Wilhelm Concrete v. Shackelton, 2025 ONSC 3071

CITATION: Wilhelm Concrete v. Shackelton, 2025 ONSC 3071

COURT FILE NO.: CV-19-00003030

DATE: 20250523

ONTARIO

SUPERIOR COURT OF JUSTICE (STRATFORD)

BETWEEN:

634573 ONTARIO LIMITED O/A WILHELM CONCRETE Plaintiff/Defendant by Counterclaim

– and –

JAY SHACKELTON AND COLLEGE GRAIN INC. Defendants/Plaintiffs by Counterclaim

Dennis Crawford, for the Plaintiff/Defendant by Counterclaim

Jacob Damstra and Matthew McGuckin, for the Defendants/Plaintiffs by Counterclaim

HEARD: January 9, 10, 13, and 15, 2025

REASONS FOR JUDGMENT

Justice E. ten Cate

Introduction

1This trial arises from the construction of concrete silos at a grain handling facility near Aylmer, Ontario.

2The plaintiff in the main action, 634573 Ontario Limited o/a Wilhelm Concrete (“Wilhelm Concrete”), constructed the silos for the defendant, College Grain Inc. (“College Grain”). The individual defendant, Jay Shackelton, is the president of College Grain.

3Before the court are two claims: (1) Wilhelm Concrete’s claim for unpaid invoices; and (2) College Grain’s counterclaim for construction deficiencies and consequent damages.

4College Grain’s counterclaim exceeded $200,000 but was commenced pursuant to Rule 76.02(3) of the Rules of Civil Procedure.¹ Because it did not elect to continue under ordinary procedure, and Wilhelm Concrete did not object, the trial proceeded under the Simplified Rules.

5Evidence was heard over four days. Bryan Wilhelm, Wray Wilhelm, Jeff Klomp and Marc Johnson, P.Eng, testified for Wilhelm Concrete, and Jay Shackelton, Michael Hensen P.Eng., Bruce Mundy and Brian Bauer testified for College Grain. With agreement of counsel, written closing submissions were filed on February 21, 2025, and reply submissions on March 7, 2025.

Factual Background

6The basic facts are not in dispute.

7634573 Ontario Limited carries on business under the name “Wilhelm Concrete” in Stratford, Ontario. Founded in 1968 by Wray Wilhelm, it constructs concrete silos and heavy civil works such as wastewater and water treatment plants.

8Bryan Wilhelm is a director of Wilhelm Concrete and the son of Wray Wilhelm.

9The defendant, College Grain Inc., incorporated in 2015, carries on the business of farming and grain trading. Jay Shackelton is the president and operates College Grain.

10On March 20, 2014, the parties signed a contract for construction of two silos: a 30-foot by 112-foot silo (“Silo 1”) and a 46-foot by 112-foot silo (“Silo 2”).

11The contract price to construct Silo 1 was $158,300 plus Harmonized Sales Tax (“HST”) and $275,000 plus HST to construct Silo 2. Jay Shackelton and Bryan Wilhelm signed the quotation to form the contract, but the only corporation referenced was “634573 Ontario Ltd.”.

12Silos 1 and 2 were completed in late October of 2014. Both silos were used for storing grain once construction was completed.

13In the spring of 2015, Jay notified Wilhelm Concrete that Silo 2 was leaking.

14On March 29, 2017, the parties signed a second contract for the construction of an additional 46-foot silo, Silo 3. The contract price was $286,000 plus HST. The second contract was signed in the same manner as the first.

15Silo 3 was completed in 2017 and used for storing grain, post-construction.

16On March 1, 2018, the parties signed a third contract for the construction of Silo 4, for $314,820 plus HST. The third contract was signed in the same manner as the previous two.

17Construction on Silo 4 began in April of 2018 and was completed in mid-July of 2018. Silo 4 was also used for storing grain, post-construction.

18In the fall of 2018, Wilhelm Concrete hired a third party to repair leaks in the roof of Silo 4 by applying a sealant and paid their invoice directly.

19In or around mid-June 2019, Wilhelm Concrete applied a sealant to the exterior of Silo 2 and invoiced College Grain for the application of the sealant in the amount of $8,020.19 inclusive of HST.

20To date, invoices for construction owing to Wilhelm Concrete totaling $97,754.04, have not been paid, nor has the invoice for the sealant applied to the exterior of Silo 2.

Positions of the Parties

21Wilhelm Concrete takes the position this is a straightforward action to collect a debt and denies any construction defects causing water to infiltrate the silos. If there is any moisture in the silos, it is attributable to inadequate grain handling by College Grain. Alternatively, the damages claimed are excessive.

22College Grain takes the position that because of construction deficiencies, water is infiltrating the silos. As a result, it has suffered damages which should be set-off against any debt owing to Wilhelm Concrete.

Issues

23The issues in this litigation are as follows:

1. Were there construction deficiencies in Silos 2 and 4?
2. What is the quantum of any damages?
3. Is College Grain’s claim related to Silo 2 statute-barred?
4. What amount is owing to Wilhelm Concrete for unpaid invoices?
5. Is Jay Shackelton personally liable for any amount owing to Wilhelm Concrete?

Legal Analysis

Issue #1: Were there construction deficiencies in Silos 2 and 4?

24The short answer to this question is “yes”.

25Claims against contractors may be framed in tort or in contract, or in both.² In this case, College Grain’s counterclaims in contract and tort were made concurrently. There is no disagreement that should I find deficiencies in construction, liability will attach to Wilhelm Concrete.

26To succeed with a claim in negligence, the claimant must establish: (i) that the defendant owed a duty of care; (ii) that the defendant’s conduct breached the standard of care; (iii) that the claimant suffered damage; and (iv) that the damage complained of was caused, in fact and in law, by the defendant’s breach of the duty owed.³

27The parties agree that Wilhelm Concrete undertook to construct four silos for College Grain which were structurally sound and fit for their intended use -- storing grain. They also agree that the silos are structurally sound. Where they disagree is whether Silos 2 and 4 have issues with water infiltration, caused by faulty workmanship, which impact their ability to store grain.

