Lumberjacks Tree Service v. 407 East Construction General Partnership, 2026 ONSC 1321

2026 ONSC 1321

OSHAWA COURT FILE NO.: CV-13-86368-00

DATE: 20260304

IN THE MATTER OF the Construction Act, RSO 1990, C-30

BETWEEN:

LUMBERJACKS TREE SERVICE

Plaintiff

– and –

407 EAST CONSTRUCTION GENERAL PARTNERSHIP, SNC LAVALINCONSTRUCTION (ONTARIO) INC., FERROVIAL-AGROMAN CANADA INC., JUSTIN DEMERCHANT, ROBERT HEMS also known as ROB HEMS, GABRIEL MEDEL, SNC-LAVALIN GROUP INC., SNC-LAVALIN INC., FERROVIAL, S.A., FERROVIAL CORPORACION, S.A., FERROVIAL-AGROMAN, S.A., CINTRA CONCESIONES DE INFRAESTRUCTURAS DE TRANSPORTE, S.A., 407 EAST DEVELOPMENT GROUP GENERAL PARTNERSHIP, SLI 407 EAST DEVELOPMENT GROUP INC., CINTRA 407 EAST DEVELOPMENT GROUP INC., OM&R 407 EAST DEVELOPMENT GROUP GENERAL PARTNERSHIP, PROTRANS 407 EAST DEVELOPMENT GROUP INC., CINTRA OM&R 407 EAST DEVELOPMENT GROUP INC., HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO, HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO AS REPRESENTED BY THE MINISTER OFINFRASTRUCTURE, HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO AS REPRESENTED BY THE MINISTER OF TRANSPORTATION, THE CORPORATION THE CITY OF PICKERING, THE CORPORATION OF THE CITY OF OSHAWA, THE CORPORATION OF THE TOWN OF WHITBY and THE REGIONAL MUNICIPALITY OF DURHAM

Defendants

Robert Harason, for the Plaintiff

Dan Boan and David Major for the Defendants, 407 East Construction General Partnership, SNC-Lavalin Construction (Ontario) Inc and Ferrovial-Argoman Canada Inc. (The defendants)

AND

OSHAWA COURT FILE NO.: CV-14-87460-00

Plaintiff

– and –

407 EAST CONSTRUCTION GENERAL PARTNERSHIP, SNC-LAVALIN CONSTRUCTION (ONTARIO) INC., FERROVIAL-AGROMAN CANADA INC., JUSTIN DEMERCHANT, ROBERT HEMS also known as ROB HEMS, GABRIEL MEDEL, 407 EAST DEVELOPMENT GROUP GENERAL PARTNERSHIP, SLI 407 EAST DEVELOPMENT GROUP INC., CINTRA 407 EAST DEVELOPMENT GROUP INC., HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO, HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO AS REPRESENTED BY THE MINISTER OF INFRASTRUCTURE, HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO S AS REPRESENTED BY THE MINISTER OF TRANSPORTATION

Defendants

Robert Harason, for the Plaintiff

Dan Boan and David Major for the Defendants, 407 East Construction General Partnership, SNC-Lavalin Construction (Ontario) Inc and Ferrovial-Argoman Canada Inc. (the defendants or 407E)

Heard: February 26-29, March 4-8, 19-21, 25-28, April 2-5, December 3-6, 2024, January 30, May 14 and 15 2025.

sutherland J.:

OVERVIEW

1The plaintiff, Lumberjacks Tree Service (“LTS”) is in the business of tree removal and grubbing. LTS is owned and operated by married couple, Amanda MacDonald and Justin MacDonald.

2The defendants (“407E”) were a joint venture consortium that contracted to the design, and construction of Highway 407 East. The other defendants named are no longer involved in the proceedings.

3LTS commenced the construction lien actions, CV-13-86368-00 on November 29, 2013 with an Amended Statement of Claim issued on November 10, 2022 (the 2013 action), and CV-14-87460-00 on February 27, 2014 (the 2014 action). The 2013 action was an unregistered claim for lien and the 2014 action was a registered claim for lien.

4Regarding the 2013 action, the claim for liens were vacated by the Order of Master Wiebe, as he then was, by Order dated November 28, 2013 by paying into Court a financial guarantee bond in the sum of $2,881,029.52. An Order of Master Muir dated December 23, 2013 vacated the second lien based on the Order of Master Wiebe that vacated the first lien by the depositing into Court the guarantee bond.

5By Court Order, the 2013 action and the 2014 action are to be heard together.

6On consent of LTS and 407E and per my endorsement dated June 15, 2022, I was appointed the case management judge and trial judge of both actions utilizing the one-judge case management system.

7LTS’s damages claim at trial¹ was as follows:

(a) Extra for clear cut clearing: $3,106,455.79;

(b) For grubbing: $124,879.50;

(d) Extra for manual cutting: $245,781.37;

(e) For loss of profit: $28,854.94, $7,973.28, $406,800;

(f) Loss of profits of $6,669.26 for Clearway work;

(g) Loss of profits of $29,832 for work with Coffey; and

(h) Punitive damages.

This results in a total of $4,228,610.13 less amounts paid by 407E in the amount of $366,215.68.² This leaves a net total of $3,862,394.45.

8As stated in the Amended Statement of Defence and Counterclaim of 407E dated December 5, 2022, 407E counterclaimed for damages incurred due to the failure of LTS to perform its work. As of the date of trial, the damages claimed are in the amount of $2,056,224.06, plus costs for the financial guarantee bond paid into Court.

WITNESSES

9The direct examination of the witnesses for LTS and 407E was presented by affidavits. The affidavits presented, along with their attached exhibits, were more than 8500 pages.

10The witnesses of LTS were:

(a) John Palmer;

(b) Amanda MacDonald;

(d) Brian Henderson (by affidavit only).

The witnesses of 407E were:

(a) Justin DeMerchant – Senior Contracts Administrator/Procurement and Contracts Administration Manager;

(b) Paul Bragdon – Section 3 Assistant Area Manager;

(d) Leighton Taylor – Section 3 Superintendent;

(e) J.P. Martin – Sturgeon Falls & Contracting Limited;

(f) Jolene Chu – Section 3 Engineer in Training;

(g) Azel Woldegiorgis – Section 3 Engineer in Training;

(h) Gabriel Medel – Construction Manager;

(i) Angel Beltran Soriano – Section 2 Assistant Area Manager; and

(j) Ken Dean – Section 3 Construction Manager.

THE PROJECT

11In 2007, the Ontario Ministry of Transportation (“MTO”) initiated the 407 East Individual Environmental Assessment and Preliminary Design Study. The plan involved the overall extension of the Highway 407 Express Toll Route by fifty (50) kilometres from Brock Road to Highway 35/115. There were also two (2) north-south links connecting Highway 401 to the planned Highway 407 extension:

(1) a link in the West Durham Line (now Highway 412) (“WDL”); and

(2) a link in the East Durham (“EDL”).

12The overall Project was broken into two (2) phases:

(a) Phase 1: included thirty-two (32) kilometres of highway from east of the Brock Road interchange in Pickering to east of Harmony Road in Oshawa and Highway 12; and

(b) Phase 2: divided into two (2) parts, comprising of Phase 2A from Harmony Road to Taunton Road/EDL, and Phase 2B, which included the section from Taunton Road to Highway 35/115 and the EDL.

13On June 8, 2010, Her Majesty the Queen in Right of Ontario as represented by the Minister of Infrastructure, as represented by Ontario Infrastructure and Lands Corporation (“HMQ”), issued a request for qualifications to design, build, finance, and maintain Phase 1 of the Highway 407 extension, which would result in certain modifications to Highway 407 including the following:

(a) An extension of Highway 407 by approximately twenty-two (22) kilometres from the Brock Road Interchange Eastern Limit in Pickering to the Harmony Road Interchange Eastern Limit in Whitby/Oshawa;

(b) Construction of Highway 412 as a ten- (10-) kilometre connection between Highways 401 and 407; and

(c) The opening of approximately 148 new lane kilometres in total, including 11 interchanges, 31 water-crossing structures, and 16 municipal road crossings.

14The 407 East Phase 1 Project was awarded to 407 East Development Group General Partnership (“407ED”). On May 15, 2012, HMQ entered into a Project Agreement with 407ED to design, build, finance, and maintain the 407 East Phase 1 Project (“the Project”). On May 15, 2012, Project Co entered into a Design-Build Contract for the design and construction of the Project (the “Construction Contract”) with 407 East Construction Group Partnership, a joint venture partnership between the two remaining defendants: SNC-Lavalin and Ferrovial.

15In order to manage the Project, it was broken down into Stations, Segments, and Sections with Stations being the smallest measurement of the land and Sections being the largest. There were eight (8) Segments in total, with the following witnesses working in the three Sections:

Section 1:

Segment A-1

Gary Coull

Section 2

Segments A-3, A-4 and A-5

Angel Beltran

Section 3

Segments A-2, B-1, B-2 and B-3

Ken Dean, Paul Bragdon, Leighton Taylor, Jolene Chu, Azel Woldegiorgis

The Sections were divided as follows:

Section	Segment	Sites
1	A-1	8, 9, 10, 10A, 11, 12, 14, 15, and 16
2	A-3	21, 24, and 25
	A-4	27, 28/29, 32, 33, and 34
	A-5	35, 36, and 38
3	A-2	17A, 17B, 17C, 19, 19A, 41A, and 41B
	B-1	51, 51A, 51C, 99, 99A, and 100A
	B-2	47 and 47A
	B-3	43, 43A, 43B, 44, and 45

Procurement

The Prequalification Stage

16In November 2022, it was decided that it would need to cut and clear the trees and other vegetation from the right of way (“ROW”) of the Project. 407E considered different tree cutting companies that may be interested in performing the work for the Project and generated a list of tree cutting companies who might have the requisite expertise to carry out the cutting, clearing, and grubbing work.

17By email dated December 12, 2012, 407E issued a Request for Prequalification to potential bidders. LTS received the Prequalification package to make a bid if LTS so desired. Attached to the email were numerous documents.

18On December 20, 2012, LTS delivered its response to the Prequalification indicating an interest by completing all the questionnaires and other documentary information required, as set out in the Prequalification package.

19After review of the information and documents provided by LTS, 407E was not convinced that LTS had the necessary experience, expertise, and financial resources to perform the work required and decided not to invite LTS to move on to the next stage – Request for Quotation (“RFQ”).

20LTS was advised that they were not invited to the next stage, and a quotation would not be requested from them. This decision was made by Mr. DeMerchant, Mr. Hems and Mr. Medel.

21In response, LTS asked 407E to reconsider its decision and LTS requested a meeting with 407E management to persuade 407E to permit LTS to move to the next stage. Following this, Mr. DeMerchant had a call generated by Ms. MacDonald. After the call, Mr. DeMerchant agreed to let LTS move to the next stage and provide a Quotation.

The RFQ Stage

22On January 28, 2013, 407E issued a RFQ for “Clearing, Close Cut Clearing and Grubbing”³ and provided a Compact Disc (“CD”) to all qualified bidders, which were three bidders, including LTS. The CD contained, among other things:

(a) An invitation letter (the “RFQ Invitation Letter”);

(b) A bidder acknowledgement form (the “RFQ Bidder Acknowledgement”);

(d) The RFQ Scope and Conditions of Work and all documents listed therein (the “RFQ Scope”);

(e) A quotation form letter with appendices (the “RFQ Quotation Letter”);

(f) A subfolder containing the eight (8) aerial photographs of the eight (8) Project Segments (the “RFQ Photos”); and

(g) A subfolder containing the eight (8) profile drawings of the eight (8) Project Segments (the “Profile Drawing”), Ontario Provincial Standards and Specifications 201 (“OPS 201”), and the draft General Conditions to the Subcontract.

23The RFQ Invitation Letter described the purpose of the contents of the CD and that the RFQ Rules are the terms that govern. The letter set out the several options for performing the work and the pricing impact. The RFQ Invitation Letter indicated that if the bidders wished to visit the site, they should contact Justin DeMerchant “to arrange for a site visit and to verify all information.” Any questions or clarifications could be submitted through the RFQ Clarification Form that was enclosed.

24The RFQ Rules, specifically section 2, stated that the RFQ Rules, the Invitation Letter, and the RFQ Bidder Acknowledgement constitute the entire agreement between 407E and each bidder with respect to the RFQ. In addition, it was an express condition of the RFQ Rules that any ambiguity within the RFQ was not to be resolved against 407E in the interpretation of the RFQ Rules. Section 3 “strongly encouraged” bidders to ask questions and not make assumptions, as stated:

Each Bidder is strongly encouraged not to make any assumptions and to seek Clarifications of any questions that such Bidder might have, particularly related to any error or discrepancy in this RFQ identified by a Bidder. Bidders may not rely on any assumptions made or on any errors or discrepancies. Bidders are responsible for seeking a Clarification respecting any questions they may have respecting commercial, technical, site or other issues. Bidders must submit in writing to the 407ECGP [Single Point of Contact] at the address set out in the Invitation Letter all questions respecting commercial, technical, site or other issues arising in respect of this RFQ, including in respect of the pre-bid meeting.

