COURT FILE NO.: CV-16-566616

CV-18-601982

CV-18-600128

DATE: 20231218

ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE No. CV-16-566616

BETWEEN:

S & R FLOORING CONCEPTS INC.

Angela Assuras, for the plaintiffs

Plaintiffs

– and –

ROSSCLAIR CONTRACTORS INC. c.o.b. as ROSSCLAIR CONTRACTORS and c.o.b. as ROSSCLAIR CONTRACTORS and ANN C. RICHARDSON and KATHY HOGEVEEN and JOHN E. RICHARDSON a.k.a. SEAN RICHARDSON

Defendants

AND BETWEEN:

ROSSCLAIR CONTRACTORS INC.

Plaintiffs

– and –

EPOXY SOLUTIONS INC.

Defendant

AND BETWEEN:

ROSSCLAIR CONTRACTORS INC.

Plaintiff

– and –

FLOWCRETE NORTH AMERICA, INC. AND ADJUVANTS EUCLID CANADA INC. / EUCLID ADMIXTURE CANADA INC. C.O.B. AS FLOWCRETE and SURFACE DESIGN SYSTEMS INC

Defendants

HEARD:

HEARD:

Kenneth Movat for the defendants

COURT FILE No.: CV-16-601982

Kenneth Movat for the plaintiff

Manshu Luo for the defendant

COURT FILE NO.: CV-18-00600128

Kenneth Movat for the plaintiff

Michael Round for the defendants Flowcrete North America Inc. and Adjuvants Euclid / Euclid Admixture Canada Inc

HEARD: May 15-18, 23-26, 29-31,

June 1-2, 2023

KOEHNEN J.

REASONS FOR JUDGMENT

Contents

Overview.. 3

A. The Parties and their Claims. 4

B. The Facts. 5

C. S & R’s Claim Against the Defendants. 12

D. Rossclair’s Claims. 13

I. Responsibility for the Selection of SR.. 16

II. Claims in the Scott Schedule. 18

i. Contract Work. 18

ii. Remediation for Deficiencies. 20

iii. Discolouration of the Floor 20

iv. Staining on Floor 22

v. Ponding. 23

vi. Delamination. 23

vii. Flaking. 25

viii. Drains. 26

ix. Cracks in Flooring. 26

x. and xi. Rossclair’s Counterclaim.. 27

Friction and Hardness. 29

III. The Claim Against Flowcrete. 30

IV. The Claim Against Epoxy Solutions. 31

V. The Claim Against Surface Design Solutions. 31

Disposition and Costs. 33

Overview

[1] These reasons involve three actions that were tried together. The first action involves a claim by a flooring contractor for unpaid invoices of $308,251.18 plus an additional amount of $4,339.20 on account of services that were not invoiced. The services relate to the installation of a concrete urethane coating on top of a concrete subfloor in a Toronto brewery. The general contractor defendant resists the claim because it alleges that the floor was installed in a deficient manner and must be replaced. The general contractor counterclaims for $4,244,928 for the cost of removing the floor and for the cost of shutting down the brewery while the floor is being replaced.

[2] In the second and third actions, the general contractor claims against the flooring contractor’s subcontractors who actually carried out the work and against the manufacturer of the flooring product that was installed.

[3] For the reasons set out below I grant the contractor’s claim against the general contractor for unpaid invoices, dismiss the general contractor’s counterclaim; dismiss the general contractor’s actions against the flooring subcontractors, and dismiss the general contractor’s claim against the manufacturer of the flooring product.

[4] I find that there were no defects in the floor that are attributable to the flooring contractor, its subcontractors or the manufacturer.

[5] While there may have been some staining and discolouration of the floor, that was a cosmetic, not a functional issue. In addition, those issues were caused by a combination of poor maintenance by the brewery and the general contractor having chosen a flooring product other than the one that was specified by the project designer without obtaining the designer’s approval. The general contractor was given a choice between two different flooring products. It chose the cheaper, less robust product without inquiring into the differences between the two options. The general contractor did so despite its client’s instruction to use only first grade materials.

[6] Many of the issues about which the general contractor complained were the result of later work that the general contractor had done to the floor by others who are not parties to these proceedings.

[7] Finally, the evidence disclosed that the floor has stood up well over time, has not inhibited the success of the brewery that operates on the premises and that the floor would, in any event, be at or near the expiry of its ordinary life.

A. The Parties and their Claims

[8] The plaintiff, S & R Flooring Concepts (“S & R”) is a flooring contractor that provides flooring services of various types throughout Ontario.

[9] The defendant Rossclair Contractors Inc. (“Rossclair”) is a general contractor that conducts business throughout Ontario. Rossclair was hired by Brunswick Brewery (the “Brewery”) to renovate an old industrial building in Toronto and convert it into a brewery. Rossclair has been in business for approximately 50 years. The defendant Sean Richardson has worked at Rossclair for 30 years and has been its President for 24 years.

[10] Rossclair hired S & R to install a concrete urethane floor covering onto a bare concrete subfloor at the Brewery. At the time, S & R had no previous experience with this sort of flooring.

[11] S & R claims $308,251.18 on account of unpaid invoices. S & R also claims $4,339.20 for extra work that it says it did but did not invoice.

[12] Rossclair counterclaims against S & R for damages of $4,277,928.01 for the cost of removing and replacing the concrete urethane Brewery floor which Rossclair alleges was negligently installed. The counterclaim includes both the cost of replacing the floor and the cost of shutting down the Brewery to do so. The Brewery is not a party to the litigation.

[13] Rossclair has also commenced two separate actions. One against Surface Design Systems Inc., Flowcrete North America Inc., and Adjuvants Euclid Canada Inc. / Euclid Admixture Canada Inc.; and a second against Epoxy Solutions Inc. In each of its two actions, Rossclair claims damages of $2,800,000 from the defendants on account of costs that it has incurred or will incur to repair the Brewery floor.

[14] Surface Design Systems Inc. (“Surface Design”) is the flooring subcontractor that S & R hired to install the concrete urethane floor at the Brewery.

[15] Epoxy Solutions Inc. is a party that Rossclair alleges is a further subcontractor that S & R hired to finish and /or repair portions of the floor after Surface Design left the project. It appears that the actual party that S & R retained was a company related to Epoxy Solutions named Epoxy Flooring & Painting Inc.

[16] Flowcrete North America Inc. is the manufacturer of the flooring product that Surface Design/S & R installed at the Brewery. Adjuvants Euclid / Euclid Admixture Canada Inc. is the distributor of the Flowcrete product in Canada. For purposes of these reasons, there is no need to distinguish between Flowcrete and Adjuvants Euclid / Euclid Admixture Canada Inc. As a result, both will be collectively referred to as Flowcrete.

[17] Flowcrete has joined as third parties to the action in which it is a defendant, both S & R and Epoxy Flooring.

[18] Despite the seeming complexity arising from the number of parties and proceedings, the fundamental issue is relatively simple: was the floor deficient and, if so, who should bear responsibility for the deficiencies.

B. The Facts

[19] Sean Fleming is the 50% owner of the brewery. He testified that his directions to Rossclair were that he did not want to “cut corners.” He wanted the “best suppliers.” He wanted things “high-end.” He intended to have clients and the public tour through the Brewery and did not want to have a reputation of being “second-class.”

[20] To this end, an architect and a designer were hired to design the Brewery. The designer, Mackay | Wong Strategic Design (the “Designer”), issued specifications down to the brand and product type used for every aspect of the project (the “Specifications”). Section 2.1.1 of the Specifications called for two urethane cement products manufactured by the German chemical giant BASF for the floor: Ucrete HF in the production area and Ucrete HP in the tasting room. Both in grey.

[21] A urethane cement coating is one of several possible coatings that is applied to a concrete subfloor. Urethane coatings are often used in the food and beverage industry because they can withstand the thermal shock to which floors in that industry are constantly subject by virtue of the need for frequent washing. Other coatings cannot withstand the hot water or the caustic / acidic cleaners used in the industry while urethane can.

[22] As it turns out, neither Rossclair nor the Brewery followed the Specifications for flooring. The BASF product was not used. Instead, a product manufactured by Flowcrete was used. The grey colour the Designer had specified for use throughout the Brewery was not used. Instead, the Brewery chose grey for the walkways and a dark blue colour for the production areas.

[23] The possibility of using Flowcrete at the Brewery first arose when Richard Gobbatto, Flowcrete’s sales representative for Canada, was approached by two flooring subcontractors, Protec and Northfleet. Both wanted to bid on the Brewery project but were unable to obtain BASF product. Both asked Gobbatto to see if he could get Flowcrete approved for the project. In response to this request, Gobbatto made a cold call to Rossclair and dropped off product literature, including the Flowcrete brochure, at the front desk.

[24] The Flowcrete brochure[^1] provides general suggestions about what Flowcrete product to use in different parts of a brewery. The suggested product for production areas is Flowcrete HF. Gobbatto described this as a workhorse product that was most widely installed. Flowcrete HF is the Flowcrete equivalent of BASF Ucrete HF, the product the Designer had specified.