28Silo 4 is straightforward. Wilhelm Concrete admits the roof of Silo 4 was poured too dry because of delay in the delivery of concrete. As a result, the roof cracked, causing leaks. In October of 2018, it paid a third party, Bauer & Bauer Contractors Ltd., to apply a sealant to the roof because of this error. College Grain alleges that despite this repair, the leaking has progressively worsened over time.

29Silo 2’s issues are more complex and allegedly pervasive throughout the structure’s walls.

30The parties agree regarding the process used to construct grain silos.

31Bryan Wilhelm explained that grain silos are constructed using a “form and lift” system, in four-foot concrete ring sections. Once the desired height is achieved, the concrete roof is poured, and the aeration system is installed.

32If concrete ring sections are poured the same day, the sections are “knitted” together using a concrete vibrator to remove voids and create an impervious bond. If it becomes necessary to pour concrete the next day, a plastic “waterstop” must be installed between two “cold joints” to prevent leaking. On cross-examination, Bryan Wilhelm and Marc Johnson, Wilhelm Concrete’s engineering expert, agreed that if this “knitting” is not performed properly, or if the waterstops are not installed, water could infiltrate the joints.

33The onus is on College Grain to prove, on a balance of probabilities, there were construction deficiencies.

34Two engineers testified – one for each party.

35Michael Hensen, P.Eng. of Rimkus, a consulting engineering firm, testified on behalf of College Grain and was qualified as a professional engineer specializing in building envelope engineering and weatherproofing.

36On May 6, 2020, Mr. Hensen inspected the interior of Silo 2 when it was approximately 75 per cent full of grain. On May 28, 2021, another engineer employed by his firm, Blake Schoeffer, inspected Silo 2 when it was 25-50 per cent full. Photographs and videos were taken of those inspections and were made exhibits.

37Mr. Hensen testified that on May 6, 2020, he observed moisture dripping down the walls on the north and northeast sides of the structure from the horizontal rings in several locations, corresponding with the cold joints. He also observed areas of wet/dry clumping grain, indicating moisture. He described this phenomenon as “nagging water infiltration” and explained that the Silo 2’s cold joints are “likely not impervious”, allowing water to enter the structure when under pressure, such as a wind-driven rain event.

38On cross-examination, Mr. Hensen agreed that the most recent rain event in proximity to his attendance on May 6, 2020, was on April 29, 2020, approximately one week before. He explained that it can take time for water to fully migrate to the interior without pressure. He further testified that leaks in a vertical concrete structure will often only occur when combined with directional rainfall under pressure from wind which forces the water to migrate through the concrete structure; the combination of directional rainfall and sustained wind pressure are required. In his supplementary report from June of 2023, filed as an exhibit, he stated, “leaks in a vertical concrete structure will often only occur when in combination with directional rainfall and concentrating wind loading resulting in moisture infiltration from water entering through minor horizontal openings”.

39On May 28, 2021, Mr. Schoeffer also observed water infiltration inside Silo 2.

40Mr. Hensen agreed that on May 28, 2021, although rain fell according to the data from St. Thomas and Tillsonburg weather stations, he had no data regarding windspeed. Although he could not opine on the windspeed issue, he confirmed notes indicating: “winds coming in from the north”, which correspond to photographs of the north side of Silo 2 showing water saturating the exterior. Based on his observations and those of his colleague, evidence of repeated water infiltration was observed at multiple cold joint locations, evidenced by staining and clumped grain stuck to the wall or suspended at the points of infiltration, and there was active water infiltration at several cold joint locations and heights.

41I found the evidence of Mr. Hensen, including the photographs and the video, compelling. In particular, the photographs show obvious water infiltration at several levels of cold joints and water dripping down the walls onto the grain. Clumping and suspended grain is shown at several of those locations.

42Marc Johnson, P.Eng., of Witzel Dyce Engineering, testified as an expert for Wilhelm Concrete. The parties agreed he is a professional engineer qualified to testify as an expert in structural engineering with expertise in design of concrete structures. Mr. Johnson acknowledged he is not an expert on building envelopes and conceded that building performance and weatherproofing issues are outside the scope of his expertise.

43On September 14, 2021, Mr. Johnson attended the College Grain site. The weather was sunny and clear but there had been “heavy rain” the night before. He did not comment on wind speed or direction.

44Using a lift, he reviewed seven locations on the exterior of Silos 2 and 4. He conducted “hammer soundness” testing for voids or delamination on both silos and visual inspections. He noticed some small cracks and moderate “honeycombing”⁴, but no cracks deep enough to penetrate the seven-inch-thick walls.

45On cross-examination, he agreed he “assumed” waterstops were installed because they were specified in the engineering drawings. He did not perform destructive testing because it would involve drilling holes in the concrete walls and then repairing them.

46Mr. Johnson then went inside Silo 2 but found no evidence of daylight indicating a leak. He explained that if a crack is deep enough, it will penetrate to the rebar. When water enters it causes rusting on the interior wall of the silo. He found no such staining and no disturbances in the dusty surface indicating water infiltration. Based on these observations, he concluded that no water had entered through the cold joints.

47In Silo 4, he found no signs of water infiltration through the walls of the silo, but found groups of sprouting seeds inside, in several locations. In his opinion, the leak in Silo 4 was caused by water running down the roof, but he could not determine if the roof air vent was leaking.

48In Mr. Johnson’s opinion, there were no structural deficiencies, no water infiltration in either silo, and no repairs were required.

49On cross-examination, Mr. Johnson admitted that his ability to inspect the silos was “significantly impeded” by the fact that the silos were 60 per cent (Silo 2) and 80 per cent (Silo 4) full. As a result, he was unable to closely examine most of the interior joints of Silo 2. He also acknowledged that because he did not inspect during a “wind-driven rain event”, he could not verify whether water infiltration was likely under those conditions.