25Section 6, entitled Bidder’s Due Diligence, reiterated that each bidder should perform their own due diligence before submitting their quotation, which included examining all the terms, information, and documents contained in the RFQ. It read:

Before submitting a Quotation, each Bidder must thoroughly examine all the terms and other information contained in this RFQ and, in particular, all the information contained in the Scope and Conditions of Work. Each Bidder is responsible for being fully informed prior to submitting a Quotation as to:

(a) all existing conditions and limitations under the services will be provided;

(b) all required permits, approvals, licences and inspections;

(c) all existing conditions and limitations respecting the operational environment at the applicable site (including the labour conditions at the site, the physical conditions at the site, the health and safety practices at the site, the other administrative practices at the site, the normal working hours at the site, the potential delays that may be incured [sic] as a result of access or similar restraints or as a result of other contractors or work being conducted in the vicinity that the services, contemplated by this RFQ, are to be provided); and

(d) all terms of the Agreement; (collectively, the “Due Diligence Information”).

The prices set out by each Bidder in its Quotation are deemed to include all the costs associated with the Due Diligence Information. 407ECGP will make no allowance to any Bidder (whether by an extension to the Project schedule, by an additional payment or otherwise) because of any failure to carry out sufficient examinations or any failure to obtain any Due Diligence Information. By submitting a Quotation, each Bidder represents and warrants to 407ECGP that:

(a) the Bidder has familiarised itself with all matters respecting the site, the services and the Due Diligence Information, including all special conditions respecting the site and the services which are not referred to in the Scope of Work;

(b) the Bidder has relied solely on the Bidder’s findings, conclusions, interpretations and other opinions in evaluating the risks, contingencies and other circumstances that may be encountered in carrying out all the requirements of this RFQ;

(c) the Bidder has made due allowance (including by way of pricing) for all those matters referred to above in this section 6 in such Bidder’s Quotation; and

(d) all the information contained in the Quotation Form Letter and all Appendices is accurate, complete and not misleading.

26Section 17 provided that the statements of fact and other information in the RFQ was for general information of the bidders and each bidder releases 407E. The Section reads:

No 407ECGP Guarantees

407ECGP has included statements of facts and other information in this RFQ merely for the general information of the Bidders. Neither 407ECGP nor any of the Representatives make any representation, warranty or guarantee, express, implied or otherwise, as to the accuracy or completeness of any of these statements or other information or any subsequent written or oral statements of fact or other information provided to any Bidder. Each Bidder releases 407ECGP and all Representatives from all claims, demands and other complaints in respect of all such statements, other information and any representation, warranty or guarantee contained in, or omitted from, this RFQ or in any subsequent written or oral statements of fact or other information provided to any Bidder.

27In the Scope and Conditions of Work, section Section 2 described the pricing by lump sum for all the close-cut clearing work and by unit price for the grubbing work.

28For the lump sum work, Section 2 described that it was to include all aspects of the work, such as: labour, supervision, tools, materials, equipment, construction machinery, and the services and utilities required to complete the work described in the RFQ Documents, mobilization of workers and equipment to site, surveys if required by the subcontractor, access and haul roads, crossings, permits, and traffic control (including flagging operations); clearing or close-cut clearing as required by OPS 201, including, cutting of standing trees, stumps, brush, bushes, and other vegetation at ground level including felled materials and windfalls, chipping or removal of all vegetation and merchantable wood, which was to be collected for sale with 407E directing any parties interested in the material to LTS.

29Section 2 also included a Chart for information purposes only outlining areas from an aerial perspective:

Segment	Area (ha)	CC%	cc (ha)	C&G	C&G (ha)
A1	18.8	38.4%	7.2	61.6%	11.6
A2	16.4	34.6%	5.7	65.4%	10.7
A3	5.8	18.6%	1.1	81.4%	4.7
A4	3.9	18.2%	0.7	81.8%	3.2
A5	6.7	32.6%	2.2	67.4%	4.5
Bl	13.8	26.8%	3.7	73.2%	10.1
B2	6.6	28.3%	1.9	71.7%	4.7
B3	12.3	23.0%	2.8	77.0%	9.5
TOTAL	84.3	27.6%	25.3	72.4%	59.0

30Section 1.1.2 set out the work that was excluded, and that 407E was responsible to provide markings showing cutting limits for the work and general site erosion control.

31Section 6 indicated that the work should all be performed in accordance with the RFQ Documents as listed in the section. Documents included drawings showing the different segments requiring tree clearing.

32Section 7 dealt with payment terms indicating that invoicing terms are net 45 with invoicing submitted once monthly.

33Section 8 set out criteria for determining price changes to scope of work referring to an Article in the General Conditions, GC 3.10. The section also set out the percentages to be added for “cost plus” basis of 15% for labour, 15% for materials, and 5% for subcontracted work.

34Section 9 titled “Work Schedule” described that the bidder shall have examined the Site, Scope of the Work included in this document, the schedule proposed by the bidder included as Appendix “L,” and that the bidder undertook to complete the work indicated in the Work Schedule. Further, it relayed that it estimated a start date of March 1, 2013, and all tree falling activities must be completed prior to the migratory bird period and prior to April 20, 2013. If the bidder fails to complete all tree falling activities, a liquidated damages claim of $5,000 per day applies. All required clearing and close-cut work and all grubbing was required to be completed by no later than September 30, 2013. Before commencing grubbing, the subcontractor must request and receive direction from the contractor to proceed.

35Section 12 set out the process if the quotation is accepted and the awarding of the subcontract.

36The various profile drawings and aerial photos⁴ for the different segments. The aerial photos showed a yellow line, white line, and red line. It is not disputed that the white lines marked as the ROW was the proposed area for the highway. 407E’s perspective was that the areas required clearing of all trees and vegetation. The yellow line, from 407E’s perspective, showed areas where it indicated significant cutting would be required. LTS considered the yellow line as the area for which it was responsible to cut and clear. The areas outlined in white and yellow were for information purposes only. The profile drawings provided the elevations of the ground for each of the segments.

37A copy of the general conditions marked draft was provided, which formed part of the terms of the work.

38The OPS 201 provided what was required to perform clearing, close-cut clearing and grubbing. OPS 201 defined the meaning of all three terms.

LTS Quotation

39On February 11, 2013, LTS provided its quotation for the work. The original quotation was $660,363 excluding HST. The amount was later revised due to an error on the part of LTS to $687,849.36 (the Quotation).⁵ Ms. MacDonald advised 407E that it failed to include the RFQ Bidder Acknowledgement with the Quotation and submitted the acknowledgement later by mail.

40In the Quotation, LTS provided a Chart indicating the breakdown per Segment of its price. The Chart is basically the same Chart provided on the RFQ but with the dollar amount figures supplied by LTS. The Chart shows a total area of 84.3 hectares (ha) or 208.31 acres with separate calculation for close cut clearing and clearing and grubbing. Again, this figure was revised on February 21, 2013 by Ms. MacDonald as signified by her dated signature. The quotation does not break down how LTS came to their pricing figures, nor does it break down the different elements included in the price, such as mobilization, chipping, removal of vegetation and surveying. After receipt of the Quotation, the MacDonalds attended a meeting to review the Quotation.

Quotation Review Meeting

41LTS attended the Quotation Review meeting separately from the other bidders, Boychyn Excavating Ltd. and SFB.

42The meeting was held on February 20, 2013. In attendance at the LTS meeting was Mr. DeMerchant, Mr. Medel, Mr. Dean, Mr. Beltran, Mr. Rubio, and Mr. Alonso along with both MacDonalds.

43Neither of the MacDonalds took any notes of the meeting. Mr. DeMerchant took notes.⁶ There is no dispute that the purpose of the meeting was to explain the Quotation and for 407E or LTS to seek any information or explanation of the Quotation and Project. Further, nothing said in the meeting is legally binding on any party unless such is included in the subcontract, if the Quotation is accepted.

44LTS’s evidence is that at the Quotation review meeting, LTS made it clear that LTS was only cutting 25.3 ha. None the 407E witnesses at the meeting recall such a comment. There is no indication of such a comment in the notes of the meeting nor is there any follow up email or correspondence from LTS confirming the limit of their cutting. The evidence of the 407E attendees at the meeting was that it was made clear that the area of cutting was to the ROW.

45The evidence of the 407E attendees at the Quotation Review meeting were similar. They would remember clearly if there was an area limit by LTS for clearing that was not to the ROW. The Quotation would not have been accepted.

46Mr. Dean testified that after the meeting, he and Mr. MacDonald went to the Project Site to review the Environmentally Sensitive Areas and the steep slope areas around the riverbanks that required hand-cutting.

47The 407E attendees at the meeting decided to accept the LTS quotation. LTS was asked very tough and pointed questions. LTS answered the questions satisfactorily. LTS appeared to be “young go getters” to take on their first large job. As result of the meeting, 407E was more comfortable with LTS.

48The Quotation was accepted, and a Letter of Intent (LOI) would be drafted and sent to LTS with a Subcontract to follow.

Letter of Intent

49After the Quotation Review Meeting, LTS increased their price per written correspondence dated February 21, 2013. Even though the original price was accepted at the meeting, 407E agreed to increase the Quotation price to the new price.

50407E decided to send a LOI to LTS based on their Quotation and the terms set out in the RFQ.

51On March 1, 2013, 407E issued a LOI⁷ to LTS. It was the evidence of 407E that a LOI was issued to confirm that LTS was given the work, confirm the price for the work, to permit LTS to organize itself to do the work by organizing its labour and its mobilization on site. This purpose was not disputed by LTS. The LOI reiterated that the tree falling work is expected to take 27 days prior to April 20, 2013 due to the Migratory Birds Convention Act. LTS accepted the LOI without reservation and signed back on March 4, 2013, at the kick off meeting

Kick Off Meeting

52A Kick Off Meeting was held on March 4, 2013. Minutes of the Meeting⁸ were drafted and circulated to all those in attendance. The Minutes confirmed that LTS could take any of the logs with everything else to be chipped and spread and that GPS coordinates and maps for everything are on site. A Contract Agreement would be drafted and sent out shortly for review. Payment terms are net 45 days and 407E will endeavour to “fast track the invoicing process to maintain positive cash flow of LTS.”

Subcontract Agreement

53The Subcontract Agreement (the Subcontract)⁹ was drafted and sent to LTS. It was signed by both parties. The Subcontract included:

(a) the Chart of LTS with the revised pricing of $687,899.36. The Chart was not exactly the same as in the Quotation.

(b) Final version of the General Conditions.

54Ms. MacDonald testified that before signing the Subcontract, she had her lawyer review the Subcontract.

55Before the Subcontract was signed by both parties, mobilization commenced. LTS agreed to fast track the mobilization payment once LTS provided a cash flow breakdown for the mobilization. LTS provided the breakdown in an email dated March 7, 2013 and an invoice dated March 18, 2013, bearing invoice number 233 in the amount of $90,023.67 with no deduction for contraction lien holdback of 10%. Upon receipt of the email, Mr. DeMerchant responded in an email dated March 18, 2013 that the form and content of the invoice does not comply with the invoicing policy and to whom to send the invoice. He also noted that a statutory declaration may be required. A deduction for the 10% holdback was also required. The invoicing policy was attached to Mr. DeMerchant’s email, which was provided before the Subcontract was signed.

56The re-sent mobilization invoice with a construction lien holdback deduction was paid on March 28, 2013.

57The Subcontract described the price for the work being the lump sum price for the clear cutting and the estimated price for the unit pricing for the grubbing. Section 2.1 states that the work includes all work required for the clearing, close cut clearing and grubbing of the 407 East extension Project, which included any survey required for the Subcontractors records, close cut clearing as per OPS 201 where all clearing work shall be performed as close cut clearing, chipping or removal of all vegetation, merchantable wood should be collected for sale, and that 407ECGP will direct any parties interested in the material to the Subcontractor, grubbing as per OPS 201 with locates as required. Determination of areas where grubbing is required shall be laid out by the Contractor (407E).

58The Subcontract at section 6 sets out the Contract Documents along with the sequence of priority if there is any conflict or inconsistency in the Contract Documents. Section 7 described the criteria for determining prices of changes in work, as set out in GC 3.10. Section 9 set out the process for payment, payment terms, and invoices. Section 15, titled “Single and Unique Contract” reads:

The Subcontract Documents shall constitute the one and only Contract between the Parties and the Contractor will not be bound by any prior representations, guarantees, undertakings, promises, agreement or understandings not spelled out in this Subcontract Agreement.

59Attached to the Subcontract as Exhibit “A” is a chart that sets out the price of work per segment, for mobilization and bonding. The chart created by LTS setting the price and volume of area was not attached or referred to in the Subcontract.