[25] Approximately one week after Gobbatto dropped off the literature, Richardson requested a meeting with him. Gobbatto met with Richardson for approximately one hour and explained that he was there on behalf of two contractors who could not get BASF product. Gobbatto told Richardson that the appropriate Flowcrete product for the production area was Flowfresh HF and the product for the tasting room was Flowfresh SR.[^2]

[26] Gobbatto then received a call from Richard Cuthbert, the principal of Surface Design. Gobbatto had worked with Cuthbert for several years. Cuthbert described a project that Gobbatto identified as the Brewery and asked for a good, better and best options. Gobbatto took this to mean that Cuthbert wanted a price on the cheapest system that would do the job, a mid priced system and a high end system. In response, Gobbatto told Cuthbert that the Specifications for the job called for HF and asked why he was considering anything else. Gobbatto told Cuthbert not to consider the “good” option because it would not last. Gobbatto was not asked either in chief or in cross-examination to identify the “good” Flowcrete system that he thought would not last. I mention that only because Flowcrete has three concrete urethane systems: SR, RT and HF, in order of increasing durability.

[27] Gobbatto then gave Cuthbert pricing on the Flowfresh SR and HF products which Gobbatto described as the better and best systems. Given that Gobbatto was not challenged on this point, I accept his evidence about the characterization of SR and HF as better and best.

[28] It appears that Cuthbert then sent S & R a quote of some sort which was not produced at trial. I draw this inference because the quote that S & R submitted on March 15, 2016 proposed "two operatives." That is a somewhat unusual turn of phrase. A later proposal that Surface Design sent to S & R also proposed "two operatives." Cuthbert agreed that the expression "two operatives" probably came from an initial email that he had sent S & R proposing two products.

[29] To this point, Gobbatto had not had any discussions with Richardson about installing the SR product and Cuthbert had not yet received a copy of the Specifications that called for the Ucrete HF product.

[30] On March 15, 2016 S & R sent Rossclair a bid containing “two operatives”: Flowcrete HF at a price of $8.00 sq. ft. or $172,688.00 plus HST and Flowcrete SR at a slightly lower price of $7.75 square foot or $167,291.50 plus HST. The email described HF as having a continuous temperature resistance of 220°F and SR as having a continuous temperature resistance of 200°F to which the email added “slightly less than Flowcrete HF.”

[31] Surface Design submitted its proposal to S & R on April 8, 2016.[^3] It proposed “two operatives”. The first applied to the larger production area of 21,566 ft.² using Flowcrete HF. The second applied to a smaller, “optional” area of 2,214 ft.² using Flowcrete SR. The significant point in this quote is that Surface Design proposed Flowcrete HF for the entire production area. S & R’s email of March 15, 2016 had given Rossclair an option of using either HF or SR for the production area. It does not appear that S & R clarified its earlier proposal of two options for the production area after it received Surface Design’s proposal to use only HF.

[32] The difference between the two products is that HF is a more robust, heavier duty, longer-lasting floor product that is better able to withstand heavy use. It is applied to the floor by way of trowels, almost like a cement. SR is described as a slurry. It is not as robust or long-lasting, is lighter weight, and syrup-like. It is more able to spread itself across a floor and is evened out using a squeegee type tool.

[33] S & R described the SR product as a slurry in its email of March 15, 2016 in which it proposed HF or SR.

[34] On April 11, 2016 Rossclair sent a purchase order for the SR product to S & R.[^4]

[35] The following day, on April 12, 2016 Rossclair advised that it wanted a particular blue colour and needed enough for 2000 ft.² in very short order. Rossclair attached the Flowcrete colour chart and circled the blue that it wanted. The bottom of the chart indicated that “colours shown are for preliminary colour guidance only and may vary in colour, texture and sheen of actual product.”[^5] The Flowcrete brochure warns that its product is not necessarily colour fast.[^6]

[36] Gobbatto then received a call from either Cuthbert or Richardson asking for product for two mechanical rooms to be done on the coming weekend. At that point, Cuthbert still had not seen the Specifications and appears not to have been told which Flowcrete product the Brewery had chosen. Cuthbert assumed it was HF because that is what his quote proposed. Gobbatto did not have enough Hf material to install in both rooms. He therefore suggested that he provide Flowcrete RT for one room and HF for the other. Gobbatto was told that the colour was blue.

[37] Both mechanical rooms were finished on April 17, 2016 using the RT and HF products in blue.

[38] Although Fleming was satisfied with the floor finish, he did not like the colour of the finished floor. The blue that had been applied in the two mechanical rooms was the blue available for cementitious urethane (i.e. HF or RT) and was produced under the heading “Cementitious Urethane Pigment Packs” in the Flowcrete brochure that Rossclair and Fleming had. Michael Weeks from Rossclair showed Gobbatto a darker blue colour in a different section of the brochure[^7] and indicated that this was the colour the owner wanted. The darker blue to which Weeks pointed was located under the heading “Epoxy Colour Packs” which was applicable to the SR product. Gobbatto advised that the only blue that was available was the one that had been used in the two mechanical rooms. Weeks then asked what could be done to achieve the blue epoxy colour.

[39] I digress here for a moment to distinguish between flooring systems. There are two fundamental types of floor coatings relevant to this action: concrete urethane coatings and epoxy coatings. Concrete urethane coatings are substantially more robust and durable than epoxy coatings. While the two terms are sometimes (incorrectly) used interchangeably, there is a material difference in the chemical composition of the two. As noted, there are differences in grade even within concrete urethane coatings. It was not contested at trial that the Flowcrete SR product was a concrete urethane coating and not an epoxy coating.

[40] Returning to the factual narrative, after Gobbatto and Weeks discussed options, a decision was made to apply SR sealer on top of the HF and RT floors in the mechanical rooms. On April 22, 2016 Cuthbert provided S & R with a quote for the additional cost of applying a colour sealer.

[41] On April 26, 2016, Cuthbert demanded and received a copy of the Rossclair purchase order. At that point, Cuthbert realized that Rossclair had ordered the SR product. He therefore sent S & R a revised quotation on April 27 with the price for the SR product in the entire production area rather than the HF product that he had quoted before. He then called Gobbatto and advised that Rossclair had ordered the SR product. Surface Design then proceeded with the SR product that Rossclair had requested. There were no conversations between the parties to explain that the floors in the mechanical rooms were laid with products different than the one that Rossclair had ordered or that Surface Design would be installing.

[42] Cuthbert then proceeded to install the SR floor in dark blue in several stages.

[43] This led to a variety of disappointments and frustrations on both sides. Rossclair and Fleming were unhappy with the overall look of the floor and with its colour. Disappointment with the look of the floor arose because they had seen the HF and RT products in the mechanical rooms with which they were happy but for the colour. The appearance of the SR product differed from the HF and RT products. It does not appear that Rossclair or the Brewery were alive to the difference between the SR product on the one hand and the HF or RT product on the other. It does not appear that either S & R, Cuthbert or Flowcrete brought that to their attention during the discussions surrounding the appearance of the floor.

[44] Rossclair and Fleming were also unhappy with the colour of the blue. It did not appear consistent to their eyes and had a sheen to it that they found undesirable.

[45] At the time, Cuthbert and Flowcrete attributed the variation in colour to a number of factors including water from overhead pipes dripping onto the newly installed floor, the floor being covered at too early a stage before it had been properly cured, excessive heat while the floor was curing, and the natural variation in colour characteristic of the product. I accept all of those as causes for the variation in colour and tone. Gobbatto also concluded that the client’s issues with the floor were cosmetic and did not affect its functionality.

[46] Rossclair and Fleming viewed these responses as a lack of accountability on the part of S & R, Surface Design and Flowcrete.

[47] One of the conditions included in the S & R quotation of March 15, 2016 was that air-conditioning would be made available at no cost to S & R. The building contained no air conditioning when Surface Design was working on the floor. At trial, Rossclair responded to this by saying it had provided fans. Fans, however, do not regulate temperature.

[48] When Rossclair and Fleming continued to be unhappy, Flowcrete sent its technical expert, Doug Dompert to examine the floor. His report is dated August 3, 2016. It notes that the product was properly applied and that there was no problem with either the product or the sealer. He attributed the colour variation in the blue pigment to water dripping onto the wet sealer. He noted that the colour variation does not compromise the product’s chemical resistance or physical characteristics. This only further angered the Brewery and Rossclair.

[49] Rossclair denied the presence of any water from the pipes because its witnesses maintained there was no water running through them. They could not, however, explain contemporaneous photographs showing water underneath pipes that were under construction. Condensation can also occur on piping without water being in the pipe. Rossclair’s site supervisor Sean Haughey also conceded on cross-examination that water could be run through the pipes to see if they were functioning properly.

[50] Cuthbert attributed the visual deficiencies to the floor having been covered sooner than it should have been during the drying cycle. Cuthbert testified that the floor should be allowed to dry for 72 hours before being covered. According to Cuthbert, Rossclair said that could not be done because it had brewing tanks coming in that had to be installed. According to Cuthbert, those areas that had been allowed to dry for 72 hours before being covered exhibited no visual blemishes. Cuthbert says he told Rossclair about the 72 hour drying requirement. The only written document in this regard is an email from Cuthbert to Rossclair dated Sunday April 24, 2016[^8] which, among other things, says:

The Flowfresh SR sealer is a semi-flexible antimicrobial treated cementitious urethane sealer. The total cure to get 100 % hard is 5 to 7 days from date of installation. As of Monday coming the sealer will only be 2 days old. We suggest to place a good grade of construction paper throughout, and as added protection, place plywood over top to protect against unsightly damages, gouges etc., while installing the white panelling.