50Central to the analysis is whether Mr. Johnson is qualified to opine on the potential source of the water infiltration in the concrete silos. In my view, based upon his knowledge, experience and expertise, he is. However, I find that pursuant to the test in White Burgess⁵, his evidence lacked reliability because: (a) by his own admission Silo 2 was nearly full, thereby significantly hampering his ability to view the cold joints on the walls, and (b) there is no evidence he attended after a wind-driven rain event.

51I preferred Mr. Hensen’s opinion over Mr. Johnson’s for several reasons.

52First, Mr. Hensen has over 35 years of experience with building envelope and water infiltration whereas Mr. Johnson is a structural engineer with no such specialized experience. Here, the issue was not whether the silos were structurally sound (such that they would safely stand), but rather whether water would infiltrate them under certain conditions.

53Second, the photographs and video provided by Mr. Hensen’s clearly show water infiltrating from the cold joint junctions, thereby supporting his testimony.

54Third, Mr. Hensen’s evidence was supported by Bruce Munday’s (College Grain’s employee) first-hand knowledge of his observations of Silo 2 that he is required to clean clumps of grain from the interior of Silo 2 for up to a week after it rains.

55It is significant that Bryan Wilhelm has no first-hand knowledge of the construction of the silos because he never visited the site during construction. He testified he thought Wilhelm Concrete likely used a “Sika-type” waterstop and he would have expected his workers to install them at the end of each day. However, he did not require employees to keep daily logs or notes regarding construction and could provide no documentation confirming that waterstops were installed at the cold joints, or that they were installed properly.

56No employees of Wilhelm Concrete were called upon to testify at trial. Unfortunately, the manager in charge of the project passed away. However, fifteen employees were involved in the construction of Silo 2, including Connor Wilhelm, Bryan Wilhelm’s son, and Wray Wilhelm’s grandson.

57Wray Wilhelm also testified. He has owned and operated Wilhelm Concrete since 1968 and has over 50 years of experience in building grain silos. Although he was on site for the layout of Silos 1 and 2, and when the foundations were poured for Silos 3 and 4, he was not present for the construction of the walls of the silos, specifically Silo 2, and therefore could not assist me regarding whether he saw the workers install waterstops at the end of the day to prevent or minimize leaking.

58I was provided with no explanation as to why none of the employees were called who may have had first-hand knowledge of the construction of Silo 2. In my view, this is a glaring omission. As explained in Lane v. Kock⁶, the effect of a party’s failure to call a material witness is that an unfavourable inference can be drawn by the trial judge. I therefore exercise my discretion to draw an adverse inference that the evidence of the employees would not have assisted Wilhelm Concrete.

59Wray Wilhelm testified that after Jay Shackelton complained about Silo 2 leaking, he attended three times to inspect leaking in what he believed was Silo 3. On one of these occasions, he brought Connor Wilhelm with him. He could not provide a date for any of these attendances and kept no notes of his inspections. He testified he observed clumping grain throughout Silo 3, right up to the roof, indicating moisture in the silo. However, Mr. Shackelton and Mr. Munday testified that Silo 3 had no water issues. There is no evidence that Wray or Connor Wilhelm inspected the interior of Silo 2.

60Again, Connor Wilhelm was not called upon to testify; there is therefore no evidence about what he observed. Without his testimony, it is impossible to reconcile Wray Wilhelm’s testimony with the evidence of Mr. Shackelton and Mr. Munday that there were no moisture issues in Silo 3. In my view, the lack of corroboration by Connor Wilhelm, coupled with the lack of documentary evidence about the inspections, leads me to the conclusion that Wray Wilhelm’s evidence is unreliable with respect to any construction deficiencies in Silo 2.

61By contrast, I found Mr. Munday’s evidence reliable and compelling because it came from his repeated first-hand observations. Mr. Munday was hired by College Grain in 2018. He testified he was inside Silo 2 upwards of 50 times after it rained. During these events, he personally observed water seeping through the joints of the structure, depending on the direction of the wind. After it rains, he removes stuck grain from the walls of Silo 2 for up to a week.

62Mr. Munday also testified on multiple occasions he has been inside Silo 4 and has observed water dripping down from the roof, flowing down his back. His evidence is consistent with photographs taken in October of 2019 showing discolouration on the floor corresponding to the leaks in the roof.

63Wilhelm Concrete posited an alternate explanation for the moisture found in Silo 2 – that College Grain, and specifically its operator, Jay Shackelton, failed to properly dry and aerate the grain properly which caused the grain in the silos to become mouldy.

64Wray Wilhelm testified that in his opinion, Mr. Shackelton failed to run the fans in the silo enough to properly aerate the grain, causing condensation, but in cross-examination admitted he had never seen College Grain’s aeration equipment or drying practices or spoken to Mr. Shackelton about them. During his examination-in-chief, he testified he spoke to Mr. Munday about College Grain’s aeration practices, which Mr. Munday denied.

65Wilhelm Concrete hired a former customer, Jay Klomp, to provide a report regarding College Grain’s grain handling and storage techniques. Mr. Klomp is the owner and operator of Jay-Lyn Grains, which is in the business of receiving and storing commercial grains. Although he has no formal certifications or training, he has been operating a grain handling business since 2012.

66Mr. Klomp has two concrete silos and bins. His second silo was built in 2016 by Wilhelm Concrete. Over the objections of counsel for College Grain, Mr. Klomp was qualified as an expert on grain handling conditioning and storage, based upon his work experience.

67Mr. Klomp testified that in the fall of 2016 he experienced “chunks” of grain sticking to the inside of his newly constructed silo. At first, he believed moisture was infiltrating the silo, so he called Wilhelm Concrete to inspect.