Commencement of the Work

60LTS commenced its work to fall the trees before April 20, 2013, after the Kick Off Meeting but before the signing of the Subcontract. 407E gave direction to LTS to proceed on March 5, 2013. LTS commenced on site on March 7, 2013, in Section 3.

61On March 7, 2013, Mr. MacDonald testified that he had a conversation with Mr. Taylor on site wherein Mr. Taylor told him that LTS was to cut all the trees and vegetation to the ROW, that 407E would survey the area at the end of the work and pay extra for any additional trees cut. Mr. Taylor, in his evidence, denied such a conversation. Mr. Taylor, along with other LTS witnesses (which will be discussed below) testified that the Subcontract was to cut all the trees and grub all the directed areas to clean the ROW so the 407 highways could be constructed. 407E’s position is that this is known clearly from the RFQ, the Quotation, and the Subcontract.

62LTS commenced work on Section 1 on March 14, 2013, and on Section 2 on March 19, 2013.

63LTS alleges that it cleared the trees as required from its Quotation and the Subcontract in that the clear-cut clearing was limited to 25.3. ha. and any cutting over that volume is an extra to the Subcontract. LTS’s position is that it was only responsible to cut within the yellow lines and not within the white lines.

64Shortly after the commencement of the work, it appears that LTS’s and 407E’s interpretation of the scope of work was not aligned.

The Work and Termination

65As the work progressed, a dispute arose between LTS and 407E. The scope of work was an issue. The rate of the work and the performance of the work by LTS was an issue. 407E determined that LTS could not complete the work as contracted within the time frame contracted. 407E terminated the contract with LTS in September 2013 and alleged that it incurred substantial damages to complete the work and rectify the lack of performance by LTS.

The Lien

66LTS delivered a copy of its claim for lien to Her Majesty the Queen in Right of Ontario and 407E on October 17, 2013 (the “First Lien”).

67On November 22, 2013, LTS registered a claim for lien against the title of the lands (the “Second Lien”).

68LTS’s last day of supply of services and materials to the improvement was on September 4, 2013.

ISSUES TO DECIDE

69The issues for this Court to adjudicate are:

(a) What is the Contract that governs? What is the scope of work?

(b) Did LTS’s performance and conduct adhere to the terms of the Subcontract?

(d) Is any amount owed to LTS from the Subcontract or for extras?

(e) Did LTS suffer damages due to the conduct of 407E?

(f) Does LTS have a claim based on quantum merit and if so, what is the amount?

(g) Is 407E entitled to damages and did they suffer damages due to the performance and conduct of LTS?

(h) If 407E is entitled to damages, what is the quantum?

(i) Is the claim for lien of LTS timely?

(j) Did 407E suffer damages due to the claims for lien and if so, in what amount?

A. What is the Contract that governs? What is the scope of work?

70There is no factual dispute that the Subcontract was signed by LTS and 407E. LTS was given a copy of the Subcontract before signing and LTS gave the Subcontract to their lawyer to review before signing. LTS argues that the Subcontract is not the Contract that governs the terms of the work and contractual relationship between it and 407E. LTS argues that the contractual agreement that governs their relationship is the LOI. 407E disagrees and argues that the Subcontract is the governing contractual agreement, not the LOI.

71LTS argues that:

(a) The Scope of work in the Subcontract was to cut between the yellow lines.

(b) That if the scope of work was to cut up to the ROW, then that is a change without consideration and is invalid.

(c) If the scope of work was to cut up to the ROW, then the Court should rectify the Subcontract where the scope of work is to cut between the yellow lines.

Between the Yellow Lines

72Justin MacDonald and Amanda MacDonald testified that Mr. DeMerchant did not tell them that all the trees in the ROW needed to be cut or that LTS should provide a price to close cut clear all of the trees or that LTS could not rely on the quantities for close cut clearing or grubbing.

73It is also the evidence of LTS through Ms. MacDonald that she did not read the RFQ in detail. She did not read the General Conditions in the RFQ. Further, she skimmed the Subcontract and did not read the General Conditions in the Subcontract. Ms. MacDonald further testified that she assumed that the trees to cut were those in the yellow lines and did not seek any clarification or ask any questions of 407E before providing their quotation or signing the Subcontract.

74The difficulty I have with the testimony of Ms. MacDonald and Mr. MacDonald is it is contrary to the clear language in the procurement package documents including the RFQ. The RFQ clearly indicated there were no representations outside the documents provided. LTS has to conduct its own due diligence to confirm the areas of the scope of work. LTS was responsible to come up with a lump sum figure to cut all the trees inside the ROW. Given the RFQ and documents provided to all bidders, which included the aerial photos, the testimony of both Mr. and Ms. MacDonald on this point has little credibility. There is no reason for Mr. DeMerchant to have advised LTS that the area for clear cut clearing was within the ROW.

75As it relates to the grubbing, the price was a unit price and thus the amount could change depending on the areas grubbed.

76Consequently, from my review of the RFQ and the documents included along with the Subcontract, the Court finds it is quite clear that the close cut clearing work to be performed were up to the white lines or from ROW to ROW.

77The RFQ indicates that the pathways of the proposed highway had to be cleared of all trees and vegetation. This makes logical sense given that it was the intention to build a highway in the pathway. The aerial photos show the pathway of the highway through the white lines, which are marked ROW.

78The yellow lines in the aerial drawings clearly do not signify all the trees or vegetation that are known from the various aerial drawings. There are trees and vegetation that are not circled in yellow that are in the pathway of the highway.

79The evidence of both Ms. MacDonald and Mr. MacDonald is that they visited the site. Mr. MacDonald testified that he was very familiar with the area and from his walking in the area and his knowledge and experience, he was able to ascertain the area required for tree cutting and vegetation removal.

80The RFQ and Quotation clearly indicate that LTS must perform its own due diligence and should not make any assumptions. That any survey required must be done by LTS. LTS acknowledged in the Quotation Form letter they executed that they carefully inspected the project site and examined the instructions to Bidders and other RFQ Documents.

81The RFQ Documents and figures provided clearly state that the data provided is for information purposes only.

82The Court does not accept the suggestion from LTS that the areas for cutting and clearing are those areas only located in the yellow lines. The RFQ documents that include the RFQ Rules state that the obligation is on LTS to do its due diligence and ask any questions or clarify any matter to provide a complete quotation to perform all the work set out. The Court is of the view that LTS made an assumption that the areas for cutting are those in the yellow lines. That is an assumption made. It was not correct, and it is not what was shown from the documents and aerial photos provided.

83The Court concludes that LTS was to clear all the trees and vegetation up to the white lines, from ROW to ROW, and find that was the scope of the work for the lump sum portion of the Quotation and Subcontract.

Was there a change in the Subcontract?

84LTS argues that if the Court determines that the scope of the work was between or up to the white lines, then there was a change in the Subcontract from the LOI without consideration and is therefore invalid. The preexisting agreement was with the LOI. The increase in the area requiring cutting and clearing between the white lines from the yellow lines was a change to the Subcontract without consideration.

85In support of that argument, LTS has provided the Court with the cases of Gilbert Steel v. University Construction (1976), 1976 672 (ON CA), 12 O.R. (2d) 19 (C.A.), at paras. 10 and 14 and Francis v. Canadian Imperial Bank of Commerce (1994), 1994 1578 (ON CA), 21 O.R. (3d) 75 (C.A.), at para. 22.

86The Court has no disagreement on the law of consideration as explained in the above Court of Appeal decisions. As the Court stated in Francis:

This principle of contract law, namely, that new or additional consideration is required to support a variation of an existing agreement, was implicitly recognized by this court in the context of an employment relationship in Stott v. Merit Investment Corp. (1988), 1988 192 (ON CA), 63 O.R. (2d) 545, 48 D.L.R. (4th) 288 (C.A.). Finlayson J.A., for the majority, found that there was consideration for the variation and that the variation had not been obtained by undue influence. Blair J.A., in dissent, found that there was no valid consideration and would not have enforced it. See also The Law of Dismissal in Canada, by Howard A. Levitt, 2nd ed. (Aurora: Canada Law Book, 1992), at p. 61.

87The Court does not find that there was a change in the Subcontract in the area required for clearing and cutting for the lump sum portion of the Subcontract. The areas required as shown in the RFQ and the LOI are the same as in the Subcontract: the area within or up to the white lines, from ROW to ROW. It is therefore concluded that the law of consideration does not apply in these circumstances.

Rectification

88LTS further argues that the Subcontract should be rectified in that the revised RFQ in the LOI was that the area to close cut clear for the lump sum portion of the Subcontract was limited to the area of 25.2 hectares being the area measured by Ms. MacDonald in the yellow lines. I take this argument to mean that in the revised RFQ and in the LOI, the area for clear cut clearing was limited by area in the revised RFQ in the LOI. In addition, the General Conditions were changed from the RFQ to the Subcontract. The Subcontract should be rectified to correspond with the general conditions in the LOI.

89Ms. MacDonald testified that she had her lawyer review the contract, which included the chart attached to the contract and the general conditions. However, the Subcontract and General Conditions was not given to her until the day it was signed, March 22, 2013. Ms. MacDonald testified that she was not given the opportunity to review the Subcontract and was not advised by 407E that the general conditions in the Subcontract were changed from the general conditions in the RFQ.

90However, the sequence of emails in March 2013 indicates that LTS was provided the Subcontract, which included the chart and the general conditions before the meeting on March 22, 2013. Emails produced in the evidence of Mr. DeMerchant indicate that a draft of the Subcontract was ready on March 8, 2013. An email from Ms. MacDonald indicated that LTS had a very busy weekend and were going over the contract and that LTS would be sending an invoice for mobilization “in the meantime.” An email from Michel Landreville dated March 20, 2013 indicated a conversation with Ms. MacDonald that she assured him that she will be hearing back from her legal counsel tonight and “(u)pon receiving this advice they intend on signing the contract agreement and would then submit an invoice for mobilization.” In an email dated March 21, 2013, Ms. MacDonald confirmed that LTS has spoken with their lawyer, and the contract will be ready for signing tomorrow afternoon. Justin MacDonald dropped off the invoice for mobilization and that bonding should be sorted out by the end of tomorrow.

91I do not accept the testimony provided that LTS was not given the opportunity to review the Subcontract which included the chart attached and the general conditions. LTS was given such an opportunity. LTS had their lawyer review before signing. Whether the Subcontract which included the chart attached and the general conditions were read in depth, this Court does not know. However, given the testimony of Ms. MacDonald that she skimmed the documents, this Court doubts that it was. There was no evidence presented that LTS objected to the terms of the Subcontract, the chart attached or the general conditions before it was signed on March 22, 2013.

92For the principles of rectification to apply, there must be a common or unilateral mistake in recording the agreement. The Supreme Court of Canada in Canada (Attorney General) v. Fairmont Hotels Inc., 2016 SCC 56, [2016] 2 S.C.R. 720, stated at para. 38.:

To summarize, rectification is an equitable remedy designed to correct errors in the recording of terms in written legal instruments. Where the error is said to result from a mistake common to both or all parties to the agreement, rectification is available upon the court being satisfied that, on a balance of probabilities, there was a prior agreement whose terms are definite and ascertainable; that the agreement was still in effect at the time the instrument was executed; that the instrument fails to accurately record the agreement; and that the instrument, if rectified, would carry out the parties’ prior agreement. In the case of a unilateral mistake, the party seeking rectification must also show that the other party knew or ought to have known about the mistake and that permitting the defendant to take advantage of the erroneously drafted agreement would amount to fraud or the equivalent of fraud.

93In 2484234 Ontario Inc. v. Hanley Park Developments Inc., 2020 ONCA 273, 150 O.R. (3d) 481, the Ontario Court of Appeal found that for the principle for rectification to apply, deceit or fraud in the strict legal sense is unnecessary. The Court looks at the conduct that makes it unconscionable for a person to avail themselves of an advantage obtained. Courts look at unfair dealing and unconscionable conduct requiring equitable relief: Hanley Park Developments; Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd., 2002 SCC 19, [2002] 1 S.C.R. 678, at paras. 31 and 39.

94In the circumstances here, the Court does not find that there is any unconscionable conduct or unfair dealing by 407E for this Court to conclude that the Subcontract requires rectification.

95It was clear from the procurement process that all trees and vegetation must be cleared to permit the highway to be constructed. It was also clear that for that portion of the work for close cut clearing would be a lump sum. From 407E’s perspective, that makes sense. 407E wanted that entire area close cut cleared within the ROW. 407E did not particularly care about the measurement of the area within the ROW. They would pay by lump sum to close cut clear the whole area within the ROW. It was for LTS to ascertain the area and the cost to clear it. It was a lump sum for 407E to avoid a discussion later about the size of the area to close cut clear.

96LTS knew this clearly from the RFQ. The LOI and Subcontract were no different. Clear the whole area. Close cut clearing was lump sum. Grubbing was unit price.