We also recommend that you(r) staff place the tanks/boilers in this area down without dragging across the newly installed floor sealer to further protect against damages caused by others.

We are arriving tomorrow to place the cove base in the other open area, then hence install the floor surface. I anticipate we will be done by Wednesday of this week, to which the principles apply over the newly installed cementitious system and sealer (sic).

[51] That email is somewhat ambiguous. The early part of the email suggests that 5 to 7 days of curing is required but that as of Monday, the sealer would be only two days old. This suggests further drying is required. The final paragraph is slightly more ambiguous. It indicates that Cuthbert would be finished by Wednesday. The final clause of the final sentence, “to which the principles apply over the newly installed cementitious system and sealer” suggests that a covering should be applied but does not say when. Should the cover be put on 5 to 7 days after the Wednesday on which Cuthbert has finished or should it be put on as soon as Cuthbert has finished. Read as a whole, the overriding message in the email is that the floor requires 5 to 7 days to dry. The ambiguity in the email appears to be caused by someone writing the email quickly without proof reading it. It would not be an overtly onerous imposition on the recipient of the email to follow up for more precise instructions.

[52] As time went on Rossclair blamed its unhappiness with the floor on Cuthbert rather than on the difference between the HF and SR products of which Rossclair remained unaware. For example, it complained about an inadequate number of workers, poor workmanship and crews not showing up until late in the day. Cuthbert’s response at trial was that there was no purpose in arriving sooner because the floor was drying and could not be worked on.

[53] Cuthbert in turn had his own frustrations in working with Rossclair. Rossclair would insist on immediate action but when Cuthbert’s crews arrived to take immediate action, the floor was not ready to work on because it was filled with pallets or equipment or the floor was wet. This led to Cuthbert bringing crews from St. Catherine’s (where he was based) to Toronto only to find that they could not work on the floor.

[54] By way of example, on August 17, 2016 Cuthbert wrote to Michael Steiner, the principal of S & R, complaining that an area of approximately 1,800 ft.² to which he was supposed to apply flooring was not even ready to work on and that he had recently been told that it would not be ready for another two months.[^9]

[55] The lack of air conditioning has already been referred to. Cuthbert experienced further frustration with inadequate power supply. A further condition of S & R’s quote of March 15, 2016 was that Rossclair would satisfy specifically enumerated power requirements.

[56] As it turned out, there was limited power on the property which had to be shared with other trades. The power that was supplied was at least at one point wired improperly which destroyed the motor of equipment Cuthbert was using. In addition, other workers on the site would walk or drive over the newly installed floor section leaving footprints and tire marks which required Cuthbert’s crews to redo the flooring area they had just completed.

[57] As of July 14, 2016 Rossclair confirmed in an email that the flooring project was 80% complete, although Rossclair and the client continued to be unhappy with its appearance. By this time S & R was pressing Rossclair for at least partial payments which were not forthcoming. On the same day, S & R sent an invoice billing for 80% of the work done at $113,423.64. That invoice was not paid.

[58] As frustrations continued to mount, Rossclair’s emails became laden with disparaging adjectives and expletives.

[59] At trial, Rossclair tended to blame Surface Design for the problems. It complained that Surface Design would promise to show up but would not show up or would show up with inadequate personnel. Rossclair also maintained that it followed Cuthbert’s instructions about covering the floor.

[60] By September 2016 Rossclair began complaining about water ponding on the new floor and the lack of sloping in the floor. The evidence at trial was that the floor had to be sloped between 1% and 2% so that fluids would flow to drains placed throughout the Brewery. That was not, however, part of the work that S & R was contracted to do. Sloping of the floor is done at the stage of laying the concrete subfloor, not when applying the urethane coating. Moreover, the SR product is a syrupy slurry which follows the incline of the floor so it would not be the cause of any ponding issues.

[61] By early September, Surface Design became so frustrated in dealing with Rossclair that it stopped working on the project. S & R then brought in a new subcontractor, Epoxy Flooring & Painting Inc. to complete the work. The principle of Epoxy Flooring is Roger Hilderbrand.

[62] Hildebrand also complained about areas of the floor that he was required to work on not being ready and about having to redo areas because others had walked over the floor while work was being done.

[63] Scheduling delays continued well into the fall. Exhibit 2 is a video taken on or about November 9, 2016. It shows an area that S & R’s contractors had shown up to work on. It was clearly not a ready worksite. There are large stacks of pallets loaded with goods and equipment throughout the area as well as construction materials throughout the area. Ultimately, in December 2016 Rossclair excluded S & R from the property.

C. S & R’s Claim Against the Defendants

[64] In addition to suing Rossclair, S & R has also joined as defendants to its action Anne Richardson, Kathy Hogeveen and Sean Richardson. There was no evidence led about Anne Richardson or Kathy Hogeveen. I therefore dismiss the action against them. Although there was not much evidence at trial about Sean Richardson’s involvement, there was no evidence nor was there any argument made that would lead me to ascribe personal responsibility for any of the events at issue to Richardson. I therefore dismiss the action against him as well. That leaves Rossclair as the defendant in the action by S & R.

[65] S & R’s claim against Rossclair is based on $303,911.98 of unpaid invoices

[66] Steiner was walked through the invoices and summaries of them during his examination in chief to establish the claim for $303,911.98.[^10] Steiner was not challenged on these invoices during cross-examination or even taken to them. Nor was Steiner challenged on the amount owing under any of the individual invoices.

[67] In closing argument, Rossclair argued that there was double billing among the invoices claimed. The amounts of the allegedly double billed invoices are not identical. Allegations of double billing were not put to Steiner in cross-examination as a result of which S & R had no opportunity to respond to them. Similarly, no Rossclair witness spoke about alleged errors or double billing. In those circumstances I am not able to give any weight to the allegations of double billing.

[68] Rossclair’s defence throughout the trial was based on a denial of liability for any amounts owing because of allegedly defective workmanship rather than on disputes about double billing. As a result, S & R is, prima facie, entitled to judgment in the amount of $303,911.98 subject to Rossclair’s counterclaim.

[69] S & R also claims and additional $4,339.20 for extra work it says it did but for which it did not invoice.[^11] S & R did not raise this additional work until closing argument. Since there was no evidence led about it, I decline to award judgment for it.

D. Rossclair’s Claims

[70] Whether S & R can collect on its prima facie judgment depends on whether Rossclair succeeds in its counterclaim or its claims against other parties. Before turning to the merits of Rossclair’s claims against others, I address two preliminary issues that: the actual form of contract with S & R and the reliability of witnesses.

Which of the two forms of contract governs?

[71] There is some debate between the parties about the actual form of the contract.

[72] S & R says its quotation is the contract.[^12] Rossclair says that its purchase order is the contract.[^13] Given my findings about who is responsible for the various issues and the reasons for that responsibility, the potentially different forms of the contract are irrelevant to my findings. Since, however, the issue was raised at trial, I will nevertheless address it, albeit in more summary form.

[73] I find that the S & R quotation is the governing form of contract.

[74] Both documents call for signatures by both parties. Neither party signed the other’s document.

[75] During the course of the flooring work, S & R and its sub-contractors complained about Rossclair’s failure to satisfy certain pre-conditions to their ability to work which also happened to be conditions of the S & R document.[^14] Rossclair never disputed that it was responsible for meeting those conditions.

[76] On the other hand, Rossclair’s document contains a number of provisions that were not followed. These include clause 2 relating to the certification of progress payments by a consultant; clause 3 relating to payment of progress payments within 30 days; clause 10 relating to repair of deficiencies after receipt of a formal deficiency notice; clause 13 requiring billings to set out the progress of work as a percentage of the complete subcontract; clause 14 requiring a formal request by a contractor to use subcontractors.

[77] Rossclair was alive to all of these issues while the work was proceeding but never raised any concerns about them.

[78] The Rossclair document also referred to an additional set of standard terms and conditions to construction contracts referred to as CCA-1 2008, which were incorporated by reference into the Rossclair purchase order. That document was not entered as an exhibit at trial. In closing argument, counsel for Rossclair took me to section 7.1 of CCA-1 2008. It provides that if a contractor does not adequately complete the work, the general contractor may require the contractor to remedy the issue within a prescribed time, failing which the general contractor can complete the work itself and charge the contractor for the cost of completion.

[79] I do not find anything material in that provision. Had I found S & R to be in default of its obligations, and had Rossclair incurred expenses to remedy those defaults, I would have found S & R liable for those costs regardless of whether section 7.1 of CCA-1 was formally included in the written contract.

Reliability of Witnesses

[80] As a general observation, I found Rossclair’s evidence to be unreliable. Its two principal witnesses were its site supervisor at the Brewery, Haughey and its President, Richardson.