68After speaking to Wilhelm Concrete and other grain elevator operators, he determined that the moisture content of his grain was too high. He installed a grain handling dryer to ensure the moisture content of the corn was below 15.5%, the industry standard. The dryer cooled the corn to the proper ambient temperature before it entered the silo to prevent spoilage and overheating.

69To ensure proper storage conditions, Mr. Klomp uses a combination of suspended temperature cables and an “OPI Blue” computer system. He also climbs the silo monthly to check for a foul, sour, or moldy smell. Additionally, he uses “coring” (making a funnel in the corn) to resolve any “hot spots”. If a problem is detected, fans in the silo are turned on to aerate the grain.

70Mr. Klomp was shown a series of photographs taken from the inside of Silo 2 by Mr. Hensen. He testified the dark marks of grain shown on the walls indicate that hot corn contacted the wall of the cold silo. As the corn is drawn down, some of it sticks and falls into the remainder of the corn. In his opinion, College Grain’s inadequate aerating and drying procedures caused spoilation of the grain.

71On cross-examination, Mr. Klomp admitted that his opinion is based exclusively upon the six photographs provided to him. He never visited the College Grain facility, has never been inside or outside the silos, and has never spoken to anyone at College Grain regarding its grain handling or aeration procedures. He agreed he never considered any other factors, including active water infiltration.

72While Mr. Klomp’s evidence provided useful background regarding grain handling practices, the fact that he never inspected the inside of Silo 2 or compared it to Silo 3 (which did not experience moisture issues), has never been to the site, and did not apprise himself of College Grain’s handling and storage techniques detracted significantly from the value of his evidence. I therefore place little weight on it.

73Additionally, I had difficulty with the photographs comparing Mr. Klomp’s silo to College Grain’s because they show grain stuck between cold joints. In contrast, the photographs provided by Mr. Hensen show grain stuck at the cold joints themselves.

74Other than some blurry images of Mr. Shackelton’s computer screens, which were impossible to decipher, no evidence was put forward by Wilhelm Concrete to prove that the temperature or the moisture content of College Grain’s products was above the industry standard.

75In Mr. Shackelton’s cross-examination he testified that there were nominal temperature differences between corn stored in Silo 2 and a 74-foot steel bin (14.89 per cent moisture compared to 14.73 per cent moisture). Both figures were lower than the industry standard of 15.5 per cent as defined by their own expert, Mr. Klomp.

76Significantly, no evidence was offered by Wilhelm Concrete to explain the different issues experienced in Silos 2, 3 and 4. In Silo 2 there are issues along the walls of the silo depending on wind direction. In Silo 4, the issues are restricted to the roof and the top of the grain pile. In Silo 3, there were no issues at all. Mr. Shackelton operated all three silos, but there is no evidence he operated the silos differently.

77The onus is on Wilhelm Concrete to prove its aeration theory on a balance of probabilities. Given the lack of evidence, I find that Wilhelm Concrete has failed to prove that the moisture issue was caused by poor grain handling and storage and that the preponderance of the evidence supports a finding that Silo 2 is leaking from its walls through the cold joints, because water stops were either not installed or not properly installed.

78I therefore find that College Grain has proven, on a balance of probabilities, there were structural deficiencies in Silos 2 and 4 causing water infiltration. I also conclude that Wilhelm Concrete’s defective workmanship breached the standard of care owed to College Grain, as well as the implied contractual terms for Silos 2 and 4 relating to workmanship quality and fitness for use.

Issue #2 – What is the quantum of any damages?

79While the basis for awarding damages against a contractor in negligence and contract differ, they often lead to the same result. The goal is to compensate a property owner for the costs that have been incurred, or are reasonably anticipated to be incurred, “but-for” the defective workmanship.⁷

80Damages in construction cases are not limited to repair and/or depreciation costs, but can also include consequential damages, such as loss of profit, if they: (i) flow naturally from the defective workmanship; and (ii) could have been reasonably anticipated at the time of contracting.⁸

81In D & M Steel Ltd. v. 51 Construction Ltd., Perell J. concluded that a property owner is required to put forward “proper evidence” upon which damages can be assessed.⁹ This is consistent with the Court of Appeal’s earlier approach in TMS Lighting Ltd. v. KJS Transport Inc. where the issue was whether a “reasonable preponderance of credible evidence” supported an estimated quantum of damages on the balance of probabilities rather than a specific type of evidence being provided in this regard.¹⁰

82I have concluded that Wilhelm Concrete’s defective workmanship breached the standard of care owed to College Grain, as well as the implied contractual terms for Silos 2 and 4 relating to workmanship quality and fitness for use. I may therefore award damages in tort, contract, or both.

83College Grain submits that it has or will need to incur, damages for: repair to Silos 2 and 4, spoiled grain/reduced sale prices, beetle infestation, and increased labour costs associated with cleaning the silos.

(a) Cost to Repair Silo 2

84To remedy the ongoing water infiltration issues in Silo 2, Mr. Hensen prepared a budget estimate dated April 27, 2022, which was updated on January 29, 2024, for the original trial date. He testified that his duties include the preparation of remediation plans and budgets to resolve waterproofing issues in building envelopes. Based upon his job experience of over 35 years doing this type of work, I accepted him as an expert in costing such remediation.

85Mr. Hensen proposed two options:

Option 1 – “Route and seal” construction joints and apply a waterproof coating; and

Option 2 – “Crack injection”, route and seal construction joints, and apply a waterproof coating.

86Both recommendations involve “routing and sealing” the concrete joints which means grinding down each joint on the silo and fixing the void with an elastomeric waterproof sealant.

87The difference between the two options is that Option 2 is a two-step procedure, involving “crack injection moulding” first, to caulk the concrete lift joints with a polyurethane or epoxy resin after the routing and sealing has been done, but before the waterproof coating is applied.

