Date: 20001218
Docket: T-1420-96
BETWEEN:
SUN CONSTRUCTION COMPANY LIMITED
Plaintiff
- and -
HER MAJESTY THE QUEEN
Defendant
REASONS FOR JUDGMENT
DAWSON J.
In July of 1995, Sun Construction Company Limited ("Sun") submitted a tender to Public Works and Government Services Canada ("Public Works") by which it offered to Her Majesty the Queen in Right of Canada to furnish all plant, labour, equipment, hardware and materials for the construction of approach improvements to the public wharf at Hopedale, in the Torngat Mountains District of Labrador ("the project"). Sun"s tender was accepted and contract documents were duly executed. Thereafter, work was done by the plaintiff, the project was considered completed and payment was made by the defendant to the plaintiff. This claim puts in issue the sufficiency of that payment.
In material part, the contract between the parties contemplated a unit price arrangement by which payment would be determined by multiplying an agreed price by the number of units of measurement of each class of material required and installed under the contract. Sun asserts that it was paid for insufficient quantities of material provided under the contract, and sues alleging a failure to pay in accordance with the contract. Sun also pleads quantum meruit.
THE FACTS
The individual within Public Works with primary responsibility for the project was Bernard Jacobs, a civil engineer. Mr. Jacobs testified at trial that he developed the plans and specifications for the project. Those plans and specifications described the project to consist of the construction of a new rock and gravel filled storage area with filter and armour stone protection, and the removal, storage and reinstallation of existing filter and armour stone protection on the existing wharf approach (altogether referred to as "the work" or "the original work"). The specifications stipulated criteria for the rock and gravel fill, filter stone and armour stone to be used in the project.
Erosion from wave action easily erodes rock and gravel fill. Therefore filter stone is put on top of the rock and gravel fill to kill wave energy and thus protect the rock and gravel fill. Where significant wave action or ice is expected, armour stone is in turn placed on top of the filter stone. Filter stones were required by the plans and specifications to weigh between 350 and 1,000 kilograms. Armour stone was required to be evenly divided between stones weighing in the range of 3 and 4 tonnes and stones weighing in the range of 4 to 5 tonnes.
Each tenderer was required to tender on four classes of labour, plant or material. The first class was mobilization and demobilization for the project, in a remote area of Labrador, where a fixed price was to be specified. The remaining three classes were in respect of the rock and gravel fill, filter stone and armour stone where a unit price was to be specified for each class. The unit price was to be in relation to cubic metres of each class of material to be provided and installed.
The tender package provided to potential tenderers included a drawing prepared at Mr. Jacobs" direction, reflecting his design of the work, entitled "Site Plan & Sections". The drawing depicted, among other things, a partial section of the work as it was to be built.
Documents in the tender package stated that it was estimated that 2,100 cubic metres of rock and gravel fill, and, respectively, 450 and 600 cubic metres of filter and armour stone would be required to complete the work.
Those quantities were estimated by Mr. Jacobs. To reach that estimate he obtained and reviewed data from a Sounding and Topographic Survey of the Hopedale wharf and existing approach. This survey had been carried out in 1988 ("1988 survey") and measured elevations and soundings in metres of an area including that where the work was to be constructed. Elevations are measurements of the height of surfaces on land, while soundings ascertain the depth of water.
As part of the process of estimating the required amounts of material, Mr. Jacobs drew onto the 1988 survey a base line, essentially parallel to an existing pipeline and perpendicular to the existing wharf face. He then took a number of stations along the base line, generally at 5 metre intervals, extending through the area where the work was to be constructed. Cross-sections, perpendicular to the base line and parallel to the wharf face, were then drawn at each station. Mr. Jacobs then calculated the area of each cross-section within the area of the proposed work using the 1988 survey data to establish the pre-work bottom profile and existing elevations and using the contract plans and specifications to establish the contours to be achieved after completion of the work. Once the area of each cross-section was established Mr. Jacobs used a process referred to as an "Average End Area Calculation" to estimate the quantities of rock and gravel, filter stone and armour stone which would be required to complete the project as described in the plans and specifications. Essentially this was a calculation of the volume of the materials required to bring the existing soundings and elevations to those required by the plans and specifications.