97This Court sees no requirement for rectification. There is no mistake in the Subcontract. There may have been a mistake from LTS’s perspective in the measurement of the area required to be close cut cleared. However, this is not an error in the Subcontract as written. This is not a unilateral mistake that 407E took advantage of. It was always to be a lump sum. There is no conduct of 407E that compels this Court to rectify the Subcontract.

98LTS also asserts that 407E breached its duty of honest performance: Bhasin v. Hrynew, 2014 SCC 71, [2014] 3 S.C.R. 494. The Court will discuss this later in these reasons when dealing with damages.

B. Did LTS’s performance and conduct adhere to the terms of the Subcontract?

99There are two aspects of LTS’s conduct that will be examined. The first will be its close cut clearing and grubbing work. This includes areas within the environmentally sensitive areas (“ESA”). The second will be its applications for payment and change order requests (“COR”).

Close Cut Clearing and Grubbing

100LTS asserts that it complied with its contractual terms in close cut clearing and grubbing. LTS asserts that 407E prevented it from performing its contractual obligations in an efficient manner by interfering with its progress of work and not marking the areas that needed grubbing or the ESA.

101The Court will first start with the obvious statement that LTS did not comply with its terms of the Subcontract in that LTS was of the view that it only had to close cut clear within the yellow lines. The Court has concluded that LTS was incorrect and that the terms of the Subcontract was to clear all the areas within the white lines, from ROW to ROW. So, from failing to clear from ROW to ROW, LTS was in breach of the Subcontract.

102In addition, LTS asserts that 407E interfered with LTS’s ability to progress with the work in an efficient manner. 407E failed to mark the ESA or areas required to grub in a timely manner.

103The starting point is the Subcontract. GC 3.03 provides 407E authority to instruct LTS to modify or change methods of operation or equipment or the sequence of work. The general conditions further indicate that LTS will be working on the project with other contractors and must accommodate its work with this realization.

104Based on the Subcontract terms, LTS did not have exclusive domain over the project lands to perform its work and when instructed by the 407E in writing to alter its sequence of work, it must do so to prevent interference with other work.

105At the beginning of the work by LTS, it appears that there were little complaints. LTS appears to have met the deadline of falling all trees by April 20, 2013.

106The issue was the clearing and grubbing. 407E asserts in their evidence presented that LTS was slow in performing their work. There were issues of LTS failing to clear and grub efficiently to meet their work deadline of the whole area cleared by September 30, 2013.

107There is much correspondence between 407E and LTS on the lack of progress. The failure of LTS to clear, grub, chip and remove logs from the ROW to facilitate the full clearing and to accommodate other subcontractors to do their contracted work is noted in the correspondence.

108In the affidavits of Justin DeMerchant, Ken Dean, Gabriel Medel, Gary Coull and Hector Rubio, and the exhibits attached to those affidavits, are emails stating the concerns 407E had with the lack of progress of the work of LTS. The failure to remove logs from the ROW prevent the ability to perform grubbing and for other subcontractors to perform their work.

109On the issue of marking the limits within the ROW, LTS provided the affidavit of Mr. Henderson. Mr. Henderson in his affidavit deposed that 407E did not stake the limits when he was there. Mr. MacDonald also testified that the limits were not marked. 407E’s evidence is quite different. Mr. Dean, Mr. Coull, and Mr. DeMerchant provided evidence that included supporting documentation that the limits were marked by the end of March 2013. Different sections were marked at different times in March 2023. LTS has not provided any supporting documentation that indicates that the limits were not marked or that the failing to mark the limits resulted in LTS not being able to perform its work. I prefer the evidence of 407E and find that the limits were marked in March 2013 and that LTS was not prevented from performing its work under the Subcontract by any failing to mark the limits.

110On the issue of staking for grubbing, the evidence presented by 407E including emails and Weekly Reports indicate that the grubbing for Segments B-1 was completed by June 7, 2013, B-2 by July 12, 2013, and B-3 by July 26, 2013.

111However, the Weekly Reports also indicate that there was very little work performed in the month on August 2013 by LTS. The weekly reports from August 3, 2013 to August 30, 2013 describe very little clearing, grubbing or chipping work being performed by LTS. The Weekly Reports also indicate other subcontractors doing work that was contracted by LTS to perform due to LTS’s non-performance.

112There are also various emails sent in the month of August 2013 to LTS from various 407E employees requesting LTS to perform work. Their failure to perform is preventing other subcontractors of 407E to perform their work. Other subcontractors are performing LTS’s work to get it done and lessen the delay of work by other subcontractors.

113This evidence is bolstered by the testimony of Ms. MacDonald that LTS performed little work in August 2013.

114It is clear to the Court from the evidence presented that there were concerns on the lack of performance and concerns whether LTS will be able to complete its work by September 30, 2013. 407E also appears to be incurring costs from other subcontractors to perform the work of 407E in order to get that work performed to allow the other subcontractors to perform their contracted work.

115The Court finds that LTS was not performing its contracted work, such as clearing from ROW to ROW, grubbing as required, and the chipping or removing of logs. Hence, other subcontractors were forced to perform LTS’s work in order to perform their contracted work.

Applications for Payment and COR

116The Subcontract and the documents included in the Subcontract and the General Conditions and Invoicing policy, set out the requirements for COR and payment applications.

117The invoicing policy was also directly submitted to LTS by Mr. DeMerchant on March 18, 2013 via email as discussed above.

118Notwithstanding the documents included in the Subcontract and the Invoicing Policy sent, LTS, from the evidence presented, was having difficulty submitting requests for payment properly and accurately along with submitting CORs properly or accurately. 407E attempted to assist LTS on the proper process and the information and documents required to submit application for payment to the accounting department to obtain payment and any CORs for request for extra work payment.

119The evidence presented shows, in the view of the Court, that LTS did not initially have the experience or understanding of the process required to submit an application for payment correctly or that of CORs.

120LTS did not follow the payment application procedure and submitted invoices that did not comply with the proper procedure. After being assisted by Mr. DeMerchant¹⁰, LTS submitted an application for payment for work performed, which is not disputed.¹¹

121Concerning CORs, which will be discussed more thoroughly below, LTS did not always comply with the Subcontract in requesting CORs in a timely basis or in consistent amounts. As will be discussed, LTS’s request for alleged extra work was constantly changing for the same work. CORs were made after LTS was no longer on the Project. Many were made years after LTS left the Project.

C. Did 407E have the right to terminate and was the termination proper?

122In the latter part of August 2013, Mr. Hems instructed that no further payments should be made to LTS due to their non-performance in August and that 407E was incurring costs to complete 407E and sent to written notices to LTS terminating the Subcontract. This first written notice is dated September 18, 2013 (erroneously dated September 16, 2013),¹²and the second is dated October 2, 2013.¹³

123Prior to sending the written notices of termination, 407E sent emails to LTS advising LTS that they were not performing. There was plenty of unfinished work. One such email was sent August 8, 2013 concerning the lack of completion in Section 2. In that email, Mr. Beltran advises: “As we have also discussed, the delay of your works [sic] is interfering with the start and the work of other Subcontractors. We still have pending in our Section, among other, [sic] the following work.” He goes on to list six areas of concern. He further states:

The delay of your works [sic] is interfering with the start and the works [sic] of other subcontractors which will mean extra costs that we are not going to admit.

We have been trying to meet with you during the whole week with daily emails and calls.

124LTS did not respond to this email.

125On August 22, 2013, LTS issued an application for an extension of the completion date by thirty days. On August 27, 2013, LTS wrote that it had the intention of fulfilling their Subcontract. On September 3, 2013, Ms. MacDonald emailed 407E requesting a meeting and apologized for the past few weeks. She conceded that LTS has been very unproductive on site. She stated:

We have invested everything, plus, into this contract. We have the ability to see this through, but you must consider the cost of doing so, and what is has costs [sic] us so far.

126407E did not grant the extension requested. In a letter dated September 18, 2013 sent by 407E, 407E took the position that from September 3, 2013 to the date of the letter, no work was performed by LTS. In the September 18, 2013 letter, 407E advised LTS that effective immediately, no LTS workers would be allowed on site. 407E asserted that LTS had abandoned or terminated the Subcontract by having no workers on site and failing to perform its contracted work. LTS showed no intention to complete the Subcontract. 407E acknowledged receipt of the LTS Change Order Request dated September 5, 2013 relating to work performed and indicated that the request will be analyzed and discussed in due course.

127On September 20, 2013, a meeting between 407E and LTS was held. There was no resolution. 407E advised that no further payments would be forthcoming given LTS’s lack of performance.

128After the meeting and on September 20, 2013, pursuant to the terms of the Subcontract (GC4.05), 407E sent a Notice of Default letter which gave LTS five business days to cure the default.

129LTS did not respond directly to the Notice of Default or cure the default listed.

130On September 27, 2013, LTS’s lawyer sent a letter indicating that it accepted 407E’s repudiation of the Subcontract and in the alternative, noted that 407E is in default of the Subcontract.

131On October 2, 2013, 407E sent a Notice of Termination of the Subcontract.

132LTS asserts that the September 18, 2013 letter of 407E terminated the Subcontract. The letter dated September 20, 2013 that complied with GC4.05 was too late. The September 18, 2013 letter that did not strictly comply with the terms of the Subcontract was never withdrawn.

133There was no evidence presented that from September 18, 2013 to September 20, 2013 LTS attempted to attend the site to do any further work. Further, from September 20, 2013 to September 27, 2013, there was no evidence presented that LTS attempted to cure any default or take any steps to attend on site to perform its Subcontract work.

134It was not until September 27, 2013 that there was a response from LTS and that response was to accept the repudiation of the Subcontract. Again, no steps were taken to cure any of the default before the Notice of Termination.

135GC406 sets out the subcontractor’s right to cure any default. LTS did not comply with GC406.

136GC407 sets out the contractor’s right to correct default by stating without prejudice to any other right or remedy the contractor may correct such default and deduct the costs.

137It seems clear to the Court that from August 3, 2013 to September 18, 2013, LTS did little to no work. The question becomes did the September 18, 2013 letter terminate the Subcontract or was it terminated sometime later?

138In reading the September 18, 2013 letter, 407E did not terminate the Subcontract. The letter reads: “Despite your assertion to the contrary, it is apparent that you have abandoned the work and effectively terminated the Subcontract. Effective immediately, no Lumberjacks personnel or persons under its control or direction are permitted on the 407 East Extension site.”

139Upon receipt of this letter, LTS did not reply to it. The Notice of Default was sent two days later after the meeting. After receipt of the Notice of Default, LTS took no steps to cure the default.

140LTS’s lawyer’s letter dated September 27, 2013¹⁴ does not refer to the Notice of Default received by LTS on September 20, 2013. The five business days to respond to the Notice of Default expired on September 27, 2013.

141This Court does not find that the Notice of Default dated September 20, 2013 was ineffective as asserted by LTS. LTS made no attempt to remedy the default or respond to the Notice of Default. LTS did not respond to the letter dated September 18, 2013 until after receipt of the Notice of Default; the day that the five-day period to cure any default expired. The difference from September 18, 2013 or September 20, 2013 made no difference. The days from September 18 or 20, 2013 to September 27, 2013 made no difference. There is no evidence that LTS would have cured the default or attempted to attend on site to do work during this time period. There is no evidence presented that the outcome, that is LTS failing to complete the Subcontracted work, would not have been the same: see Absolute General Contractors Ltd. v. E. & W Aluminum Products Ltd., 2010 ONSC 145, at para. 67.

142This Court concludes that the Notice of Default is effective. The Subcontract was terminated either on September 27, 2013 when LTS’s lawyer sent the letter accepting an alleged repudiation or when the five-day period to cure default expired. The latest when the Subcontract was terminated is on October 2, 2013.

143The question remaining is did 407E have the right to terminate the Subcontract? I find that it did on two grounds: Either per the terms of the Subcontract, which it utilized; or on the fact that LTS failed to perform as shown by its minimal to no work in August and September 2013.

144There is no factual dispute that LTS did minimal to no work in August and September 2013. 407E lost confidence in LTS’s ability to complete the Contract on time. Despite requests to perform work by 407E, LTS did not do so. It was known from the beginning that the work to be performed by LTS was time limited. It was critical that LTS’s work got completed so the pathway of the highway would be cleared to proceed with the road building. The Court is satisfied that LTS was not performing its work in a manner that led to a conclusion that its work, that is clear the ROW, would be completed by September 30, 2013. Accordingly, this Court concludes that the sending of the Notice of Default by 407E was legitimate.

D. Is any amount owed to LTS from the Subcontract or for extras?

145LTS sent eight invoices to 407E for a total of $433,627.09.¹⁵ 407E paid to LTS the sum of $366,215.68. This leaves a difference of $67,451.41. Holdback is also owed to LTS in the amounts of $9,022.37, $18,509.96, $2,561.93, $1,921.45, $4,013.70, $512.39, $284.66, and $5,831.41 for a total $42,657.41, plus HST being $44,407.34.