88On cross-examination, Mr. Hensen agreed Option 2 is a “belt and suspenders” approach but maintained that it would be the surest method to fix the water infiltration.

89According to the second estimate dated January 29, 2024, it would cost $283,488.75 for Option 1, and $329,395 for Option 2. These figures are substantially higher than Mr. Hensen’s first estimates of $209,898 and $253,685 in April of 2022, approximately 20 months earlier.

90I have two concerns about Mr. Hensen’s estimates.

91My first concern is that although Option 2 may be the “surest” method to prevent water infiltration, even Mr. Hensen agrees it is a “belt and suspenders” solution. I took his meaning in the conventional sense – that while Option 2 will ensure success, it is redundant. I therefore conclude that Option 1 is the most appropriate solution at a cost of $283,488.75.

92My second concern is that Mr. Hensen testified, and his report is clear, that he observed moisture in Silo 2 “at several of the horizontal rings coinciding with the cold joints”. According to his report, appended to his affidavit and marked as an exhibit, during his May 6, 2020, visit “evidence of repeated water infiltration was observed at multiple cold joint locations with wet and moisture-stained concrete at/along the exposed cold joints as well as wet grain clumped and stuck/suspended to the wall at the point of infiltration.”

93Mr. Hensen’s testimony is consistent with the photographs taken on May 28, 2021, by his colleague, Mr. Schoeffer. In particular, the caption for Image 5 reads “Active water infiltration observed at two levels of cold joints and the exhaust vent along the north elevation wall” and he caption for Image 6 reads, “Active water infiltration observed at cold joint with water observed dripping down walls into the grain.”

94Mr. Hensen proposed to remediate “every single joint and crack we discover” which includes 27 joints over 3900 feet of concrete. In other words, he proposes to seal every single joint of Silo 2, even though the cold joints only occur every four rings. I therefore conclude that his estimates are overstated by 400 per cent. Taking this deduction into account, I therefore award College Grain the sum of $70,872.19 (inclusive of HST), representing 25 per cent of the Option 1 estimate in 2025 dollars to repair the walls of Silo 2.

(b) Increased Labour Costs

95College Grain seeks $56,700 for cleaning and additional labour costs associated with the clumping grain inside Silo 2 over the past nine years.

96Mr. Shackelton outlined in his trial affidavit that College Grain has been forced to clean the interior at regular intervals to prevent spoiled grain from mixing with Grade 2 product.

97Mr. Shackelton and Mr. Munday described the cleaning as “hand-based” work, involving the use of a putty knife or with a rake, pole and ladder system and a bucket. The frequency of the cleanings can occur a few times per week to multiple times a day, depending on the volume of product being removed. Both have spent full eight-to-ten-hour workdays cleaning the walls of Silo 2 if there is considerable spoilage. On average, five hours per week is spent performing this chore during the grain handling season.

98The figure of $56,700 was arrived at by using an average of a 42-week work year and multiplying the future by $30.00 per hour. Although no payroll records were provided, Mr. Munday agreed the amounts are accurate.

99In my view, the additional labour costs associated with cleaning Silo 2 are reasonable and supported by the evidence. I therefore award College Grain the sum of $56,700 in this regard.

(c) Fumigation Cost

100College Grain alleges it incurred a one-time fumigation expense of $3,750 with respect to Silo 2 because in October of 2015, it was notified by Ingredion Canada that a load of corn shipped from Silo 2 was rejected due to live beetles. Mr. Shackelton’s evidence in his trial affidavit was that in his opinion the beetles were attracted to the spoiled grain.

101There is no evidence that Mr. Shackelton is an expert in beetle infestation of grain. In my view, there is insufficient evidence to tie the existence of the beetles to any workmanship deficiencies to this one-time occurrence, and I decline to award anything under this category.

(d) Damages Arising from Crop Spoilation/Rejected Loads

102Mr. Shackelton’s evidence is that despite College Grain’s best efforts over the last nine years, some grain stored in Silo 2 spoils frequently. The amount of mouldy grain varies depending on weather conditions and the time interval between cleanings. He acknowledges that while he and Mr. Munday “try to stay on top of things as best we can to reduce spoilage” this is not always possible. He admits that it is “not possible to accurately calculate the amount of mouldy product College Grain has had to scrape and remove from Silo 2”.

103With respect to Silo 4, Mr. Shackelton’s evidence was that the leakage problem is typically localized to grain stored at the top of the pile. This grain is removed by hand after it rains to remove any spoiled grain. He estimates that the loss from Silo 4 is approximately $2,850 based on 300 bushels and multiplying by the average price per bushel of wheat of $9.50 per bushel.

104College Grain also seeks a total of $202,500 for damages for spoiled grain and grain discounts applied to corn stored in Silo 2. Mr. Shackelton arrived at this amount using a price per bushel of $4.50 and multiplying by 45,000 bushels, representing just under one-third of Silo 2’s total capacity of 150,000 bushels. His evidence is that this estimate is “very conservative” based upon rejections or discounts occurring 5-10 times per year on average and a reduction of $0.10 to $0.20 per bushel.

105While “mathematical exactitude in the calculation of damages is neither necessary or realistic in many cases”¹¹, I find it very troublesome that there is no documentary evidence whatsoever for rejected or discounted loads from the purchasers of the corn such as commercial flour mills and pet food manufacturers such Parrish and Heimbecker and Royal Canin.

106Mr. Shackelton admitted on cross-examination that he “should have” presented such documentary evidence to support these claims but did not. At a minimum, College Grain could have provided internal record-keeping or notes evidencing rejected and discounted loads, or wasted loads spread on the fields, from November of 2019 when it issued a its counterclaim against Wilhelm Concrete.

107The onus is on College Grain to prove, on a balance of probabilities, that it has incurred such losses. In my view, there is insufficient evidence to ground a finding of the quantity of spoiled, discarded, or discounted grain from either silo. I therefore decline to award any damages in that regard.