On the basis of the estimate prepared by Mr. Jacobs as to the quantities of materials required, and including an allowance on account of mobilization and demobilization costs, Mr. Jacobs estimated the cost of the project to be $145,000. This information was provided to the government department which had requested the work to give it an estimate of the cost of the project.
In response to the request for tenders, three tenders were submitted, ranging in bid amounts from Sun"s bid of $151,000 to a bid of $158,720 to a bid of $211,000. Sun"s tender for each class of labour, plant or material was:
| Class of Labour Plant or Material |
Unit of Measurement |
Price Per Unit |
Estimated Total Price |
| Mobilization and Demobilization |
Fixed Price |
$25,000 |
|
| Rock and Gravel Fill |
m3 |
$20.00 |
$42,000 |
| Filter Stone |
m3 |
$80.00 |
$36,000 |
| Armour Stone |
m3 |
$80.00 |
$48,000 $151,000 |
Sun"s estimated total price for each category of rock was simply the product of multiplying Sun"s tendered unit price by the quantities estimated by Mr. Jacobs.
Sun was advised that its tender was successful by an award letter dated August 7, 1995. The letter also advised that Mr. Jacobs was to be the project manager and that he was the person "specifically authorized by the Engineer to perform, on his/her behalf, any of his/her functions under the contract". The award letter also enclosed two sets of contract documents for execution. The contract required that the work was to be completed by October 16, 1995.
Sun in due course arranged for a loader, excavator and two tandem trucks equipped with rock boxes to be shipped by water to the job site and work began on or about August 29, 1995. Sun"s superintendent on the job site was Mr. Kevin Melvin. The owner"s representative on the site, referred to as the Inspector, was Mr. Welgie Smith.
No scales were available at the job site to weigh the loads of material trucked to the site, although the Inspector, and Sun"s employees, recorded the number of loads brought to the work site from a nearby quarry. This was referred to as a "truck count".
It was agreed by all of the witnesses with knowledge of the project who testified, that the work progressed well, with no real problems or quarrels arising between the Inspector and Sun"s employees. Mr. Smith testified that it was one of the best jobs he had ever seen with respect to the placing and linking of the top blanket of armour stone.
During the course of the work two extras were authorized by Mr. Jacobs.
The first extra related to approval to provide about 168 square metres of additional storage space on the approach as identified in a hand drawn sketch. The approval in writing for the extra stated that because this work was above the high water mark there was only a requirement for rock and gravel fill. As well, Mr. Jacobs confirmed in writing with Sun that the quantity of additional material would be measured by truck measure, based on a deemed or agreed measurement of 11 cubic metres per truck load at a cost of $20 dollars per cubic metre. The total number of truck loads was not to exceed 45 loads.
The construction of this extra resulted in a gap between the storage area contemplated in the original work and the additional storage area contemplated by the first extra. The second extra approved related to work required to fill in that gap by adding additional rock and gravel fill. Mr. Jacobs testified that no additional filter or armour stone was required for this second extra, although filter and armour stone which originally would have been placed roughly perpendicular to the wharf face would be placed parallel to the wharf face as a result of the connection of the first extra to the original work and the creation thereby of one contiguous storage area. Work for the second extra was to be paid for by the same formula agreed upon with respect to the first extra.
The work, including the extras, was completed by on or about September 9, 1995, except for the addition of a final layer of granular topping material required for the parking area. Due to the unavailability of proper material in the rock quarry near to the site, Sun had to arrange for another contractor to ship in this granular topping material at a cost said to be $25,878.20.