[81] It was Haughey’s job to supervise all subtrades. Haughey maintained a schedule that set out the times at which each contractor was scheduled to do what work on the project. It was his role to control access to the site. Contractors signed in and out on sheets that he maintained. Haughey also kept a daily journal that recorded which contractor was doing what when. If there were difficulties or hiccups in the project they would be recorded in Haughey’s journal. The journal would record the nature of the problem and who caused it. Haughey also held daily site meetings of which he kept notes including notes of any problems that needed correcting.

[82] Despite the detailed nature of these documents, none were contained in Rossclair’s two affidavits of documents nor were they otherwise produced during the litigation. Those documents would have provided substantial assistance on issues such as whether the floor was ready for Surface Design to work on, whether Surface Design did or did not show up as scheduled, whether power and air conditioning were available, when the floor was covered and whether others were working in the floor area when S & R or its subcontractors were supposed to be.[^15] Given Rossclair’s failure to produce any of these documents which could have corroborated its complaints, where the evidence of Rossclair witnesses differs from that of others, I prefer the evidence of the other witnesses.

[83] As noted above, Richardson was Rossclair’s President. I found him to be an unreliable witness. As a result, where his evidence differs from that of others, I prefer the evidence of the other witnesses.

[84] Richardson was very much focused on the big picture and does not appear to have had patience for detail. His emails were, more often than not, full of bluster and demands rather than constructive suggestions to find solutions to problems.[^16] His emails are replete with demands that things be done within hours or within a day, when as noted above, flooring areas were frequently not ready to be worked on.

[85] He tended to expect others to solve his problems without any input from himself. By way of example, when Steiner wrote a series of emails asking Richardson what he wanted as a solution, Richardson could not articulate anything other than to say that Steiner knew what Richardson wanted or to make a general assertion that he wants a floor that the client can accept.

[86] Richardson’s evidence at trial was prone to inconsistency and overstatement. By way of example, at one point Steiner wrote to Richardson asking Richardson what he could do to solve the problem. Steiner listed a number of potential solutions including compensation. Richardson never replied to that email. However, on September 20, 2016 Richardson wrote Steiner an email[^17] complaining that he got the owner to accept compensation to avoid a full scale removal of the floor but that Steiner had failed to honour the commitment for compensation. That statement is problematic for three reasons. First, there is no evidence that Richardson ever communicated the owner’s alleged agreement to Steiner. Second, Steiner’s email was not a commitment to compensation but was an invitation for Richardson to discuss a number of possible solutions to the problem, one of which was compensation. Third, when cross-examined about the point at trial, Richardson said that Steiner had asked him to get Fleming to think about compensation but that Fleming’s partner was not interested and just wanted the floor fixed. That, however, means that the email of September 20, 2016 is incorrect in saying that the owner had agreed to compensation.

[87] In other instances, Richardson complained that “all of the tiles” fell off of walls when a few tiles appear to have fallen off. In a similar vein, Richardson complained that he had written the President of Flowcrete and that he had gotten no response. In fact, Richardson had written the Vice President and received a chain of correspondence from him and Flowcrete’s technical expert, Douglas Dompert. While Richardson may not have liked the responses he received from Flowcrete, he definitely received responses.

[88] My concerns about the reliability of Rossclair’s evidence also extends to its expert. Both parties retained experts in flooring and floor coverings. Rossclair retained Brian O’Farrell. The plaintiff retained Murray Heywood. Both were qualified and admitted as experts in flooring and floor coverings. Both have directionally similar experience and qualifications. Where their evidence differs, I prefer the evidence of the plaintiff’s expert, Heywood. As will become apparent when progressing through the Scott Schedule, the difficulty with O’Farrell’s report is that it is based on a number of incorrect assumptions, most of which are attributable to incomplete or incorrect information that he received from Rossclair.

[89] Turning now to Rossclair’s claims against others, writ large, Rossclair’s reason for not paying S & R’s invoices is that the floor was negligently installed. This claim breaks down into the following sub-issues:

I. Who is responsible for the use of the SR product rather than the HF product?

II. Does Rossclair have a claim in respect of the 11 items set out on the Scott Schedule that the parties created?

III. Does Rossclair have a claim against Flowcrete?

IV. Does Rossclair have a claim against Epoxy Solutions or Epoxy Flooring?

V. Does Rossclair have a claim against Surface Design?

I. Responsibility for the Selection of SR

[90] As noted earlier, it appears that Surface Design sent a quote to S & R that proposed Flowcrete HF for the production area and SR for a second, optional, non-production area. S & R in turn offered Rossclair a choice of either Flowcrete HF or Flowcrete SR for the entire Brewery.

[91] Richardson says he was not aware of the differences between HF and SR and relied on S & R to give him an appropriate product. I do not accept that position in the circumstances of this case.

[92] Rossclair had detailed Specifications from the Designer that called for specific products, BASF Ucrete HF and HP; and a specific colour, grey, throughout the Brewery. Rossclair did not follow the Specification and chose Flowcrete SR for the entire Brewery, much of it in dark blue.

[93] Neither Rossclair nor the Brewery ran the change in product or colour by the Designer.

[94] Immediately following the specification of BASF Ucrete HF and HP the Specifications state:

Substitutions: Refer to Section 01 60 00

[95] Rossclair has produced only selected portions of the Specifications in its affidavit of documents even though S & R asked for production of the full Specifications. The excerpts Rossclair produced did not include the section that deals with substitutions.

[96] It would be common for Specifications of this nature to require that any substitutions be approved by the Designer to ensure that the substitution does not create any issues.

[97] Whatever the content of section 01 60 00 and its requirements for substitutions, Richardson admitted on cross-examination that Rossclair did not follow the provision but simply let the owner override the Specifications.

[98] Section 1.4.2 of the Flooring Specifications[^18] required Rossclair to provide data about specified products that set out their physical and performance characteristics, sizes, patterns and colours. As noted, flooring was specified as BASF U Crete HP and U-Crete HF in section 2.1 of the Flooring Specifications. Had Rossclair conformed with the Specifications and sent the Designer the product data sheets for the flooring product it was using, the Designer would have known that Rossclair was proposing to use Flowcrete SR in dark blue colour instead of the grey U- Crete HP and HF as it had recommended. That would have allowed the Designer to engage with Rossclair and Fleming on the consequences of that choice.

[99] If Rossclair was going to depart from the Specifications, it did so at its own risk. There were obvious ways of protecting against that risk. One was to either have or acquire a level of knowledge about the differences in products so that one could make an informed decision. If Rossclair did not have that knowledge, it should have made inquiries of the Designer to determine whether Flowcrete SR was a satisfactory alternative.

[100] Richardson had deep personal experience as a contractor. He had been president of Rossclair for 24 years. Recall that the S & R quote contained different prices for the HF and SR products and noted that SR had a lower temperature tolerance. In addition, it described SR as a slurry. In my view, when an experienced general contractor receives a quote for two products, with different prices and different temperature tolerances, the general contractor should be aware that the product with the higher price and higher temperature tolerance is probably the more durable and robust product.

[101] Despite what Fleming described as his instruction to Richardson to use the best products and to not be “second-class”, Rossclair chose to proceed with a different product, a different grade and a different colour than specified, all without consulting the Designer. Fleming was not even aware that he had a choice between SR and HF. Richardson could not explain why SR was chosen over the HF. On that record I can only assume that Rossclair chose SR based on its lower cost which would presumably improve Rossclair’s profit margin.

[102] Just as it should come as no surprise to an experienced general contractor that there are different grades of product, it should also come as no surprise that its trades require supervision from product selection to job completion. It is not acceptable for a general contractor to simply offload responsibility to contractors and subcontractors without making any effort to ensure that they are meeting contract Specifications. In the circumstances, responsibility for selection of the SR ought to rest with Rossclair.

II. Claims in the Scott Schedule

[103] The parties worked together to prepare a Scott Schedule which was marked as Exhibit A at trial. Although some of the matters addressed in it have already been dealt with above, I will address each item here to ensure that there is a specific finding with respect to each entry.

i. Contract Work

[104] Item 1 of the Scott Schedule addresses contract work. Rossclair says no amount is owing on the S & R invoices because of poor workmanship.

[105] A simple deficiency in the work performed does not entitle a contracting party to refuse payment. A contracting party will be relieved of payment for the entire contract only where there has been a “substantial failure of performance.” [^19]

[106] In 968703 Ontario Ltd. v. Vernon,[^20] the Ontario Court of Appeal set out the following five factors to consider when determining whether or not a breach amounts to a substantial failure of performance that entitles an innocent party to refuse to perform its obligations under the contract: (a) the ratio of the party’s obligation not performed to the obligation as a whole; (b) the seriousness of the breach to the innocent party; (c) the likelihood of repetition of the breach; (d) the seriousness of the consequences of the breach; and I the relationship of the part of the obligation performed to the whole obligation.