(e) Damages for Future Repair and Maintenance of Silo 4

108College Grain seeks $80,000 for future repair and maintenance costs for Silo 4 because it says the leakage issues with its roof have progressively worsened since October of 2018, indicating that the thermoplastic sealant is at, or has exceeded, its functional lifespan.

109Mr. Bauer, whose company repaired the roof of Silo 4, was a reluctant and credible witness. Although he was not qualified as an expert on the lifespan of the sealant his company applied, his uncontradicted evidence was that the functional lifespan of the sealant was three to five years, depending on weather conditions and estimated the cost per application in 2025 dollars to be $5,000. College Grain used this evidence to calculate 16 applications over a 50-year lifespan of the silo, with three years between applications.

110Rule 53.09(1) of the Rules of Civil Procedure¹² governs the method by which future pecuniary losses are determined based upon a present value approach. In my view, there is no reason to deviate from this standard approach.

111Pursuant to Rule 53.09(1), the discount rate for the 15-year period following the start of trial was 1.0 per cent in 2024 for the period starting on March 1 and ending on August 31 in the year before the trial begins, which increases to 2.5 per cent after 15 years. Similarly, the “gross-up” rate outlined in Rule 53.09(2), was 2.2 per cent in 2024 for the 15-year period following the start of trial and 0.7 per cent in 2024 for the period beyond 15 years.

112I therefore determine that the damages for future repair costs to Silo 4 are $50,325.15, using the present value methodology outlined in Rule 53.09 of the CJA.

Issue #3 -- Is College Grain’s claim related to Silo 2 statute-barred?

113I find that College Grain’s claims related to Silo 2 are not statute-barred.

114Section 4 of the Limitations Act, 2002 states, “unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered”. ¹³

115Section 5 sets out the factors used to determine when a claim is “discovered”:

5(1) A claim is discovered on the earlier of,

(a) the day on which the person first knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

5(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1)(a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.

116The discoverability analysis requires findings of fact to be made about the factors set out in sections 5(1) and 5(2).

117In Morrison v. Barzo, the Court of Appeal outlined the two-step approach to be followed when conducting a discoverability analysis:

a. the plaintiff must overcome the presumption in section 5(2) that he or she knew of the matters referred to in section 5(1) of the Limitations Act, 2002 by leading evidence as to the date the claim was actually discovered; and

b. the plaintiff must offer a “reasonable explanation on proper evidence” as to why the claim could not have been discovered through the exercise of reasonable diligence.¹⁴

118To overcome the presumption, the plaintiff need only to prove that the actual discovery of the claim was not the date the events giving rise to the claim took place. There is no onus on the plaintiff to show due diligence to rebut the presumption.¹⁵

119All the elements under section 5(1)(a) of the Limitations Act, 2002 must be satisfied before a claim is discovered and the two-year limitation period begins to run.¹⁶

120The “appropriate means” test in section 5(1)(a)(iv) requires assessing whether, having regard to the nature of the injury, loss or damage, the claimant knew or should have known that a legal proceeding would be an appropriate means to seek to remedy their injury, loss or damage. Whether an action is appropriate depends on the factual or statutory setting of each individual case.¹⁷

121In my view, this case is on all-fours with the Court of Appeal’s decision in Presley v. Van Dusen in which Sharpe J.A. analyzed the “appropriate means” test in a construction case and found that the appellants specifically contracted with the septic contractor “because of his special training and expertise” which they relied upon. Additionally, he found that the septic contractor had: (i) attempted to fix the problem; (ii) provided repeated assurances that the problem could be fixed and he would fix it; and (iii) the appellants reasonably relied on these assurances which supported their reasonable belief that the problem could, and would, be remediated without cost and without any need to have recourse to the courts.¹⁸

122Like the septic contractor in Presley, concrete silo construction is a highly specialized industry. Both Bryan Wilhelm and Mr. Shackelton testified that there were only a few concrete silo contractors in Ontario when he decided to expand College Grain’s operation in 2012.

123Mr. Shackelton also testified that he had no prior experience with building grain silos and relied heavily on Bryan Wilhelm and Wilhelm Concrete. Bryan Wilhelm agreed that Wilhelm Concrete had more experience and expertise than College Grain.

124In the spring of 2015, after Silo 2 was completed, Mr. Shackelton notified Wilhelm Concrete that it was leaking, specifically that moisture from rainwater was penetrating the walls and negatively affecting the grain. On April 8, 2015, Bryan Wilhelm sent Mr. Shackelton an e-mail indicating that Wilhelm Concrete would send someone to seal the roof of Silo 2.

125Bryan Wilhelm admitted on cross-examination that there was an ongoing dialogue between 2015 and 2018, including telephone calls, text messages and e-mail correspondence. Additionally, he visited the site several times to inspect the silos.

126On May 21, 2019, Mr. Shackelton sent a text message to Bryan Wilhelm, showing mouldy corn stuck to the interior of Silo 2. In the summer of 2019, in a final attempt to placate Mr. Shackelton, Wilhelm Concrete applied a Pavix coating to the exterior of Silo 2.

127Mr. Shackelton’s evidence was that he relied upon Wilhelm Concrete’s good faith efforts to repair Silo 2 which, if successful, would have avoided the necessity of litigation.

128Using the analysis in Presley, I find as follows:

(a) College Grain specifically contracted with Wilhelm Concrete because of its expertise and experience in concrete silo construction;

(b) There were ongoing discussions between Mr. Shackelton and Bryan Wilhelm about Silo 2’s deficiencies and remediation methods between 2015 and 2018;

(c) Wilhelm Concrete provided assurances, investigated and attempted to repair the water infiltration issues;

(d) Wilhelm Concrete carried out remedial work in June of 2019, when it applied the Pavix coating to the outside of Silo 2; and

(e) College Grain was entirely reliant upon Wilhelm Concrete’s expertise and attempts to remediate until the completion of the unsuccessful Pavix repair.