On September 26, 1995, Sun submitted a "Request for Progress Payment" for the period from August 21, 1995 to September 26, 1995. There was no evidence to suggest that the work was not completed by that date, and there was no evidence of any subsequent request by Sun for a progress payment. Exclusive of GST, which is not at issue, Sun claimed $205,800 for work done on the project pursuant to the contract. This was broken down as follows:
| Original Work: |
||
| Mobilization and Demobilization (fixed) |
$ 25,000 |
|
| Rock and Gravel |
2,000 m3 @ $20 / unit |
$ 40,000 |
| Filter Stone |
450 m3 @ $80 / unit |
$ 36,000 |
| Armour Stone |
600 m3 @ $80 / unit |
$ 48,000 |
| Extra #1: |
||
| Rock and Gravel |
38 loads @ 11 / m3 |
$ 8,360 |
| Armour Stone |
3 loads @ 11 / m3 |
$ 2,640 |
| Extra #2: |
||
| Rock and Gravel |
39 loads @ 11 / m3 |
$ 8,580 |
| Armour Stone |
4 loads @ 11 / m3 |
$ 3,520 |
| Remove and Replace Rock |
$ 1,200 |
|
| Supply, Shipping and Placing of Granular Topping |
Approximately 260 tonnes @ $125 / tonne |
$ 32,500 $205,800 |
The amounts charged for the rock and gravel and armour stone said to be installed in the extras were based upon Sun"s tendered unit prices.
On November 27, 1995 in the "Final Certificate of Completion" Mr. Jacobs authorized payment under the contract in the total amount of $170,580, exclusive of GST. This was approximately $35,000 less than that claimed by Sun. Mr. Jacobs testified that the amount authorized was determined as follows:
| Mobilization and Demobilization |
Fixed Price |
$ 25,000 |
| Rock and Gravel Fill |
3, 079 m3 @ $20/m3 |
$ 61,580 |
| Filter Stone |
450 m3 @ $80/m3 |
$ 36,000 |
| Armour Stone |
600 m3 @ $80/m3 |
$ 48,000 $170,580 |
This represented payment in full of the fixed price for mobilization and demobilization, payment for 979 cubic metres of rock and gravel fill for the two extras and, with respect to the original work, payment for rock and gravel, filter stone and armour stone in the exact quantities initially estimated by Mr. Jacobs.
In order to obtain information as to the quantities of material which the contractor had placed in the original work, after the work was completed Mr. Jacobs contacted Mr. Edward Bearns, the Survey Manager for Newfoundland, and requested an "as-built" survey of the project site. That survey was conducted between October 14 and 16, 1995 and resulted in the preparation of a Sounding & Topographic Survey by Mr. Bearns ("1995 Survey"). The survey crew conducting that survey referenced the same bench or reference marks used to conduct the 1988 survey, and the result was a survey which measured the elevations and soundings of the project site and the surrounding area, including the work done by Sun on a completed, or as-built basis. Put simply, as Mr. Bearns testified, this showed the final profile or elevation, of the contract work. It did not, as Mr. Bearns acknowledged, provide any data about what was below the surface. It simply depicted the top surface of the area, including the as-built contract work.
Once completed, Mr. Jacobs used the 1995 survey to in effect re-do the exercise he had done using the 1988 survey to estimate the required rock quantities. Using the same base lines and stations, the bottom profile taken from the 1988 survey, the exact elevations required by the plans and specifications, and the elevations and soundings provided by the 1995 survey, and doing the same Average End Area Calculation, Mr. Jacobs measured the difference in volume between what the contract limits required as drawn, and what the new survey profile revealed was built. Inherent in the use of the contract profiles was the assumption that the armour and filter stone had been placed as required under the contract so that any increase in elevation was attributable to the addition of rock and gravel fill.
Mr. Jacobs testified that as a result of this exercise he concluded that there was a deficiency of 457.4 cubic metres between the quantity of material added and the quantity of material required under the contract, so that the contractor had "not quite" met what was asked for under the contract. Notwithstanding this, Mr. Jacobs was of the view that the contractor"s job was a "good job". Mr. Jacobs testified that in consequence he authorized payment as if the contractor had installed the quantities estimated to be required because in his view it was a good job.
In the result, when compared with Sun"s "Request for Progress Payment", Mr. Jacobs disallowed the claim for armour stone on the two extras (totalling 77 cubic metres of armour stone), disallowed the claim for removing and replacing rock on the second extra, and disallowed the claim for supplying and shipping granular material. He paid for 232 cubic metres of rock and gravel fill in excess of that which Sun had claimed for.