[107] Applying those factors here, they do not entitle Rossclair to refuse to pay the amounts owing to S & R even were I to find that Rossclair’s complaints had merit. With respect to the ratio of the unperformed obligations, as noted above, Rossclair admitted in the summer of 2016 that the contract was 80% complete. The balance of the floor has been completed since then. With respect to the seriousness of the breach, Flowcrete’s technical expert, Dompert testified that the complaints of Rossclair and the Brewery related to cosmetic issues and did not affect the floor’s functionality. I accept that evidence. Any alleged breach is unlikely to be repeated given that the floor has been finished. With respect to the seriousness of the consequences of the breach, as noted, the issue is cosmetic not functional. The floor that S & R installed remains in use and, as noted later in these reasons, has not affected the expansion of the brewery and has held up well over time. In these circumstances, the relationship of the part of the obligation that S & R performed in relation to the entire obligation is substantial.

[108] Counsel for Rossclair argued in closing that Steiner recognized there was a workmanship issue in an email of July 5, 2016.[^21] In my view, the email cannot fairly be read as an admission of responsibility. The email states:

We will be on site at Brunswick at 2:30. Can someone meet me on site before we meet at your office at 3:30. This is the first I have heard of workmanship not being to standards. Surface design my epoxy crew will be on site with me at 2:30 as well.

Please call me! I am doing everything I can to keep this project under control???

Please call me to discuss further or confirm someone can meet Rick and myself on site to review and rectify colour changes and issues?

Steiner is not accepting responsibility for anything in the email. Rather, he is acknowledging that Richardson has raised an issue of workmanship and is willing to meet to discuss it. The reference to keeping the “project under control” must be read in the context of a relationship with a demanding client, Rossclair, who has been communicating in a difficult fashion from the outset and who has not been keeping its end of the bargain by providing a clean worksite, air conditioning or adequate power.

[109] As a result, as noted earlier I find that Rossclair is prima facie obligated to pay S & R the sum of $303,911.98 plus prejudgment interest, subject to any credits for alleged deficiencies and subject to Rossclair’s counterclaim.

ii. Remediation for Deficiencies

[110] Item 2 of the Scott Schedule claims payment for remediation of deficiencies in the amount of $107,146.60. I find no amount is owing to Rossclair on account of this item.

[111] This claim relates to work that Rossclair retained BNE and Malvern to carry out on the floor. Rossclair asserts that this work was necessary to repair deficient work done by S & R and its subcontractors.

[112] Christopher Henderson, the principal of BNE testified that the areas he worked on were bare concrete with no previous covering. As a result, BNE could not be repairing any work done by S & R or its subcontractors. In addition, the work that BNE did was located in the upper left hand quadrant of the plant schematic which was not part of S & R’s original quotation. [^22]

[113] Bill Loveys is the principal of Supercap. He was called as a witness by S & R. He testified to doing work as a sub-contractor for Malvern on bare concrete floor at the brewery over which no one else had yet laid a urethane floor covering. In addition, he placed an epoxy coating over top of some of the areas that S & R had laid. In closing, Rossclair’s counsel noted that Rossclair was not claiming for any of the Malvern work done in areas that was not part of S & R’s original work. He asserted that Rossclair was claiming only for work done in areas that S & R had worked on and that needed to be redone. That was the application of an epoxy coating over top the floor that S & R installed.

[114] Rosslaire’s evidence at trial was that the epoxy coating was necessary to cover up staining and discolouration. That too was a cosmetic, not a functional issue.

[115] Rossclair did not call any witnesses from Malvern. I infer from this that Malvern had no evidence to provide that would assist Rossclair.

[116] Moreover, as discussed under items 3, 4 and 7 of the Scott Schedule, S & R bears no liability for those issues.

iii. Discolouration of the Floor

[117] Item 3 of the Scott Schedule refers to discolouration of the blue floor. The area in which discolouration occurs is marked in blue on Exhibit 9. I find no amount owing to Rossclair on account of this item.

[118] Both sides agree that there is discolouration on the floor.

[119] Rossclair’s expert, O’Farrell, attributed the discolouration to a defective mix ratio or defective mixing of the product.

[120] O’Farrell supported his theory with a photograph[^23] which shows two 250 gallon totes (containers which he says contained different parts of the Flowcrete product that had to be mixed together). O’Farrell says this photograph raised a huge red flag for him because decanting out of bulk containers could easily result in a mixing error. O’Farrell was not sure, however, what was in the totes. He assumed it was either Flowcrete urethane or Flowcrete sealer. At the same time, O’Farrell admitted that he did not know what sort of containers Flowcrete urethane or sealer were delivered in.

[121] Gobbatto explained that the photograph showed two containers of base product. He further explained that Flowcrete does not sell SR sealer in totes because it has a unique mixing ratio involving 2.2 parts of part A and 0.8 parts of part B. Flowcrete ships that in two separate jugs: Part A in a 2 gallon jug; part B in a small jug. The part A jug is short filled so all one need do is pour the part B solution into the part A jug and mix.

[122] Gobbatto acknowledged that it was possible to have poorly mixed base because, if left to sit too long, its component parts separate and require remixing.

[123] The difficulty with O’Farrell’s improper mixing theory is that it could be proven or disproven with the appropriate laboratory tests. Although O’Farrell took many samples of the flooring, he did not subject any of them to laboratory analysis. O’Farrell explained that, to perform appropriate laboratory tests required, samples of a properly mixed control product against which to compare the flooring samples. According to O’Farrell, Richardson advised that Flowcrete would not provide any control samples. O’Farrell did not know whether Flowcrete was actually asked for control samples. Rossclair’s counsel did not put the point to Richardson during examination in chief or to Flowcrete witnesses during cross-examination. As a result, I find that no such request was made.

[124] S & R’s expert, Heywood, conducted tests on samples from various areas of the floor and found the Flowcrete product in them had been properly mixed. In those circumstances, Rossclair has not proved the improper mixing theory on a balance of probabilities. S & R has, however, proven, on a balance of probabilities that there was no improper mixing.

[125] Both Heywood and Dompert testified that the issue of colour variation is not an installation issue. They were not shaken in that evidence.

[126] S & R witnesses attributed discolouration to a variety of causes. As noted earlier, the product is not necessarily colour fast.[^24] Colour variation occurs naturally. It appears that darker pigments such as the dark blue that Rossclair chose, show those natural variations more readily than do other colours. In addition, the higher sheen of the SR product makes natural colour variations all the more visible.

[127] As noted earlier, additional complications with the colour arose because of water dripping onto the floor before it was cured, excessive heat during the installation process, inadequate air circulation during the installation process and the premature covering of the floor before it was fully cured.

[128] Here too, the failure to follow the Specifications, the failure to deliver product data sheets to the Designer, and the failure to notify the Designer of substitutions all redound to Rossclair’s detriment. If an experienced contractor like Rossclair departs from the Specifications without confirming whether it is safe to do so, it does so at its own risk.

iv. Staining on Floor

[129] Item 4 of the Scott schedule relates to staining on the floor. I find no amount owing to Rossclair on account of this item.

[130] I find that the staining is caused by the improper use of cleaning materials and/or the discharge of materials during the brewing process that was not properly cleaned.

[131] O’Farrell admitted that there was staining on the floor, including acid staining, that was attributable to the manufacturing process. Fleming stated that the brewery usually uses acid diluted with water to clean tanks and piping. Improper dilution of acidic or caustic cleaners or spillage of those cleaners while they are being diluted would result in staining.

[132] Some of the discolouration is also the result of discharges from brewing tanks. By way of example, the photo at CaseLines A1218 shows a brownish-orange substance being drained into a bucket and overflowing onto the floor. It roughly resembles the orange/brown stains found in other photographs I was taken to at trial. If not cleaned properly, when the liquid in such discharges evaporates, it leaves behind a granular residue that stains the floor.

[133] Rossclair and the Brewery argue that staining could not be caused by discharge or cleaning materials because the grey portion of the floor is not stained. There are two explanations for this. First, the production area where most of the discharges or applications would occur was coated with a dark blue floor. The grey floor was used primarily for walkways. Second, the uncontradicted evidence of several witnesses was that discolouration and staining would not be as noticeable on a grey floor as on a dark blue floor. This may well be the reason the Designer specified grey flooring throughout the Brewery.

[134] According to Heywood, most food and beverage plants have grey or red brick coloured floors because they are more resistant to staining and discolouration. He notes as well that the floor in newer areas of the Brewery floor area is coated with a red brick colour and concludes that the Brewery appears to have learned from its mistakes about colour selection. Fleming denied that the newer flooring was the result of choosing a colour that was more resistant staining or discolouration. He attributed the newer red brick colour to his brewmaster whom he described as a “Bavarian traditionalist.” This somewhat misses the mark. It may well be a that the tradition of red brick coloured flooring in breweries is influenced by the fact that it is one of the colours that is less subject to staining or discolouration.

v. Ponding

[135] Item 5 of the Scott schedule relates to ponding of water in certain areas throughout the Brewery. I find no amount owing to Rossclair on account of this item.

[136] As noted earlier, ponding is addressed by proper sloping in the floor. Heywood reviewed the Specifications and could find no evidence of sloping requirements for the areas in which S & R worked. That evidence was unchallenged. Also unchallenged was the fact that sloping Specifications were the responsibility of the architect or Designer, not S & R.