129In my view, it would have been neither appropriate nor desirable for College Grain to commence a proceeding against Wilhelm Concrete while it was still attempting to ameliorate the leak issue.

130Shortly after the sealant was applied, Mr. Shackelton sent a video to Bryan Wilhelm showing water infiltration into Silo 2. At trial, Bryan Wilhelm acknowledged that College Grain was not satisfied with the repair. On June 28, 2019, Mr. Shackelton complained again via e-mail.

131The next communication was on August 14, 2019, when Mr. Shackelton received a demand letter from Wilhelm Concrete’s lawyer for payment of the unpaid invoices. Mr. Shackelton’s evidence was that the work was not complete and that he would work with Wilhelm Concrete to address his ongoing concerns, after which he would pay the invoices.

132The statement of claim was issued on November 14, 2019.

133I find that the limitation period began to run on August 14, 2019, because by that date it was apparent to College Grain that Wilhelm Concrete was no longer prepared to work with them to repair the water infiltration issue in Silo 2 and therefore the extension to the limitation period had ended. Since the claim was issued within three months of August 14, 2019, it was issued in time.

134Wilhelm Concrete’s alternate position is that by December 14, 2017, when Bryan Wilhelm advised Mr. Shackelton that the moisture issues were caused by faulty aeration as opposed to faulty workmanship, the limitation period began to run. Even if I were to find that their position is correct, which I do not, the statement of claim was issued within two years of that date.

Issue #4 -- What amount is owing to Wilhelm Concrete for unpaid invoices?

135There is no dispute that the total of the unpaid invoices is $97,754.04, including HST but excluding pre-judgment interest.

136Wilhelm Concrete also alleges it is owed $8,020.19 inclusive of HST for the Pavix sealant which was applied by Bauer & Bauer in June of 2019. Unfortunately, the sealant did not solve the issue, and College Grain continued to experience water infiltration issues which must be remedied using Option 1 proposed by Mr. Hensen -- routing and sealing the cold joints and then applying waterproofing to the exterior of Silo 2. College Grain received no discernable benefit from the Pavix coating and therefore should not be forced to pay for it. I find this cost to be part of the construction cost to Wilhelm Concrete because of its faulty workmanship.

137Wilhem Concrete also seeks pre-judgment interest of 1.5 per cent per month, or 18 per cent per annum as indicated on its invoices which brings the total owed to $214,781.781.13 without the Pavix invoice, or $230,735.37 with it. Alternatively, if I find that the contract did not include 18 per cent interest, it submits that a default rate of five per cent per annum as prescribed by the Interest Act¹⁹ applies which lowers the total amounts sought to $130,261.57 to $140,485.66 depending on whether the Pavix invoice is included.

138Bryan Wilhelm testified that in November of 2018 he advised Mr. Shackelton that payment for was tied to the repair of Silo 2, no doubt believing that the problem would be solved by the application of the sealant. On June 28, 2019, he sent an email inquiring about payment and Mr. Shackelton responded that the repair had been unsuccessful. Communication ceased after a demand letter was sent on August 14, 2019.

139College Grain submits that Wilhelm Concrete is permanently estopped from demanding pre-judgment interest because Bryan Wilhelm expressly tied College Grain’s payment obligation to the successful repair of Silo 2. Since Silo 2 has never been successfully repaired, it is not yet obligated to pay.

140College Grain relies upon the Court of Appeal’s decision in Lalani Properties International Inc. v. Intact Insurance Company²⁰ to support its position. In that case, Dawe, J.A. distinguished between estoppel by representation (made about an existing fact) and promissory estoppel (made about future intentions). He held that the insurer’s implied promise not to enforce a vacancy exclusion clause was more akin to promissory estoppel and was not permanent because it contained a contractual termination clause and notice provisions.²¹

141Applying Lalani, in my view, the agreement to delay payment was a promissory estoppel because it ended when Wilhelm Concrete no longer intended to try to remediate Silo 2 and demanded payment. At that point, College Grain knew that there was a disagreement about the repair, but also knew it owed the money. Instead of paying the debt, it kept the money, which deprived Wilhelm Concrete of the use of that money.

142Where a contract fails to set a specific rate of interest, or interest is not expressed “per annum”, the Interest Act caps interest at five per cent per annum.²² The burden is on the party claiming interest at a particular rate to prove, on a balance of probabilities, that it was a term of the contract. Interest cannot be unilaterally imposed by a party after the fact when it failed to form part of the initial agreement.²³

143Ontario courts have repeatedly dealt with cases where a contractor claimed interest on invoices at rates higher than permitted by the Courts of Justice Act²⁴. For instance, in The Floor Show v. Man-Shield (NOW) Construction et al. no rate of interest was included on the invoices. Fitzpatrick J. held that an agreement to pay interest at a particular rate of interest was a prerequisite to holding the party liable to pay it. Because there was no such agreement, the plaintiff was awarded pre-judgment interest pursuant to the CJA. ²⁵

144Here, the contracts between College Grain and Wilhelm Concrete were silent on the applicable rate of interest. The contract for Silos 1 and 2 contained a section entitled “terms on silos” which outlined a payment schedule for each component (engineering, foundation, structure openings, aeration, etc.). The contracts for Silos 3 and 4 do not contain any such terms. None of the contracts included terms respecting interest; the first time the interest rate of 1.5 per cent was mentioned was on the invoices.

145No evidence was adduced at trial by Wilhelm Concrete that interest at 1.5 per cent was discussed with, or agreed to, by College Grain at the time of contracting. Likewise, no evidence was led by them regarding a discussion or agreement about the 1.5 per cent per month interest rate on the invoices, or at any rate for that matter.

146Although section 4 of the Interest Act imposes a five per cent cap on the interest, The Floor Show, and other similar Ontario construction cases²⁶ have held that the appropriate pre-judgment interest rate is that prescribed by the CJA.