146As described in paragraph 7 above, LTS has seven heads of damages for which it is claiming compensation. I will deal with each head separately.

Extra for close cut clearing: $3,106,455.79[^16]

147The Court does not accept this extra claim for three main reasons.

148First, there is no extra for close cut clearing work within the ROW. It was a term of the lump sum portion of the Subcontract. The Subcontract terms govern.

149Second, the reliability of the calculations.

150Third, the terms of the Subcontract concerning additional work.

151This Court has determined that a term of the scope of work for the lump sum portion of the Subcontract was to clear ROW to ROW. Thus, any work for clearing in that area is part of the Subcontract and is not an extra. Any work outside the ROW is not part of the Subcontract and can be claimed as extra work, subject to the procedure to request for additional work, as outlined in the Subcontract.

152LTS has claimed for close cut clearing work performed as follows:

(a) On July 23, 2013, LTS made a Request for Clarification (RFC) that the Subcontract lump sum work was limited to 25.3 ha. and was seeking an additional $2,501,264.81 net any payments made. By letter dated July 29, 2013, the request was denied. The calculations of areas were not agreed upon. LTS did not provide survey calculations to support their request, as required in section 2.1 of the Subcontract.

(b) September 6, 2013, LTS delivered a Change Order Request (COR) seeking $883,436.66. In justifying the request, Ms. MacDonald indicated that the Chart of areas for information purposes only was misunderstood and that LTS needed far more work than they anticipated and considered in their quotation. This figure was exclusive of any payments made by 407E.

(d) The Amended as Fresh Statement of Claim increased the amount to $3,856,380.34 net any payments made.

(e) Exhibit 21 claimed $2,768,962.08 net any payments made.

(f) Schedule 1 in the Closing submissions based on 2013 photos, claims $2,899,684.03 net any payments made.

(g) Schedule 2 based on 407 calculations and 2013 photos, claims $3,106,284.56 net any payments made.

153There is no consistency in the calculations submitted by LTS. The amounts changed with new calculations from Ms. MacDonald. These changes were made depending on which Google Earth version she used to calculate areas, or her review of areas from the photos. The amounts changed because her calculations of areas of clear cut changed.

154With these many changes and inconsistencies in the calculations of area and amounts, the Court cannot give much weight or reliability on the calculations for any additional work for close cut clearing. LTS could have retained a surveyor; it did not. LTS could have retained an independent expert to do the calculations; it did not. LTS completely relied on the evidence of Ms. MacDonald for their calculations. Ms. MacDonald is an owner of LTS. Ms. MacDonald has a vested interest in the outcome of this litigation. Her independence is questionable.

155The Subcontract has a procedure LTS is obligated to utilize if it requests additional work, the COR. LTS used that process for the COR made in September 2013. LTS made no further COR until after the Subcontract was ended and well into this litigation. GC3.10.4 states: “No pay items for any work that is purported by the Subcontractor to be Changes to the Work but is not agreed and accepted by both the Subcontractor and the Contractor in writing shall be invoiced to subject to payment.” GC 3.10.02 concerns additional work and indicates that the Subcontractor shall proceed with such additional work upon receipt of a Change Order. With respect to the claim for clear cutting, LTS did not obtain a Change Order before commencing with the work and further did not put in a request for additional work except for the COR in September 2013, well after the work requested in the COR was performed.

156Thus, taking all these concerns together, the Court cannot with confidence rely on the calculations put for by LTS. Further, LTS did not comply with the terms of the Subcontract for change orders. The claim put forth by LTS for additional work for clear cutting is not accepted due to the reasons elucidated above.

157Having said this, 407E has conceded that there are three invoices that it accepts as legitimate additional work. These are invoices 284, 287 and 288.

158Invoice 287¹⁷ for additional clearing in the amount of $7,074.62 with $695.64 plus HST for holdback.

159Invoice 284¹⁸ for clearing in the amount of $4,993.85 plus holdback of $491.04 exclusive of HST.

160Invoice 288¹⁹ for clearing and grubbing in the amount of $5,201.92 plus holdback of $511.50 exclusive of HST.

161These invoices are in the amount of $17, 270.39 plus holdback with HST for $1,918.94.

For grubbing: $124,879.50.

162Pursuant to the Subcontract, grubbing was billed on a unit price basis.

163The grubbing spreadsheet²⁰ shows a claim of $124,879.50.

164LTS’s calculation on the areas for grubbing were not accepted by 407E. 407E had different calculations. For example, 407E did not accept the calculation of area worked in Pay Application No. 5.²¹ 407E accepted 0.42054 ha and not 5.46 ha.

165Again, there was no independent evidence on the calculations for the grubbing. There is no surveyor that calculated the areas that LTS said they grubbed. There is no independent expert that provided a calculation of the areas grubbed. As with the areas for close cut clearing, the calculations for the area were all done by Ms. MacDonald.

166However, there are invoices claimed that are for grubbing work performed by subcontractors to LTS. These invoices were not paid, as Mr. DeMerchant testified, because there was a set off claim and no further monies would be paid to LTS. Notwithstanding the set off claim, these monies were due to LTS. Whether the monies get paid depends on the extent of the set off claim.

167Thus, I find that the work for grubbing in invoices 294²², 295²³ are owing. The amounts are $375.13 x 15% x 13% ($487.48) for invoice 294 and $97.85 x 15% x 13% ($127.16) for invoice 295. For a total of $614.64. The others are invoiced per acre grubbed. The measurement and calculations of area is not agreed upon by 407E, except for invoice 287.

168Given my concern on the reliability of the calculations for close cut clearing, my concern on the reliability for the calculation of areas for grubbing provided by LTS is the same.

169The onus is on the plaintiff to prove on the balance of probabilities that the amounts requested in invoices 306, 307, and 308 are owed and are reasonably accurate. The Court finds that LTS has not discharged its onus.

Extra for additional equipment work: $271,532.22[^24]

170Mr. MacDonald testified that LTS brought in more equipment to accelerate the work. Both Mr. and Ms. MacDonald testified that 407E was demanding that LTS increase their speed to do the work. To do so, LTS brought in further equipment to accelerate the work. There was a cost associated with bringing in more equipment and LTS is seeking those costs from 407E.

171The testimony of Mr. DeMerchant, Mr. Dean, Mr. Medel and Mr. Bragdon was contrary to the testimony of LTS.

172Mr. DeMerchant recollects that there was a discussion that 407E would pay more to LTS if they would accelerate their work and complete it in six weeks but there was no acceleration and LTS did not get the work done in the six weeks.

173Mr. Bragdon, Mr. Medel and Mr. Dean testified that LTS did not accelerate anything. Mr. Medel testified this may have occurred in Section 1, but his recollection was that there was less equipment and less speed.

174Mr. Dean recollects that LTS brought in more equipment but took that equipment away and that there were issues concerning equipment brought in by LTS breaking down.

175In the end of May 2013, there was a meeting to discuss the speed of work. At that meeting, it was discussed that LTS was behind schedule and the speed needed to increase. LTS provided an accelerated schedule²⁵ for Clearing and Grubbing with an extra cost of $45,775.84 to accelerate the work.

176407E agreed to the amount for acceleration for grubbing and clearing.

177A Contract Amendment²⁶ was drafted and executed by 407E. LTS refused to execute the amount that was given by them to accelerate the work. There was no agreement on the acceleration or the amount since LTS refused to execute the Contract Amendment form.

178After the refusal to execute the Contract Amendment, LTS provided 407E various figures to accelerate the work all being in six figures ranging from $104,000 to $156,000. On July 11, 2013, Mr. DeMerchant sent LTS an email indicating he had issues with their request of $121,450.30. Given the lapse of weeks from their refusal to execute the Change to their present figures, it will be a hard sell to increase from the original amount.

179In the end, there was no agreement on a change to the Subcontract for acceleration.

180The evidence is contradictory. LTS presented their evidence that there was a cost to accelerate the work. 407E presented their evidence with documentation that there was no acceleration at all and that there was no agreement per the terms of the Subcontract to change the amount or terms.

181LTS has not provided any evidence, except that of the testimony of Ms. MacDonald and Mr. MacDonald. The emails and documentation provided do not support the contention of LTS that there was an acceleration of work and that LTS incurred costs over and above the costs for equipment to perform the work as outlined in the Subcontract.

182The Subcontract is clear. All equipment to do the work is subsumed into the lump sum price for close cut clearing. For grubbing, it would be a unit price but there is no unit price accepted just for equipment. There are no third-party invoices from subcontractors to LTS that were submitted that directly show equipment for grubbing only.

183LTS’s claim for additional equipment includes a mark up for 5% and 15%. These markups are contrary to the terms of the Subcontract. The Subcontract indicates a 5% markup for equipment and a 15% markup for subcontract work (i.e. labour and materials).

184Further, there is no accepted Contract Amendment that agreed to any change to the Subcontract figures, as required by the terms of the Subcontract.

185The Court is left with very little reliable evidence to support a claim by LTS for an increase in equipment costs with a markup of 5% and 15%.

186The onus is on LTS to provide reliable evidence that proves on the balance of probabilities that LTS incurred additional equipment costs over and above the Subcontract price or a cost for equipment directly for grubbing work performed.

187The Court is of the view that LTS has failed to provide such credible and reliable evidence for the Court to conclude that there are additional costs for rental equipment to accelerate the work as agreed upon in the Subcontract or that there is a specific equipment costs directly for grubbing work completed.

188Given the lack of credible and reliable evidence along with the terms of the Subcontract, the claim for additional equipment costs with the markups is not granted.

Extra for manual cutting: $245,781.37

189LTS makes a claim for additional manual cutting. Mr. MacDonald provided evidence that LTS was unable at the procurement process to ascertain the amount required for manual cutting. He gave evidence that, without erosion control fences erected, he would not be able to determine the amount required for manual cutting. There was no disagreement that after the Bid Review meeting, Mr. MacDonald with a representative of 407E attended at the site to review the slopes and ESAs required for manual cutting.

190In mid-March 2013, there does not seem to be a disagreement that there may be additional costs for manual cutting. 407E suggested that LTS submit a COR outlining their claim for additional manual cutting. Notwithstanding the issue of increase for manual cutting, the Subcontract was executed without any such increase.

191At the end of March 2013,²⁷ after the signing of the Subcontract, LTS submitted a COR for $224,020 dated March 28, 2013 to Mr. Dean asking him to review it before it was submitted.

192On May 8, 2013, a COR for increased manual cutting was submitted in the amount of $121,450.30.²⁸

193On May 27, 2013, Mr. DeMerchant responded to the request indicating that he had an issue with the calculations and that there was no credit given for the Subcontract amount for machine work to perform the cutting.

194On June 24, 2013, Ms. MacDonald provided a revised COR in the amount of $80,757.²⁹

195On July 11, 2013, LTS provided a further COR in the amount of $41, 292.57.³⁰

196Mr. DeMerchant responded to this latest COR indicating that there were some mathematical errors and the amount is $45,225.20.³¹

197Ms. MacDonald testified that most if not all of the manual cutting was completed by mid-July 2013.

198From the evidence presented, the Court concludes that there was a legitimate request for additional costs for manual cutting. The exchanges of emails between LTS and 407E makes it clear that there was such an understanding.

199There was no agreement on the amount as of the end of July 2013.

200After July 2013, LTS provided further amounts for manual cutting, which includes:

(a) October 2013 invoice 301 in the amount of $131,856.18.³²

(b) Invoice 301 in the amount of $450,781.37.³³

201The Court is left with the same dilemma. There is no agreement between LTS and 407E on the amount for the additional manual cutting. The figures for LTS are forever changing. There is no independent analysis by an expert or third party to support a calculation for manual cutting.

202All the Court has is the figure put forth by Mr. DeMerchant in the amount of $45,225,20. This amount was not agreed to by LTS, even though LTS’s proposed number is lower at $41,292.57. From the exchange of emails, the Court concludes that Mr. DeMerchant was satisfied with this figure, even though this figure was not formally approved by 407E.

203The Court agrees that LTS is deserving of an extra for manual cutting. The best figure that this Court can conclude is reasonable in the circumstances and is the amount put forth by Mr. DeMerchant. The Court allows an extra to LTS in the amount of $45,225.20.

E. Did LTS suffer damages due to the conduct of 407E and the amount, if any?

For loss of profit: $28,854.94, $7,973.28, $406,800.

204LTS claims loss of profit for work not performed due to the actions of 407E.

205The claim for loss of profit is categorized as follows:

(a) For grubbing in the amount of $28,854.94.

(b) For clearing $7,973.28.

206I will consider each separately.

Grubbing

207LTS asserts that it is entitled to grubbing not completed for the full term of the Subcontract. Ms. MacDonald testified that the amount of grubbing not done by LTS was 31.68 ha. due to 407E terminating the Subcontract.