[137] The only evidence about sloping Specifications involving S & R related to an email exchange that arose in September 2016 after Surface Design had already left the project.[^25] Those emails related to three smaller areas of 740 ft.², 600 ft.² and 240 ft.² It is unclear whether the ponding of which Rossclair complains relates to those specific areas or whether it relates to other areas that S & R worked on before it received any sloping instructions.

[138] Heywood also notes that the SR product is a syrup-like slurry which will self level and find low areas of the floor. While it is sometimes possible to effect a slope with a mortar product because it does not flow as readily as a slurry, it is not possible to do so with a slurry.

[139] According to Heywood standing water in food and beverage plants is not unusual because of the continuous discharge of liquids and washing of floors. Heywood observed that squeegees were omnipresent in the food and beverage plants he has inspected and that there were often full-time employees whose job was to move standing water towards floor drains.

[140] Fleming complained that the ponding issues were such that he would need a full-time person using squeegees to push water into drains. This does not, however, appear to be unusual, especially if there is no sloping in the subfloor.

vi. Delamination

[141] Item 6 of the Scott Schedule relates to delamination at gridlines C-M/3-4 and is identified as spots A and B on page 68 of the Heywood report. I find no amount owing to Rossclair on account of this item.

[142] This was an area of the floor that Hilderbrand had laid. Hildebrandt learned of the delamination in early March 2018. At that time, he offered to repair it at no charge. Rossclair refused even though Hilderbrand warned that if the issue were not repaired, the delamination would spread and would lead to a larger problem in the future. That appears to be what occurred. At trial, Richardson initially explained his refusal by saying that Hilderbrand should have gone through S & R. Richardson then changed his explanation and took the position that it was inappropriate for Hildebrand to attend because the parties were in litigation.

[143] In my view, no damages are appropriate for the repair of this area even if it is the fault of S & R because Rossclair failed to mitigate its damages in this regard. The smaller issue could have been repaired at no cost to Rossclair in 2018. Rossclair declined to accept that offer even though it was warned that the problem would only get larger with time.

[144] Loveys initially repaired this section of the floor when he was in the Brewery doing other work and happened to notice the delamination. His repair also subsequently failed. When describing the repair he did in an email to S & R dated July 9, 2018 Loveys stated:

When we reviewed this area it was apparent that the deteriorated area was isolated along the high peak of the slope. It looked like a bit of surface patching had been done to shape the crown a bit. Everything else is as solid as a rock so we cut out the bad area and inlaid the 202 while matching the grades and slope. See pictures below. [^26] (Emphasis added)

[145] In other words, apart from this one small area of repair, Lovey’s described S & R’s work as “solid as a rock.”

[146] O’Farrell suggests that there are broader delamination problems with the urethane concrete floor because contractors applied inappropriate cementitious materials to the subfloor. O’Farrell supports the allegation with photographs in his report. The difficulty with that allegation is that the photographs on which O’Farrell relies are not photographs of S & R’s subcontractors but are photographs of an employee of Lovey’s, a completely different contractor when Rossclair retained to work on the floor well after S & R had concluded its work.

[147] O’Farrell also notes that there were cracks in a flooring material known as Mapei. There too, the difficulty is that, S & R did not use Mapei on the floor, although a later contractor that Rossclair retained after S & R had finished its work did use Mapei.

[148] During his testimony Richardson introduced what he said were samples taken from the floor. The samples and Richardson’s evidence about them were introduced in a voire dire. I admit the samples and Richardson’s evidence about them into the trial.

[149] All Richardson could say about the samples was that they could have been taken from walkways but that he did not know exactly where they were from but that “delamination was happening all over the place.” There was no further evidence to describe what was happening on the samples, what the cause of that condition was or how it should properly be repaired. Moreover, in his cross-examination by Mr. Arcuri on behalf of S & R, Richardson identified the samples as coming from the area in the upper left-hand corner of the various plans where BNE had applied the urethane coating, not S & R.[^27]

[150] In those circumstances, the samples are of no evidentiary value.

vii. Flaking

[151] Item 7 of the Scott Schedule relates to the flaking of coating off the floor in various areas. I find no amount owing to Rossclair on account of this item.

[152] O’Farrell noted extensive flaking of a grey top coat over the blue floor throughout the Brewery. In this regard. O’Farrell’s report says:

Many of the areas where the Flowcrete Flowfresh SR Sealer is flaking off appear to be repairs (photos 4.3, 4.4, 4.15, 4.16, 4.17, 4.45, 4.50). In all of these areas (blue floor) the Flowcrete Flowfresh SR Sealer has severely discoloured. The Flowcrete Flowfresh SR Sealer immediately underneath these repairs shows no sign of discolouration or deterioration. The failed Flowcrete Flowfresh SR Sealer in these areas (when removed) had a soft mushy consistency. It was easily rolled into a small ball. The Flowcrete Flowfresh Sealer immediately underneath these repairs has no sign of any type of mechanical surface preparation.[^28]

[153] O’Farrell simply assumed that the material that was flaking off was the Flowcrete SR product.

[154] O’Farrell agreed that it would have been possible to conduct laboratory tests on the flaking substance to determine its composition. Composition was important because, after the defendants had finished their work, Rossclair and/or the Brewery retained other contractors to apply an epoxy topcoat onto the Flowcrete floor. S & R had not worked with epoxy at the Brewery. They worked only with concrete urethane. O’Farrell conducted no tests to determine the nature of the flaking material.

[155] Heywood did conduct such tests. The tests revealed that the flaking substance was epoxy, not concrete urethane. As a result, it was not applied by S & R but by subsequent contractors of Rossclair or the Brewery.

[156] Loveys testified that he was retained by the Brewery in 2018 to place an epoxy coating over top of some of the areas that S & R had laid. Heywood testified that he would never use an epoxy coating in a brewery because of the heavy use to which the floor subject.

[157] Significantly, in the quotation reproduced in paragraph 153 above, O’Farrell describes the concrete urethane floor underneath the flaking topcoat as showing no sign of discolouration or deterioration. That is what the defendants had installed.

viii. Drains

[158] Item 8 of the Scott Schedule refers to remediation for high edges around drains. I find no amount owing to Rossclair on account of this item.

[159] There was some ambiguity at trial about the finishing required around the drains. The Specifications S & R was given contained no details about drain finishing. O’Farrell notes that the drains were not finished to the standard required by the Flowcrete application manual. I accept that, in the absence of specific instructions in the Specifications, the installer should have followed the Flowcrete application manual.

[160] I nevertheless find that no amount is owing to Rossclair on account of the drains.

[161] Drains should generally be level with the floor. It appears that some drains at the Brewery are level, others are not. Rossclair has not established how many drains are not level and what the cost of remediating that would be.

[162] In addition, issues about drains not being level are typically put onto a deficiency list that the contractor is required to remediate at the end of the project. If Rossclair had a complaint about drains, it should have prepared a deficiency list which set out that complaint. Rossclair agrees that it never delivered a deficiency list. Although Rossclair did mention drains in an email dated August 17, 2016,[^29] that is not equivalent to a deficiency list. As noted earlier, Rossclair had a habit of delivering the blustery, sometimes expletive laden emails on a regular basis. That is not an orderly, efficient way of keeping track of issues that require remediation. A deficiency list is a formal step carried out at the end of a project that notifies the contractor, in one place, of all of the issues that still need to be addressed. It provides the contractor as well as the customer with a single place which lists the required repairs and allows both to keep track of those repairs as they are done. Random emails sent throughout the life of the project are no substitute for a proper deficiency list.

[163] Moreover, the evidence at trial was to the effect that natural wear and tear around drains, like the nicks and chips that exist here, would be expected after several years of use. While that sort of wear and tear is present at the Brewery, it has not led to delamination of the flooring around the drains. This suggests that the flooring was applied properly.

ix. Cracks in Flooring

[164] Item 9 of the Scott Schedule refers to cracks in flooring. I find no amount owing to Rossclair on account of this item.

[165] The evidence at trial was that cracks in concrete floor toppings will occur naturally. These reflect cracks that develop because the concrete subfloor is moving more than the floor coating can tolerate. The cracks can be easily repaired by filling them with a malleable substance which will move with the floor. This is a part of the ordinary maintenance of concrete flooring and not a sign of a defective product. Cracks of this nature tend to develop because the concrete underfloor was not constructed with a sufficient number of stress cracks. Stress cracks are deliberately designed in the concrete subfloor to allow parts of the subfloor to expand and contract with temperature, weight and other forces. It is the responsibility of the party laying the concrete subfloor to design it with sufficient stress cracks.

[166] Heywood tested the areas around the cracks in the urethane flooring to determine whether there were hollow spaces between the urethane and the underlying concrete. The presence of such spaces would suggest an installation error that could lead to cracking. There were no such hollow areas. Their absence suggests that the surface cracking is caused by inadequate stress cracks in the subfloor. Inadequate stress cracks are also what likely lead to the delamination discussed under item 6 of the Scott Schedule.

x. and xi. Rossclair’s Counterclaim

[167] Items 10 and 11 of the Scott Schedule deal with Rossclair’s counterclaim. Item 10 claims $600,000 to remove and replace the existing flooring. Item 11 claims $3,077,000 to shut down the Brewery to effect the repair and replacement of the floor. I find no amount owing to Rossclair on account of these items.

