The Agreement clearly states that Fermar “shall pay to Winters Pit the sum of $1.56/t of granular ‘A’ material shipped from the pit.” The Agreement does not provide for the imposition of any additional fees or charges, and 567 did not point to any regulatory or statutory provision making such a charge legally mandatory.

[3] I note that the Agreement states in section 4(b) that “Winters Pit agrees to screen the aggregate stockpile load and to make same conform to the M.T.O. specifications for the Project”. Despite this term in the Agreement, Fermar did not take the position that Winters Pit was responsible for screening costs with respect to granular B and/or granular A.

[4] 567 argues that while the Agreement states that Winters Pit is responsible for loading granular A material, it does not provide for the same obligation with respect to granular B. Consequently, 567 submits that loading costs should be added to the costs of obtaining granular B from Winters Pit. Given my conclusions below, I do not need to determine this issue and to engage in a contractual interpretation exercise which was not the object of this second trial. However, I note that no rationale was offered as to why 567 would have the obligation to load granular A but not granular B. I also note that Fermar’s obligations to strip and to supply a scale are only set out in the granular B section of the Agreement, even though stripping and scaling would also be required for granular A. It does not seem to me that, in structuring the Agreement between granular A and granular B in the way that they did, the parties intended to create two watertight silos of obligations.

[5] Kevin Martin was not called as a witness at the first trial.

[6] I note that there are handwritten notes on some of the invoices that could suggest that the charge for the loader rental may not have been paid. However, I infer from my review of all the invoices that Fermar did pay for these charges. It appears that Fermar preferred paying for haulage and loader rental separately, and issued two separate cheques for one invoice if the two charges were included in the same invoice.