208Ms. MacDonald took a percentage of 20% for loss of profit.

209The Quotation and Subcontract price of LTS for grubbing was $4030 per ha. with no indication what part of that figure is for labour, equipment, overhead and profit.

210Further, grubbing was a per unit price. LTS would be paid on a unit price for grubbing performed.

211There is no substantial contractual obligation that LTS would complete a specific amount of grubbing. Any grubbing performed would be paid per unit price. The full amount of the grubbing area was an estimate in the Subcontract.

212Mr. MacDonald’s evidence is that LTS was required to have the whole site to itself to complete its work. This Court gives no weight to this evidence. The Subcontract states that subcontractors will have to work alongside other subcontractors and workers on the site. Further, 407E had the authority to direct LTS to do work in certain areas, if required.³⁵

213Mr. MacDonald’s evidence is that LTS could not grub until the areas for grubbing were staked. 407E’s evidence, through Mr. Dean, Mr. DeMerchant and Mr. Coull, was that there were grubbing areas marked and areas that did not require marking for LTS to grub. They also uniformly testified that stakes could not be placed before the cutting of trees was done for to do so would mean that the stakes would be destroyed or moved during the tree cutting process. Once cut, stakes could be placed and according to Mr. Dean and Mr. Coull, there were staked areas.

214The question for the Court is, is there a loss of profit to LTS for work not performed, given that the payment was per unit and there was no guarantee on the volume of area for grubbing to be completed?

215The Court determines no.

216There were no specific volume areas that LTS was going to grub. It was a unit basis, as directed. LTS has not provided a term in the Subcontract that indicates that LTS contracted to grub a specific total area. Without this, the Court cannot now ascertain that LTS was contracted to grub a certain volume of area and 407E prevented LTS to grub that area and LTS lost profit from work which was certain from the terms of the Subcontract.

217Further, there is no evidence provided in the profit margin of LTS in their unit price for grubbing. LTS has not provided a basis, except for the testimony of Ms. MacDonald, that 20% is reasonable. This is contrary to the percentages agreed to in the Subcontract of 15% and 5%.

218The Court has found that 407E was within its rights to terminate the Subcontract due to LTS’s non-performance.

219Consequently, this Court fails to see factually or legally LTS’s claim for loss of profit for grubbing and does not allow the claim.

Tree Clearing

220LTS is making a claim for loss of profit for remaining tree cutting work.

221If this Court understands the claim, it is based on work that was outside the ROW that LTS was not permitted to perform. If that is the case, that work would have been an extra to the Subcontract and as such, it would be required to be approved by 407E with an agreement of price per the terms of the Subcontract. If no COR was agreed upon, there is no obligation for LTS to perform the work.

222If the work being claimed was within the ROW, it is part of the lump sum work for close cut clearing and there is no loss of profit claim.

223In the end, the Court is not certain of the factual basis for this claim of loss of profit for tree clearing.

224The trial evidence seems certain that LTS did little to no work in the months of August and September 2013. The contract was terminated towards the end of September 2013, the Notice of Termination was sent October 2, 2013.

225Given this factual matrix, the Court is not certain as to the work during this time period that LTS lost its alleged profit.

Merchantable Logs

226LTS claims that 407E prevented it from attending the site after September 18, 2013 to collect the wood or sell the wood.

227LTS’s claim is for 300 logging truckloads of logs and $1,200 per truckload for a total of $406,800 plus HST.

228Section 2.1 of the Subcontract included as the scope of work: “Merchantable wood should be collected for sale and the 407ECGP will direct any parties interested in the material to the Subcontractor.”

229There is no contention between LTS and 407E that under the Subcontract, LTS had the permission to collect merchantable wood for sale. Any unmerchantable wood would have to be chipped by LTS. This is confirmed in the Minutes of the Kick off meeting.

230While on site, LTS did sell some merchantable wood to Mr. John Palmer. His testimony was that he bought 3.5 truckloads of wood for $2,800. This translates to $800 per truck load.

231Mr. Palmer also testified that he did reattend at the site to see if there was any further wood he could purchase. He determined that there was not any of merchantable value for him to purchase and declined to purchase any further wood.

232From March to September 2013, LTS had the ability and opportunity to sale of merchantable wood. The only evidence heard on the actual purchase of such wood was from Mr. Palmer.

233Ms. MacDonald testified that she attended the site and took pictures of the site, which included some of the trees stacked on the ground. She also made notes of areas where the stockpiles areas were located. There was no evidence presented that took an accounting of the volume of number of trees. There was no evidence provided on the merchantable nature of the wood and whether the wood was in a condition that was able to sell and at what price.

234The only evidence the Court heard from a non-party is that of Mr. Palmer who testified that the wood he viewed was not of merchantable quality for him to purchase.

235Hence, the only testimony that the Court has evidence that wood was sold is that of to Mr. Palmer for at $2800 for $800 a load.

236On the evidence presented by LTS, the Court cannot make a finding on the balance of probabilities that:

(a) There was merchantable wood in a condition for sale.

(b) The quantity of the merchantable wood for sale.

237The Court heard evidence of 407E receiving call(s) for purchase of merchantable wood. These calls took place after the Subcontract ended.

238These calls, it appears, were not forwarded to LTS. Even if the calls were received, there is no evidence that the wood was of merchantable quality to sale and the value of such wood.

239The evidence does not persuade the Court that LTS suffered any loss from the sale of merchantable wood after the Subcontract was ended.

240407E further directs the Court to GC 3.14.04.04 that states: “The Subcontractor’s failure to provide the notice of Claim as required shall result in the waiver of any Claim and the loss of compensation to the Subcontractor in respect of such claim. However, if the Subcontractor provides the Contractor with an explanation for the delay in providing the notice of Claim, which the Contractor, in its sole discretion, an accept or reject for any reason…”

241There was no evidence presented that LTS made such a Claim for compensation of merchantable wood per the terms of the Subcontract.

242The Court finds that the claim for compensation for the sale of merchantable wood is not granted. The Court finds that on the balance of probabilities, LTS has failed to prove that there was merchantable wood for sale, the quantity of that wood and that the marketable price of such wood is $1200 per load.

243In addition, the Court finds that GC 3.14.04 is applicable and that LTS has waived any right to such a claim.

Loss of profits of $6,669.26 for Clearway work

244LTS is claiming loss of profit for a possible contract with Clearway Construction Inc. (Clearway). This is found in a purchase Order dated October 2, 2014.³⁶ The purchase order is for tree removal in the amount of $6,800.

245Senior Contracts Administrator Paul Tibbett in an email dated October 22, 2014 indicated that Lumberjacks is no longer an approved contractor for 407E project work.

246LTS was not an approved contractor of 407E for work on the Project and as such, 407E did not approve LTS as an approved subcontractor per the Contract between Clearway and 407E.

247Clearway cancelled the purchase order with LTS and used another subcontractor at a lower price.

248LTS claims that 407E interfered with it obtaining a contract to do work with Clearway and as such induced a breach of contract. LTS is claiming the amount of the profit from the purchase order being $5902 plus HST for a total of $6,669.26.

249The Ontario Court of Appeal in Correia v. Canac Kitchens, 2008 ONCA 506, 91 O.R. (3d) 353, set out the elements of the tort of inducing breach of contract as:

99The Lords defined the elements of the tort of inducing breach of contract as follows: (1) the defendant had knowledge of the contract between the plaintiff and the third party; (2) the defendant's conduct was intended to cause the third party to breach the contract; (3) the defendant's conduct caused the third party to breach the contract; (4) the plaintiff suffered damage as a result of the breach (see OBG, at paras. 39-44 (Hoffman L.)). The Lords confined the tort to cases where the defendant actually knew that its conduct would cause the third party to breach (it is not enough that the defendant ought reasonably to have known that its conduct would cause the third party to breach); the defendant must have intended the breach (it is not enough that a breach was merely a foreseeable consequence of the defendant's conduct); and there must be an actual breach (it is not enough for the conduct to merely hinder full performance of the contract).

250The substantive element of the tort is that the aggrieved party had a contract with the third party and the offending party’s actions caused the aggrieved party to breach the contract.

251From the evidence, LTS had a purchase order from Clearway. There is no documentary evidence that the purchase order was accepted or that there was a contract between Clearway and LTS. There was no contract entered into between Clearway and LTS. Clearway then withdrew the purchase order.

252Clearway revised its quotation to 407E at a lower price and with this lower price, Clearway obtained the contract from 407E to proceed with the work.

253Thus, at the time of the purchase order, there was no contract between Clearway and LTS for the work described in the purchase order. Also, there was no contract between 407E and Clearway.

254Consequently, the question becomes what the contract is and what is the breach of contract that existed between LTS and Clearway.

255From the evidence presented, there was no contract between LTS and Clearway and there was no contract between 407E and Clearway for the work described in the purchaser order.

256The Court has to conclude therefore that the tort of inducement of breach of contract is not applicable on the evidence presented.

Loss of profits of $29,832 for work with Coffey

257LTS is claiming damages from 407E for inducing breach of contract and unlawful interference in contractual relations.

258The economic tort of unlawful interference was described in Correia as follows:

100The elements of the tort of causing loss by unlawful means are: (1) wrongful interference by the defendant with the actions of a third party in which the plaintiff has an economic interest; (2) an intention by the defendant to cause loss to the plaintiff: see OBG, at para. 47 (Hoffman L.). Again, the intentionality of the defendant's conduct is critical: it is not enough that the loss was a foreseeable consequence of the defendant's conduct; to be actionable under this tort, the loss must have been the intended result. Furthermore, intentional conduct that causes loss but is not unlawful is not actionable. That is considered permissible competitive commercial behaviour.

101We note that the requirement for intentionality may be stricter for these economic torts than for the tort of intentional infliction of mental distress, where, at least when a person is accused of criminal conduct, the foreseeability of the inevitable consequences of reckless conduct can amount to intent. The difference of approach is justified in this case. The two economic torts are strictly limited in their purpose and effect in the commercial world, where much competitive activity is not only legal but is encouraged as part of competitive behaviour that benefits the economy. In contrast, intentional infliction of mental distress is a personal tort that regulates improper activity that causes mental suffering, which is never socially beneficial. What degree of intent is required may depend on the nature of the conduct that causes the mental distress. As held in Rahemtulla, when a person is accused of criminal activity, the potential for mental distress consequences is clearly foreseeable. [page386]

102The question of what amounts to "unlawful means" is the one that has caused the most difficulty for judges and scholars. The majority of the Lords agreed with the following definition found at para. 51 of Lord Hoffman's reasons:

Unlawful means therefore consists of acts intended to cause loss to the claimant by interfering with the freedom of a third party in a way which is unlawful as against that third party and which is intended to cause loss to the claimant. It does not in my opinion include acts which may be unlawful against a third party but which do not affect his freedom to deal with the claimant.

103Lord Hoffman summarized his definition of unlawful means as acts against a third party that are actionable by that third party, or would have been actionable if the third party had suffered a loss. This excludes criminal conduct that is not directed at the third party and is not otherwise actionable by that party. In contrast, Lord Nicholls of Birkenhead views the breadth of conduct under the rubric of "unlawful means" as encompassing any conduct that is deliberately intended to harm the plaintiff and in breach of a legal or equitable obligation under either civil or criminal law. He views the true rationale of the tort as providing a remedy for intentional economic harm "caused by unacceptable means", which includes all means that would violate an obligation under the law: para. 153.

259The Court of Appeal in Grand Financial Management Inc. v. Solemio Transportation Inc., 2016 ONCA 175, 395 D.L.R. (4th) 529, at paras. 62-68, reviewed the three elements of the economic tort of unlawful interference and reiterated that the economic tort of unlawful interference should be narrowly construed and that the second element of unlawful interference is based on the defendant’s unlawful act against a third party.

260The evidence presented by LTS is that it had received a purchase order to perform tree cutting services for Coffey Geotechnics. The purchase order was to close cut clear trees in the area of bore holes. Coffey carried LTS as a subcontractor to perform the tree cutting work. The contract that Coffey had to do its work was with Ferrovial Agroman Canada Inc. and Dufferin Construction, carrying on business together known as Blackbird Construction General Partnerships Inc. (Blackbird). This contract did not involve 407E.

261Coffey was advised by Mr. Medel that LTS could not be used as a subcontractor on the Project. Coffey was told of this fact after it provided a purchase order to LTS and LTS spent time and effort prequalifying along with attending an orientation meeting. LTS was ready to proceed.

262As a result of that direction, Coffey rescinded the purchase order with LTS.

263LTS implicitly asserts that Mr. Medel was acting on behalf of the 407E when it directed Coffey that LTS was not an acceptable subcontractor. Blackbird is not named as a defendant in this action.

264Neither LTS nor 407E called a representative of Coffey as a witness.

265The difficulty the Court has with the application of either economic tort is that an element of both economic torts must be a contract, and the conduct of 407E must have been unlawful or illegal and must have caused the third party to breach its contract.