[168] For the reasons set out above, I do not find any deficiency in the installation of the floor for which S & R or its sub-contractors are liable.

[169] Although Fleming described the appearance of the floor as a big issue because clients visit the plant to see the equipment and the floor; whatever its appearance, the floor does not appear to have hampered the Brewery’s growth in any way. When the Brewery opened in 2016/2017 it produced 20,000 hL of beer annually. It has since expanded to over 1,000,000 hL annually. It has acquired and built out an additional 30,000 ft.² of space and has installed a second canning line that increased production from 150 cans per minute to 1000 cans per minute.

[170] Although Fleming acknowledged the growth of the business and its success, he would not agree that the floor has not inhibited the Brewery’s expansion. In response to that proposition, he maintained that he had lost clients or potential clients. Fleming did not, however, point to any examples of lost clients or potential clients.

[171] Heywood notes that the blue urethane flooring has stood up remarkably well after six years of severe use. As noted earlier, even O’Farrell’s report noted that the blue floor under the flaking epoxy coating showed no sign of deterioration. Loveys described it as “solid as a rock.”

[172] The floor is now seven years old. O’Farrell’s report contains a table of life expectancies of different flooring systems.[^30] The life expectancy of a slurry system is 6 years under heavy duty use, 6 to 8 years under medium duty use, and 8 to 12 years under light use. For a mortar system the comparable life expectancies are 10 years, 10 to 15 years and greater than 15. The table notes that in many cases, flooring systems, including slurry systems, can be renewed by applying an additional coating rather than requiring a complete replacement.

[173] O’Farrell took the position that the Flowcrete SR system was a mortar system, not a slurry system. According to O’Farrell, the reference to a slurry on the table appended to his report referred to epoxy products. The table does not, however, say that. In my view, a fair reading of the table together with the descriptions of the Flowcrete SR system is that SR is a slurry with the shorter lifespans described above.

[174] In addition, O’Farrell did not believe the Brewery was a heavy use facility. In his view, a heavy use facility would be a large food plant that ran 24 hours a day with between 80 and 100 forklifts. The Brewery had one or two forklifts. O’Farrell described the Brewery as a light to medium duty facility. Even on that description, however, the floor would be reaching the end of its life as described on the table. The table describes the life of a slurry flooring system in a medium duty facility as having a life of 6 to 8 years. It is now over 7 ½ years since the floor was installed. Even in a light duty facility, the slurry flooring would last as little as eight years.

[175] It is difficult to see how one could award damages for the flooring system when it is at or near the end of its expected life, is described as showing no deterioration and does not appear to have limited the Brewery’s growth in any way.

[176] It is also difficult to see how Rossclair could claim for the cost of replacing the floor and shutting down the Brewery when that is not a cost to Rossclair but a cost to the Brewery. The Brewery is not a plaintiff in this action. There is also no evidence before me that the Brewery has claimed such damages from Rossclair.

[177] At trial, Rossclair claimed that the Brewery had failed to pay Rossclair approximately $94,000 because of the state of the floor. When Mr. Richardson was asked on cross-examination whether he had any documentation to demonstrate that claim he responded that he did not know or was not sure. That is inadequate evidence of a counterclaim.

[178] Finally, the evidence of the actual cost of a replacement or shut down was somewhat thin at trial. I acknowledge that some of that may be attributed to a ruling I made at the outset of trial that excluded the evidence of Michael Tibay from Protec Contractors. Rossclair proposed to call Tibay to give evidence on damages. There was some ambiguity about whether Tibay would be an expert or a lay witness. He had not delivered an expert report. Quite apart from that issue the evidence was excluded because of its late delivery.

[179] During discovery, Rossclair was asked what evidence it relied on to support its damages claim. Rossclair referred to an excel spreadsheet that it undertook to produce. Its answer to the undertaking was that it could not find the spreadsheet but would continue to look for it. In addition, Rossclair advised that it had no other evidence of damages other than the invoices from Malvern and BNE.

[180] One of the documents Tibay proposed to introduce was a quotation he prepared to repair the floor. Rossclair received that document on April 19, 2023. It produced the document to the opposing parties 2 days before trial.

[181] In September 2021 all counsel advised Vella J. that all steps for trial had been completed with the exception of an expert’s report that Rossclair would deliver within one month. The only report that Rossclair delivered was from O’Farrell. It did not address damages. Quite apart from the commitment to Vella J., Rule 31.09 requires parties to continuously update information provided on discovery. If they fail to do so, the party may not introduce that evidence without leave of the trial judge. I determined that it would not be appropriate to admit the evidence given the practical impossibility of the opposing parties being able to respond to such evidence 2 days before trial.

[182] I nevertheless permitted both Richardson and Fleming to testify about damages under a voire dire. I admit that evidence into the trial.

[183] Mr. Richardson testified that the cost of doing so would be approximately $600,000. Fleming estimated the cost to remedy at between 450,000 and $600,000. While that sort of evidence is insufficient to ground a counterclaim in circumstances where Rossclair was asked to produce evidence of cost of repair and had committed in 2021 to deliver expert reports within a month it is really beside the point. I dismiss the counterclaim not because of the insufficiency of proof of damages but because I find no liability on the part of S & R or its subcontractors.

Friction and Hardness

[184] Although not contained in the Scott Schedule, Rossclair complains that the floor is excessively slippery. O’Farrell notes in his report that workers were slipping and falling because of the lack of aggregate finish. In cross-examination O’Farrell admitted that he had not actually seen anyone slip and fall but that he had been told this by others. O’Farrell agreed that it was possible to conduct friction tests to determine whether the floor was unduly slippery. He conducted no such tests. I do not accept that the floor is unduly slippery. I would have expected that, had it been so, the Brewery would have taken steps in the intervening 7 years to address that issue in some form or other and would have provided invoices for that work. I was not provided with any such invoices nor was I otherwise told of any steps taken to reduce the alleged slipperiness of the floor.

[185] Also not contained in the Scott Schedule are complaints about the hardness of the floor. O’Farrell took readings for the hardness of the floor in various areas. Of the 30 hardness tests O’Farrell took, 19 displayed what O’Farrell described as inadequate levels of hardness. Rossclair did not identify hardness as an issue in and of itself that creted problems. Rather, O’Farrell used the lack of hardness as support for his faulty mixing theory. As noted earlier, I do not accept the theory of faulty mixing given the lack of testing in that regard.[^31]

III. The Claim Against Flowcrete

[186] Rossclair’s claim against Flowcrete must be based on the allegations contained in the statement of claim. Paragraphs 10 – 12 of the claim against Flowcrete allege that a representative of Flowcrete: recommended that Rossclair use Flowcrete in the Brewery; represented that its products were sold only to fully trained, qualified and licensed installers; represented that S & R was fully trained, licensed and qualified to install Flowcrete products; and recommended that S & R be hired to install the flooring. This was simply not borne out at trial.

[187] In cross-examination, Richardson did not recall anything Gobbotto said other than that he was selling the product and did a good job doing so. Richardson also admitted that Gobbotto said nothing about S & R or Surface Design. Rather, Richardson relied on the more general allegation that Gobbotto told him that an installer had to be qualified to purchase Flowcrete product. Richardson also admitted that he hired S & R based on the suggestion of his own employee, Michael Weeks, not based on any suggestion from Gobbotto.

[188] It appears that Rossclair and the Brewery were driven by colour rather than by performance. That continued to be the case even after they were unhappy with S & R’s work. When Rossclair hired BNE to apply floor covering, it asked BNE to use Agate Grey because it was closest in colour to the Flowcrete product. BNE, wrote back suggesting Tellegrey because Agate Grey turns green with UV light and there is a great deal of UV light in the Brewery. Richardson nevertheless insisted that BNE use the colour closest to the Flowcrete grey, that is to say, Agate Grey.[^32]

[189] Rossclair does not allege that Flowcrete advised it to use the SR product or to use the blue that Fleming chose.

[190] Richardson did not tell Gobbotto about any special considerations for the Brewery such as its desire to conduct public tours of the premises.

[191] Gobbotto testified that he spoke to Richardson about the HF product because that was the equivalent of the U-Crete HF BASF product that he was aware had been specified. It is highly unlikely that Gobbotto would have suggested the SR product when he knew that the Designer had already specified HF. Doing so would have required him to persuade the Designer not only to use Flowcrete product but also to use the SR product rather than the higher grade HF product that the architect had specified.

[192] There was no evidence led before me of any defect in the Flowcrete product.

[193] Dompert checked the batch number of the product used at the Brewery and determined that no other complaints had been made in respect of that batch. Flowcrete also retains small portions of each batch in the event of complaints. Dompert checked the batch samples for anomalies and found none.

[194] In those circumstances, no claim has been made out against the Flowcrete defendants and the claim against them is dismissed. It follows that Flowcrete’s third-party claims against S & R, Surface Design and Epoxy Flooring must also be dismissed.