147I therefore determine that the amount of $97,754.04, including HST is payable to Wilhelm Concrete plus pre-judgment interest of two per cent per annum since Wilhelm Concrete’s claim was commenced in the second quarter of 2019.

Issue #5 -- Is Jay Shackelton personally liable for any amount owing to Wilhelm Concrete?

148The answer to this question is “no”.

149Mr. Shackelton testified he is the President of College Grain Inc.

150According to the agreed statement of facts filed, Wilhelm Concrete was aware that the silos were being constructed for College Grain, and not Mr. Shackelton personally. For instance, paragraph 11 reads:

On August 13, 2012, Wilhelm Concrete provided a quotation to College Grain for the construction of two (2) concrete grain silos, which the defendants had inquired about for the purpose of conducting College Grain’s business.

151All invoices were addressed to College Grain.

152On April 24, 2017, Wilhelm Concrete issued an invoice for Silo 3 addressed to “Shackelton Farms”. Mr. Shackelton requested this be updated to indicate “College Grain Inc.” which purchased the assets of Shackelton Farms in February of 2015. Bryan Wilhelm complied with this request, and the subsequent invoices for Silo 3 were paid by “College Grain Inc.” On cross-examination, Bryan Wilhelm admitted he was aware College Grain, as opposed to Jay Shackelton personally, owned and used the silos.

153It is undisputed that Jay Shackelton and Bryan Wilhelm affixed their signatures to the quotations to form the three contracts to build silos. All the contracts were signed in the same manner such that the only corporation referred to on the contract was “634573 Ontario Ltd.” which operates as Wilhelm Concrete.

154No evidence was put forward by Wilhelm Concrete that at any time it believed Jay Shackelton was personally responsible for payment under the contracts.

155In my view, on a balance of probabilities, the evidence clearly supports a finding that the contracting party was “College Grain Inc.” and not Jay Shackelton personally, and I so find.

Order

156Based upon the foregoing reasons, I therefore order as follows:

1. College Grain shall pay the sum of $97,754.04, including HST to Wilhelm Concrete plus prejudgment interest of two per cent per annum; and
2. Wilhelm Concrete shall pay the sum of $177,897.34, including HST to College Grain plus prejudgment interest of two per cent per annum.

Costs

157The parties are encouraged to resolve the issue of costs. If they are unable to agree, submissions may be made through my judicial assistant (Nadine.Long@ontario.ca) as follows:

1. College Grain – within 30 days of this judgment;
2. Wilhelm Concrete – within 15 days of College Grain’s submissions; and
3. There shall be no right of reply without leave of the court.

158If I do not receive submissions within this timeframe, I will assume costs are resolved.

“Justice E. ten Cate”

Justice E. ten Cate

Released: May 23, 2025

CITATION: Wilhelm Concrete v. Shackelton, 2025 ONSC 3071

COURT FILE NO.: CV-19-00003030

DATE: 20250523

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

634573 ONTARIO LIMITED O/A WILHELM CONCRETE Plaintiff/Defendant by Counterclaim

– and –

JAY SHACKELTON AND COLLEGE GRAIN INC. Defendants/Plaintiffs by Counterclaim

REASONS FOR JUDGMENT

ten Cate J.

Footnotes

1. 1Rules of Civil Procedure, R.R.O. 1990 Reg. 194, made under the Courts of Justice Act, R.S.O. 1990, c. C.43.
2. 2Beer v. Townsgate I Ltd., 1997 CanLII 976 (ON CA).
3. 3Priestly Demolition Inc. v. Walsh Construction Company Canada, 2022 ONSC 5071, at para. 63.
4. 4Mr. Johnson explained that “honeycombing” is caused by trapped air during the concrete pour.
5. 5White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23, at para. 54.
6. 6Lane v. Kock, 2015 ONSC 1972, at para. 3.
7. 7Cornelis Grey Construction Inc. v. Folz, 2018 ONSC 647, at paras. 15 and 26.
8. 81814219 Ontario Inc. v. 2225955 Ontario Ltd., 2023 ONSC 4672, at paras. 409-412.
9. 9D & M Steel Ltd. v. 51 Construction Ltd., 2018 ONSC 2171, at para. 51.
10. 10TMS Lighting Ltd. v. JKS Transport Inc., 2014 ONCA 1, at paras. 61-62.
11. 11TMS Lighting Ltd. v. JKS Transport Inc., 2014 ONCA 1, at para. 61.
12. 12R.R.O. 1990, Reg. 194 made under the Courts of Justice Act, R.S.O. 1990, c. C.43.
13. 13Limitations Act, 2002, S.O. 2002, c. 24, Sched. B.
14. 14Morrison v. Barzo, 2018 ONCA 979, at para. 31.
15. 15Ibid, at para. 31.
16. 16Ibid, at para. 33.
17. 17Presidential MSH Corporation v. Marr, Foster & Co. LLP, 2017 ONCA 325, at para. 18.
18. 18Presley v. Van Dusen, 2019 ONCA 66, at paras 21-23.
19. 19Interest Act, R.S.C. 1985, c. I-15.
20. 20Lalani Properties International Inc. v. Intact Insurance Company, 2024 ONCA 583.
21. 21Ibid, at para. 99.
22. 22Interest Act, supra, at ss. 2-4.
23. 231089954 Ontario Ltd. v. 146812 Ontario Inc., 2008 CanLII 4777 (ON SC), at paras. 58-59.
24. 24Courts of Justice Act, supra.
25. 25The Floor Show v. Man-Shied (NWO) Construction et al., 2018 ONSC 6077, at paras. 30-32. See also D & J Manufacturing Co. Ltd. v. Thornwood Fine Homes Inc., 2017 ONSC 5994 and Mount Royal Painting Inc. v. Unifor Canada Inc., 2022 ONSC 6316.
26. 26See references in footnote 25.