266There is no evidence submitted by Coffey that it had a contract with LTS. Mr. MacDonald testified that LTS was advised to be ready to start the work but was later advised that they would not be chosen as the subcontractor since Coffey used another subcontractor at a lower price.

267Second, there is no evidence that the action of Mr. Medel advising that LTS was not an approved subcontractor on the Project was unlawful or illegal in any way against Coffey or that is actionable by Coffey against 407E.

268Again, on the evidence presented, the Court does not find that LTS has satisfied the elements required to sustain a claim for inducement of breach of contract or unlawful interference with economic relations.

F. Does LTS have a claim based on Quantum Meruit

269LTS has put forth a claim for quantum merit. Quantum meruit is a restitutionary claim.

270Quantum meruit is a principle used to compensate a person for payment of value of goods or services where there is a contractual relationship without a contract that does not specify a value for the goods or services supplied or where a contract has been partially fulfilled and no value for the goods or services supplied has been agreed upon. It is principle that purports fairness. In the construction realm, quantum meruit can be used for contractors to obtain payment for work performed, such as extras, which are not part of a contract: see 2002759 Ontario Ltd et al. v. Koropeski et al., 2021 ONSC 7873, at paras. 74-78.

271Justice Cronk in Consulate Ventures Inc. v. Amico Contracting & Engineering (1992) Inc., 2007 ONCA 324; 282 D.L.R. (4th) 697, at paras. 93-95 stated:

93Consulate argues that the trial judge erred in her analysis of this claim by applying the wrong legal test and by failing to consider the extensive evidence relied upon by Consulate to establish its quantum meruit claim. I agree with these submissions.

94The trial judge stated at para. 41 of her reasons:

I keep in mind that claims based on quantum meruit have an underlying presumption of an entitlement to be compensated. In other words, I must find a contractual relationship. I cannot make such a finding. [Emphasis added.]

95With respect, this misstates the test for establishing entitlement to restitutionary relief based on quantum meruit. Such a claim is not dependant on the existence of a valid contract. Rather, it is a discrete cause of action, separate and apart from claims grounded in contract or tort, which contemplates a remedy for unjust enrichment or unjust benefit: see Beatrice C. Deglman v. The Guaranty Trust Company of Canada (Administrator of the Estate of Laura Constantineau Brunet, Deceased), 1954 2 (SCC), [1954] S.C.R. 725 at 734-35.

272In the factual matrix of this matter, there is a Contract that sets out compensation for work performed pursuant to the terms of the Subcontract. There also is a procedure agreed upon for the request and approval of work and extras that are performed and are not part of the Subcontract scope of work.

273Given that there is an existing Subcontract and that the Court has determined the scope of the work pursuant to the Subcontract for close cut clearing is all trees within the ROW, LTS’s claim based on quantum meruit is not applicable.

274There is no extra claim for trees cut outside the yellow lines. The Subcontract deals with all trees cut from ROW to ROW with a lump sum price.

275Consequently, the Court finds that the principle of quantum meruit as claimed by LTS has no foundation.

Honest Performance

276LTS have further claimed damages against 407E for breach of the duty of honest performance.

277The duty of honest performance has been explained in the leading cases from the Supreme Court of Canada in Bhasin, at paras. 73-74 and C.M. Callow Inc. v. Zollinger, 2020 SCC 45, [2020] 3 S.C.R. 908 57, at paras. 130-134.

278In Callow, the Supreme Court of Canada surmised:

130As a universally applicable minimum standard, all contracts must be performed honestly. Contracting parties may therefore not lie to, or otherwise knowingly mislead, each other about matters directly linked to performance (Bhasin, at paras. 73‑74). If a plaintiff suffers loss in reliance on its counterparty’s misleading conduct, the duty of honest performance serves to make the plaintiff whole. The duty of honest performance does not, however, “impose a duty of loyalty or of disclosure or require a party to forego advantages flowing from the contract” (Bhasin, at para. 73).

131The dividing line between (1) actively misleading conduct, and (2) permissible non‑disclosure, is the central issue in this appeal. As that line has been clearly demarcated by cases addressing misrepresentation in other contexts, it is in my view worth affirming here that the same settled principles apply to the duty of honest performance. The duty of honest performance is, after all, broadly comparable to the doctrine of fraudulent misrepresentation, although it applies (unlike misrepresentation) to representations made after contract formation (B. MacDougall, Misrepresentation (2016), at pp. 63‑64). It follows that those representations sufficient to ground a claim for misrepresentation are analogous to the representations that will support a claim based on the duty of honest performance.

132The general rule, applicable to contracts other than those requiring utmost good faith, is that contracting parties have no duty to disclose material information (Bhasin, at paras. 73 and 86). Mere silence therefore cannot be considered actively misleading conduct (Alevizos v. Nirula, 2003 MBCA 148, 180 Man. R. (2d) 186, at para. 19). In some cases, however, silence on a particular topic is misleading in light of what has been said (Xerex Exploration Ltd. v. Petro‑Canada, 2005 ABCA 224, 47 Alta. L.R. (4th) 6, at para. 56, citing Opron Construction Co. v. Alberta (1994), 1994 18362 (AB KB), 151 A.R. 241 (Q.B.)). Again, no wheels need re‑inventing here. There is, in the context of misrepresentation, “a rich law accepting that sometimes silence or half‑truths amount to a statement” (MacDougall, at p. 67; see also A. Swan, “The Obligation to Perform in Good Faith: Comment on Bhasin v. Hrynew” (2015), 56 Can. Bus. L.J. 395, at p. 402). A contracting party therefore may not create a misleading picture about its contractual performance by relying on half‑truths or partial disclosure (Peek v. Gurney (1873), L.R. 6 H.L. 377; Alevizos, at paras. 24-25; Xerex, at paras. 56-57). And contracting parties are required to correct representations that are subsequently rendered false, or which the representor later discovers were erroneous (Xerex, at para. 58; MacDougall, at pp. 118-19).

279LTS contends that 407E breached its duty of honest performance, as stated in paragraphs 377 and 388 of its closing submissions:

407 breached its duty of honest performance in directing LTS to (i) perform all close cut clearing for the price of close cut clearing 25.3 hectares, (ii) cut trees after April 20, 2013, (iii) chip or remove trees 150 mm (6 inches) or more in diameter and (iv) perform close cut clearing, grubbing and manual cutting, and bring in additional equipment, with no intention to pay for it.
407’s failure to disclose its intention to change the terms of the LOI, by requiring LTS to cut all trees for the price of cutting 25.3 ha and by switching the GC on the CD with a different set, was also a breach of its duty of honest performance.

280The Court is not persuaded by the allegations of LTS. The evidence presented and factual findings made by the Court show that:

a. The Subcontract mandates that LTS is to clear all trees and vegetation within the ROW. There was no misleading picture nor was there half truths or partial disclosure. LTS was to conduct its own due diligence on the volume of the work required in the ROW for close cut clearing. Grubbing was by unit price. 407E had no input on the methodology LTS used for calculating their price including their price per hectare.

b. 407E agreed that there was extra work to be paid, and this is shown by the terms of the Subcontract and Change Order Requests put forth by LTS. Many of these Change Requests 407E assisted in fine tuning for LTS. The amount could not be agreed upon. The calculation of LTS were ever changing.

c. During the procurement process, LTS did not ask any question, nor did they do any investigation on the complexity of the work required nor attend the site to perform and investigation of the density of the trees and vegetation.

281On the evidence presented, the Court does not find that 407E breached their duty of honest performance. There is no evidence presented that indicates intentional misleading conduct or some form of misrepresentation.

282LTS’s claim based on breach of duty of honest performance is rejected.

Punitive Damages

283LTS claims punitive, aggravated and exemplary damages in the sum of one million dollars.

284In its Closing Submissions, LTS concentrated only on an award for punitive damages.

285Punitive damages are available and granted when the Court finds the conduct of a party deserves condemnation and punishment: Whiten v. Pilot Insurance Co., 2002 SCC 18, [2002] 1 S.C.R. 595, at para. 36; Canex Investment Corporation v. 0799701 B.C. Ltd., 2020 BCCA 231, at paras. 104-108; Honda Canada Inc. v. Keays, 2008 SCC 39, [2008] 2 S.C.R. 362, at paras. 68-69.³⁷

286The Supreme Court of Canada in Honda Canada Inc.categorized punitive damage awards as follows:

68Even if I were to give deference to the trial judge on this issue, this Court has stated that punitive damages should “receive the most careful consideration and the discretion to award them should be most cautiously exercised” (Vorvis, at pp. 1104-5). Courts should only resort to punitive damages in exceptional cases (Whiten, at para. 69). The independent actionable wrong requirement is but one of many factors that merit careful consideration by the courts in allocating punitive damages. Another important thing to be considered is that conduct meriting punitive damages awards must be “harsh, vindictive, reprehensible and malicious”, as well as “extreme in its nature and such that by any reasonable standard it is deserving of full condemnation and punishment” (Vorvis, at p. 1108). The facts of this case demonstrate no such conduct. Creating a disability program such as the one under review in this case cannot be equated with a malicious intent to discriminate against persons with a particular affliction.

287In determining whether an award of punitive damages should be granted, the Court is to only do so in exceptional cases. A careful cautious consideration must be exercised. The conduct “must be “harsh, vindictive, reprehensible and malicious””: Honda Canada Inc., at para. 68.

288LTS submits that the conduct of 407E was deceitful, based on misrepresentation and a breach of the duty of honest performance of the Subcontract.³⁸

289The Court fails to find that the conduct of 407E was in anyway harsh, vindictive, reprehensible, and malicious. The factual foundation put forth by LTS assumes that the Court has found that 407E was deceitful, misrepresenting and breached the duty of honest performance. The Court has not found any conduct.

290407E, at the beginning, assisted LTS. 407E suggested an invoice for mobilization and paid the invoice quickly to assist LTS with cash flow. As the Project progressed, 407E expedited payments to LTS once proper Payment Applications were submitted. In addition, they assisted LTS in their payment applications to conform with the invoicing procedures to assist in receiving payment without delay, and assisted LTS in submitting CORs. Further, 407E agreed to CORs put forth by LTS that LTS later refused to sign.

291The evidence presented, in the Court’s view, does not amount to the type of conduct that is required for the Court to find that there are exceptional circumstances that demand the Court to make an award of punitive damages to punish 407E.

292Consequently, this Court declines to make an award of punitive damages.

CONCLUSION

293The Court finds that LTS is owed by 407E the following:

Contract work – $67,451,41;
Holdback – $44,407.34;
Inv. 287 – $7860.69;
Inv. 284 – $5,548.69;
Inv. 288 – $5,779.92;
Inv. 294 and 295 – $614.64; and
Acceleration – $45,775.84

for a total of $177,437.53.

G. Is 407E entitled to damages and did they suffer damages due to the performance and conduct of LTS?

294407E has put forth a counterclaim in the amount of $2,056,224.06 plus costs for the financial guarantee bond paid into Court. 407E contends that, due to the non performance of the Subcontract and the improper claim for lien of LTS, 407E has suffered damages.

295The breakdown of the 407E claim for damages for non performance is:

Replacement Sub-subcontractor	Area of Work	Quantum
SFB	Segment A-2	$ 751,450.00
Eagleson Ontario Limited	Segments A-1, A-3, A-4, and A-5	$ 725,580.55
TBG	Section 3	$ 57,878.00
AJ Forestry Inc.	Section 2	$ 6,667.00
Metric	Segments A-2 and B-3	$ 149,219.31
Valleau Construction	Section 3	$ 45,406.23
Brennan	Segment A-3	$ 7,746.00
B. Gottardo Construction Ltd.	Segment A-1	$ 62,698.36
BOT Civil Inc.	Segments B-1, B-2	$ 201,010.77
Boardwalk Excavating & Contracting	Segment B-3	$ 38,848.84
R&M Construction	N/A	$ 0.00
Hard-Co	Sections 1 and 2	$ 9,719.00
TOTAL:		$2,056,224.06

296For costs incurred to bond off the claim for liens of LTS, 407E is claiming the sum of $224,000 plus HST up to March 2023. The costs of the bond is $22,400 plus HST per year.

297The witnesses for 407E and particularly Mr. DeMerchant, Mr. Dean, Mr. Coull, Mr. Medel and Mr. Beltran, testified that due to the non-performance of LTS and including that non-performance after July 2013, 407E was forced to retrain the services of replacement workers to complete that contracted work of LTS.

298It is the testimony of these witnesses that the services of other subcontractors were used as of June 2013. Months before, 407E provided LTS with the Notice of Default pursuant to the terms of the Subcontract.