IV. The Claim Against Epoxy Solutions

[195] Rossclair issued a claim against Epoxy Solutions Inc. bearing court file number CV-18- 00601982. Epoxy solutions submits that Rossclair has named the wrong corporate entity and has not corrected that name, as a result of which the action against it should be dismissed. It appears that the correct party to have joined was Epoxy Flooring & Painting Inc. whom S & R engaged to complete the work that Surface Design had left undone.

[196] Although Epoxy Solutions Inc. is technically correct that the action should be dismissed against it because it did not do any work on the project, I will nevertheless assume that the defendant in the Rossclair action is Epoxy Flooring & Painting Inc. and grant an order adding that defendant to Rossclair’s statement of defence. I do that as a matter of practicality because Rossclair also started a separate action against Flowcrete and Surface Design. Flowcrete joined Epoxy Flooring & Painting Inc. as a third party to that action. In its third party claim, Flowcrete repeats and relies on the allegations made by Rossclair concerning S & R’s breach of contract and the fact that S & R retained Epoxy Flooring as a subcontractor. As a practical matter, the issues about the work that Epoxy Flooring carried out are before the court in any event.

[197] The only evidence of problems with work that Epoxy Flooring did involves the two areas of delamination referred to in the Heywood report as spots A and B. As noted earlier, that delamination is probably due to a crack in the concrete subfloor which in turn is probably attributable to the inadequate placement of stress cracks. Even if I am wrong in that finding and the cause of delamination was defective installation by Epoxy Flooring, I nevertheless find no liability in that regard because, as noted earlier, Epoxy Flooring offered to repair the area at no charge and was turned down even though it warned that the problem would only grow larger with time. I therefore dismiss the claims against Epoxy Solutions and Epoxy Flooring.

V. The Claim Against Surface Design Solutions

[198] Rossclair’s claim against Surface Design Solutions is based on a claim for default judgment. Pursuant to rule 19.02 (1) a defendant who has been noted in default is deemed to admit the truth of all allegations of fact made in the statement of claim.

[199] The allegations against Surface Design in the statement of claim are as follows:

17. Prior to completing its scope of work, Surface Design negligently abandoned its work on the Project.

18. At the time Surface Design abandoned its work at the project, the flooring was incomplete, severely deficient, substandard and unfit for use in a commercial brewery. In addition, in the time since Surface Design installed Flowcrete’s product at the Project, the flooring has deteriorated rapidly, including through discolouration, cracking and delamination.

19. Rossclair states that Surface Design was negligent, careless, unskilled, and abandoned the performance of its work at the Project. The duty of care owed by Surface Design to Rossclair. was breached by Surface Design’s negligence.

20. Rossclair states that Flowcrete’s negligent misrepresentation and/or Surface Design’s negligent, careless, unskilled and incomplete work on the Project has required or will require Rossclair to incur approximately $2,800,000 in costs to replace or rectify the said deficiencies and complete the unfinished work. Rossclair may also be liable for damages suffered by the operators of the business at the Project to the extent that the rectification of the flooring results in an interruption to the business.

21. As there is now a business operating at the Project, the costs to rectify the flooring are substantial. Significant amounts of equipment have been installed on top of the flooring, and are being utilized daily in the production of beer. As a result, Rossclair anticipates that, as a result of the breaches of the duties owed by Surface Design and Flowcrete, Rossclair will incur significant costs to rectify the flooring at the Project.

22. Therefore, Rossclair states that Flowcrete, and surface design are joint and severally liable for the costs Rossclair will incur to rectify the flooring at the Project.

[200] In my view, those allegations do not entitle that Rossclair to default judgment on its claim.

[201] First, the allegations of negligent abandonment, deficiency, substandard flooring and unfitness for use in paragraphs 17, 18 and 19 of the claim are statements or conclusions of law or mixed fact and law; they are not allegations of fact.

[202] The allegations of rapid deterioration, discolouration, cracking and delamination in paragraph 18 of the statement of claim do qualify as allegations of fact.

[203] Paragraphs 25 and 26 of the statement of claim allege that Rossclair will incur damages of approximately $2,800,000 to rectify the alleged deficiencies. Even if the overall allegation of deficiency is deemed to be an admission of fact by Surface Design, Rossclair would still be required to prove that those deficiencies caused $2.8 million in damages to Rossclair. Those latter issues were canvassed extensively at trial. As set out above, I have found that the issues related to the floor were not caused by deficiencies in installation, and that the alleged deficiencies have not caused Rossclair any damages. As a result, I decline to award judgment against Surface Design and dismiss the action against it.

Disposition and Costs

[204] For the reasons set out above, I:

a. Grant judgment against Rossclair in favour of S & R in the amount of $303,911.98 plus prejudgment interest on account of unpaid invoices.

b. Dismiss S & R’s claim against Anne Richardson, Kathy Hogeveen and Sean Richardson.

c. Dismiss Rossclair’s claim against Epoxy Solutions.

d. Dismiss Rossclair’s claim against Flowcrete and Adjuvants Euclid Canada Inc.

e. Dismiss Flowcrete’s third-party claims against S & R, Surface Design and Epoxy Flooring.

f. Dismiss Rossclair’s claim against Surface Design.

[205] Any party seeking costs arising out of these reasons may deliver written submissions by January 19, 2024. Responding submissions should be delivered by February 2, 2024. Reply submissions, if any, should be delivered by February 9, 2024.

Koehnen J.

Released: December 18, 2023

COURT FILE NO.: CV-16-566616

CV-18-601982

CV-18-600128

DATE: 20231218

BETWEEN:

S & R FLOORING CONCEPTS INC.

Plaintiffs

– and –

ROSSCLAIR CONTRACTORS INC. c.o.b. as ROSSCLAIR CONTRACTORS and c.o.b. as ROSSCLAIR CONTRACTORS and ANN C. RICHARDSON and KATHY HOGEVEEN and JOHN E. RICHARDSON a.k.a. SEAN RICHARDSON

Defendants

AND BETWEEN:

ROSSCLAIR CONTRACTORS INC.

Plaintiffs

– and –

EPOXY SOLUTIONS INC.

Defendant

AND BETWEEN:

ROSSCLAIR CONTRACTORS INC.

Plaintiff

– and –

FLOWCRETE NORTH AMERICA, INC. AND ADJUVANTS EUCLID CANADA INC. / EUCLID ADMIXTURE CANADA INC. C.O.B. AS FLOWCRETE and SURFACE DESIGN SYSTEMS INC

Defendants

HEARD:

Released: December 18, 2023

[^1]: CaseLines A619 [^2]: For ease of reference I will refer to both products as Flowcrete HF and Flowcrete SR or simply as HF and SR. [^3]: CaseLines A 2366 [^4]: A 2368 The purchase order was dated February 5, 2016. This is an incorrect date and was a left over from an earlier template that Rossclair appears to have used. [^5]: CaseLines A 2390. [^6]: CaseLines page A616 [^7]: CaseLines A617. [^8]: CaseLines page A777 [^9]: CaseLines A 2860. The area being referenced is the yellow area on Exhibit 8 and is found in the lower left-hand quadrant of the plant schematics corresponding approximate lines 13-15 , B-C and 14-15, C-A. Similarly at CaseLines eight 2564, Cuthbert complaint area in the front is not ready, that reflects the upper blue outlined area on Exhibit 8 and roughly reflects areas, 5 on the plant diagram. -6, O-Q [^10]: CaseLines pages A 13, A 214 – 216, A 217 – 238 [^11]: CaseLines page A 2829 [^12]: On that theory the contract is found at CaseLines page numbers A 787 – 788 [^13]: On that theory, the contract be found at CaseLines that page A 2368 – 2371 [^14]: Such as air conditioning (clause 1), power supply (clause 2) and a clean work area (clause 6). [^15]: Rather than repeating the phrase "S & R or its subcontractors" every time I refer to an obligation of S & R, any reference done by S & R includes work done by its subcontractors. [^16]: One exception being CaseLines A 2699 [^17]: CaseLines A 2989 [^18]: CaseLines page A591 [^19]: Urbacon Building Groups Corp. v. Guelph (City), 2014 ONSC 3641, at para. 142, citing Goldsmith on Canadian Building Contracts, 4th ed., 1988 at pp. I-70 and I-71; Dirm 2010 Inc. v. Ontario (Minister of Infrastructure) 2017 ONSC 2174, at para. 308 [^20]: 968703 Ontario Ltd. v. Vernon, 2002 CanLII 35158 (ON CA) at para. 16. [^21]: CaseLines page A 2613 [^22]: Which Henderson identified at CaseLines A2177 [^23]: CaseLines page B- 1-380 [^24]: CaseLines page A616 [^25]: CaseLines pages A 2944 -A 2945. [^26]: CaseLines page A2181-2. [^27]: Which Lovey's identified as the marked area in the upper left-hand corner of CaseLines page A 2177 [^28]: CaseLines page B-1-393 [^29]: CaseLines page A 2861. [^30]: CaseLines page B- 1-553 [^31]: O’Farrell also attributed the lack of hardness to possibly faulty curing. To the extent that is the case, that has been described earlier and is attributable to issues of temperature, air circulation and premature covering. [^32]: See CaseLines Page A 2169