299Mr. Coull in his affidavit³⁹ confirmed that 407E was speaking to other subcontractors in June 2013. Mr. Coull’s email to Mr. Hem dated June 12, 2013 states:

Hope I’m not over stepping any responsibilities on this. In seeking with Hard-Co last week they offered possibility of grinding if we needed it. I did ask them not to communicate this to anyone else but our group. I know we have a contract with Lumberjacks however maybe an option if the need presents itself.⁴⁰

300The affidavit of Justin DeMerchant dated March 22, 2023⁴¹ describes the replacement works retained to finish LTS’s work due to its non performance. 407E did not present evidence directly from the replacement workers except for their specific invoices as outlined by Mr. DeMerchant. None of the companies that supplied invoices to support the set off claim and unreclaim of 407E presented any evidence, except for the invoices, to explain the work they did and where on the project the work was performed. All the invoices were admitted as business records.

301The evidence of Mr. Dean, Mr. Beltran, Mr. Medel and Mr. Beltran also explain the need for replacement work and the work they performed.

302The replacement workers started in early October 2013 and continued into 2017. There was no evidence presented to explain why replacement workers were performing alleged work of LTS in 2015, 2016 or 2017, years after the Subcontract was terminated.

303The work performed includes grubbing. LTS priced grubbing on a unit price. If LTS did not grub, they did not charge or get paid for grubbing. On the evidence provided, the Court is having difficulty understanding the loss that 407E suffered to grant damages for replacement workers that did grubbing work. The evidence does not break down the costs to have paid LTS to grub in comparison to the replacement workers. Would the cost to replacement workers have been more or less than 407E would have had to pay LTS to perform the grubbing work? There is no evidence presented to answer that question.

304It appears to the Court that 407E provided all invoices that dealt with any type of work that was similar to the work contracted by LTS. This affects the reliability of the invoices provided in support of the damage claim of 407E against LTS.

305The Court is satisfied that 407E has a claim for set off and damages for failure to complete the Subcontract against LTS based on the terms of the Subcontract per GC 4.08.02 and GC 8.02.02.11.01 and at law for failing to complete the terms of work in the Subcontract. I am also satisfied that 407E suffered damages for the payment of replacement workers.

306The question then is, what is the quantum of damages that 407E suffered?

H. If 407E is entitled to damages, what is the quantum?

307The Court is persuaded that 407E is entitled to damages for LTS’s failure to perform and complete the Subcontract.

308The concern, as stated above, is proving that the damages claimed are reasonable and pertain to the work that LTS failed to perform and the quantification of the damages.

309The Court has reviewed the invoices presented by 407E. From a review of the invoices, the concern expressed above became evident.

310The majority of the invoices involve grubbing. Again, there was no breakdown of the specific costs incurred for grubbing to relate those costs to the costs for grubbing paid to LTS on a unit price basis.

311Moreover, charges in the invoices that 407E are claiming against LTS appear not be the responsibility of LTS to perform and the invoices to not delineate the costs for close cut clearing as opposed to the costs for grubbing. There is evidence that on the tree clearing and chipping work, much appears to be in the ROW. However, not all the work requested is clear that the work was performed in the ROW. Examples include:

Charge for removal of a tower. How is this LTS’s work?
Charges for wood chipping in areas that do not seem to be located in the ROW.
Charges for mobilization. Are these costs only for work pertaining to LTS’s failure to complete the Subcontract? There is no evidence to explain this.
Charges for clearing for temporary bridge access and pond. How is this LTS’s work?
Charges for clearing in areas that do not appear to be in the ROW and there is no explanatory evidence specifying that the work charged is in the ROW and that LTS is responsible.
Charges for work before the Notice of Default was sent and the Notice of Termination was sent.
The installation of silt fences, providing seed and topsoil. How is this LTS’s work?
Charges for water control and the pumping of water.
Charges for pipe and culverts.

312The Court is of the view that 407E cannot charge LTS for work it alleges it paid for before 407E complied with the Subcontract where LTS is given notice of Default and LTS is provided with 5 days to cure any default or provide a plan to do so. 407E did not provide Notice of Default until September 20, 2013, and did not terminate the Subcontract until October 2, 2013. To adhere to the terms of the Subcontract, the Court is of the view that 407E cannot set off charges or claim damages against LTS until the Subcontract has been complied with. This means giving notice of default and LTS is given the opportunity to cure any default before the Subcontract is terminated.

313The consequence is that any charges or set off claims 407E is claiming against LTS before October 2, 2013 will not be considered.

314The further concerns already stated are:

(a) The claims of 407E is that invoices provided are for work that LTS is clearly not responsible.

(b) The work that concerns clearing is billed with grubbing work. There is no calculation reported that takes into consideration the costs 407E would have incurred if LTS performed the grubbing work.

315It is not the Court’s onus to glean through all the invoices and decipher the claims of 407E through the invoices, especially when there are gaps in the evidence for the Court to do so. The onus is on 407E to prove their damages: TMS Lighting Ltd. v. KJS Transport Inc., 2014 ONCA 1, at para. 61.

316The Court is cognizant that it has an obligation to do its best in assessing damages, but the assessment cannot be fanciful with a figure that is not supported by the evidence: TMU Lighting; Schindler Elevator Corporation v. Walsh Construction Company of Canada, 2021 ONSC 283, at para. 337. At the end of the day, the Court has discretion in awarding damages that is based on the evidence provided.

317From the Court’s assessment and findings, the Court is satisfied that LTS did not complete the work it was contracted to do. The Court is satisfied that 407E incurred costs to complete the work of LTS. The issue is what is a reasonable amount that LTS is responsible for in damages.

318407E is seeking $2,056,224.06.

319During submission, when questioned by the Court on the concern of the grubbing charges, 407E conceded if there is a concern about the amount requested, it could be reduced by $500,000.

320The Court does not accept this suggestion as a reasonable way to resolve the concern of the claim of 407E.

321Given the failure of 407E to provide the necessary evidence to specify costs directly attributable to LTS but acknowledging that there are costs involved for which LTS is responsible for failing to cut and clean within the ROW and to clear all vegetation and chip all within the ROW, the Court fixes the quantum at 20% of the amount sought by 407E, $411,244.81. The Court comes to the view that this figure is reasonable in the circumstances. As evidenced from the invoices, there were costs incurred to complete the work of LTS.

I. Is the claim for lien of LTS timely?

322LTS filed two claims for lien. The first lien was an unregistered lien. The second lien was registered.

323The first lien was delivered on October 17, 2013. The second lien was registered in title on November 22, 2013.

324The claims for lien have their last day of work as being September 4, 2013.

325There is no contest that the first lien was timely.

326On the pure calculation of 45 days from the last day of work per s. 31 of the Act,⁴² the second claim for lien is out of time.

327Nonetheless, the first claim for lien is timely. The bond was utilized to vacate the first claim for lien, and the bond was paid into Court on the first claim for lien. The issue of timeliness of the second claim for lien is not pertinent but any costs incurred will be taken into consideration when the Court receives submissions on costs.

J. Did 407E suffer damages due to the claims for lien and if so, to what amount?

328407E is claiming damages for the costs of the financial guarantee bond that was paid into Court.

329407E claims for the costs of the guarantee bond over the years it has remained in Court to the benefit of the two actions.

330407E has conceded that there may be an amount that the Court determines is owed to LTS and was properly lienable. However, the amount of the claims for lien of LTS, 407E contends, greatly exceed that amount the Court may find appropriately lienable.

331407E argues that the amount of $224,000 should be reduced to $200,000 plus HST taking into consideration the lesser amount that the Court may have found to be owing to LTS by 407E.

332LTS provided minimal submissions on this claim.

333Section 35 of the Act reads:

Exaggerated, false claims

Liability

35 (1) In addition to any other ground on which the person may be liable, any person who preserves a claim for lien or who gives written notice of a lien in the following circumstances is liable to any person who suffers damages as a result:

The person knows or ought to know that the amount of the lien has been wilfully exaggerated.
The person knows or ought to know that he or she does not have a lien. 2017, c. 24, s. 30 (2).

Reduction of lien amount

(2) In the circumstances described in paragraph 1 of subsection (1), the court may, on motion, order that the lien amount be reduced by the exaggerated portion, as determined in accordance with section 17, if it finds that the person has acted in good faith.

334407E’s claims that it has suffered damages to bond off the claim for liens of the plaintiff. These costs are damages for the cost of the bond which is charged on an annual basis. 407E also is not claiming the costs for the bond after 2023.

335The Court did not receive extensive submissions from the parties on whether damages should be awarded and that the plaintiff knew or ought to have known that the amount of the lien was wilfully exaggerated. The Court did not receive case law from either of the parties.

336Subsequently, the Court is providing both parties with the opportunity to provide written submissions within the costs submissions on whether the Court should award damages per section 35 based on the evidence presented at trial.

337A further reason the Court is allowing this issue to be considered with the written submissions on costs is because the Court’s determination on the validity of the claims for lien and the amount of the claims for lien is just being released to the parties with these reasons.

338It would be unfair for the Court to make a determination on damages without the parties being provided with an opportunity to provide written submissions based on the Court’s findings and the lack of caselaw and argument provided.

CONCLUSION

339The Court finds that LTS is to pay 407E the amount of $411,244.81 plus any damages determined under s. 35 of the Act.

DISPOSITION

340The Court makes the following findings and orders:

(a) The first claim for lien is timely;

(b) The second claim for lien was not preserved in time per s. 31 of the Act ;

(d) LTS shall pay to 407E the sum of $411,244.81 plus any amount granted for damages per s. 35 of the Act.

(e) The claims for lien of the plaintiff are discharged.

(f) The guarantee bond paid into Court by 407E per the Order of Associate Judge Wiebe dated November 28, 2013 is ordered returned to 407E for cancellation.

COSTS

341If the parties cannot agree on costs or pre- and post-judgment interest or damages per section 35 of the Act, LTS is to serve and file its submissions for costs, interests and damages to 407E per s. 35 within twenty one (21) days from the date of this decision, and 407E will have twenty one (21) days thereafter to serve and file its submissions. LTS will then have fifteen (15) days thereafter to serve and file any reply submissions. 407E will have fifteen (15) days thereafter to reply to any submission of the plaintiff on section 35 damages. The submissions are to be no more than 10 pages, and the reply submissions are to be no more than 3 pages. All submissions to be double-spaced, 12-point font, exclusive of any cost outline and offers to settle. Any case law should be hyperlinked in the submissions. Submissions are to be filed with the Court. If no submissions are received within the time set out herein, an order will be made that there will be no costs.

Justice P. Sutherland

Released: March 4, 2026

Footnotes

Closing Submissions of LTS, at p. 3-A15219.
It is agreed that 407E paid this amount inclusive of HST with a holdback of $36,009.41 on account of the three invoices paid.
Exhibit 36- B-1-9911
Exhibit 25-A15592-15599; Exhibit 5 to the affidavit of Amanda MacDonald dated January 12, 2023.
Exhibit 36-B-1-9942.
Exhibit 36-B-1-9959.
Exhibit 36-B-1-9971.
Exhibit 36-B-1-9973.
Exhibit 36-B-1-9976.
Affidavit of Justin DeMerchant dated March 22, 2023.
See the affidavit of Amanda MacDonald dated January 12, 2023.
Exhibit 36-B-1-10474-B-1-10477.
Exhibit 36-B-1-10478.
Exhibit 131 on Amanda MacDonald’s affidavit dated January 12, 2013.
Being invoices numbers 233, 235, 252, 253, 254, 263, 264, and 265.
Exhibit 140 of the affidavit of Amanda MacDonald dated January 12, 2013 - A3490.
Exhibit 137 of the affidavit of Amanda MacDonald dated January 12, 2013.
Exhibit 141 of the affidavit of Amanda MacDonald dated January 12, 2013.
Exhibit 33 of the affidavit of Justin MacDonald dated January 10, 2013 - item 33-A11626
Exhibit 72-B-1-505.
A2008.
A2024.
B-1-10170.
B-1-10168.
Exhibit 77-B-1-2548-B-1-2551.
Exhibit 36-B-1-10103.
Exhibit 36- B-1-10130.
Exhibit 36-B-1-10137.
Exhibit 36-B-1-10140-46.
Exhibit 154 in A11566.
Exhibit 36-B-1-10159-item 44.
Exhibit 36-B-1-10166 - affidavit of Justin DeMerchant dated March 22, 2023 - item 44.
GC 7.01.03.09 and GC 3.03.
Ex 24-A14546.
Whiten v. Pilot Insurance Co, 2002 SCC 18, at para. 36; Canex Investment Corporation v. 0799701 B.C. Ltd., 2020 BCCA 231 at paras. 104-108; Honda Canada Inc. v. Keays 2008 SCC 39, at paras 68-69.
Closing Submissions of LTS paragraphs 838-839.
Exhibit 55.
Exhibit 55-B-1-2016.
Exhibit 36
There is no dispute that the provision of the Construction Act applies as set out in the transition provisions of the Act, namely s. 87.3.
This figure is found at Schedule 1 of the plaintiff’s closing submissions.
Schedule 3 to the Closing Submissions of LTS-A15373 and Exhibit 48-A11564.