The items were disallowed on the basis that in Mr. Jacobs" view the contract did not entitle Sun to such payments. The agreement with respect to the extras only contemplated payment for additional rock and gravel fill, and did not authorize payment for either armour stone or rock removal and replacement. The contract required the contractor to place the granular topping material at the site as part of the rock and gravel fill for which the contractor was paid on the basis of $20 per cubic metre.
The payment for the 979 cubic metres of rock and gravel fill for the extra was based on the Inspector"s truck count of 89 loads, and the agreement between the parties that payment for the extras would be on the basis that each load contained 11 cubic metres.
In response to the disallowance, on January 11, 1996, Sun wrote to Mr. Jacobs. The letter was in evidence with agreement that it was a true copy of a letter so sent and received. In that letter Sun advised that it was in the process of taking the claim to court, stated that it would "summons" the Inspector who was alleged to have requested "this armour stone, even though he was told by [Sun"s president] that [Mr. Jacobs] did not want any armour stone", and complained that the specifications had been confusing with respect to the required granular topping material. Given that the only claim for armour stone that Sun had submitted and which had been disallowed related to the extras, this January 1996 complaint about payment for armour stone related only to armour stone alleged to have been provided in respect of the extras.
THE SCOPE OF THE PLAINTIFF"S CLAIM
This action was commenced by a statement of claim issued on June 13, 1996. In it Sun claimed for:
| a) the supply and placement of granular topping material in the amount of $28,466.02 which represented what was said to be Sun"s cost of $25,878.20 plus a 10% mark-up; |
| b) seven loads of armour stone said to have been requested by the defendant"s inspector, and not to have been part of the original contract, quantified in the amount of $6,160 which was particularized to be 7 loads of 11 cubic metres each, charged at $80 per cubic metre; plus |
| c) 100 cubic metres of rock fill, charged at $20 per cubic metre for a total of $2,000 which Sun alleged was owing to it under the original contract. |
On August 12, 1999, an order was granted in this proceeding allowing Sun to amend its claim in one respect. The prayer for relief was amended so that instead of item (b) above the plaintiff claimed for "12 m3 of "filter stone" and 357 m3 of "armour stone", being a total of 369 m3 @ $80.00 each" for a total of $29,520. No amendment was sought or made to the body of the claim outside of the prayer for relief.
The amendment was sought on the ground that "the Defendant was in the best position to have knowledge of the quantities of material delivered to the site in question, [and that] the Plaintiff was not able to determine the exact quantities until Discoveries were held".
As will be noted later, this assertion appears to be at odds with the evidence of John Hepditch, an employee of Sun who drove one of the two tandem trucks at the Hopedale project.
On October 6, 2000, the plaintiff filed a notice of motion returnable at the commencement of the trial on October 16, 2000 seeking leave to further amend the statement of claim to increase the claim to $57,380 and to add a claim of quantum meruit. The grounds on which the amendment was sought were identical to those in the prior notice of motion to amend except that Sun added reference to the fact that the opinion of an expert in construction matters had been engaged.
At the commencement of the trial Sun advised that it was withdrawing its allegations and claim for $28,466.02 for granular material and moved for its amendment. For reasons given orally at trial, without necessitating an adjournment of the trial, I allowed the plaintiff to amend the quantum of its claim to $57,380 as sought and to assert a claim in quantum meruit.
Sun was not permitted to assail the accuracy of the 1988 survey or its adequacy to reflect the state of the project area before construction began without an adjournment of the trial which Sun did not seek.
The amended statement of claim filed at trial reflecting the permitted amendment claimed the sum of $57,380 representing a claim for 138 cubic metres of filter stone charged at $80 per cubic metre and 618 cubic metres of armour stone charged at $80 per cubic metre which, after crediting the defendant with an allowance for an alleged overpayment on account of 155 cubic metres of rock and gravel fill at $20 per cubic metre, resulted in the claim of $57,380.
While the body of the final statement of claim continued to reference the Inspector"s order for 7 loads of armour stone in respect of the extras, and the reduction by the defendant of payment for 100 cubic metres of rock and gravel fill, no claim was advanced for those items in the amended prayer for relief. In closing submissions counsel for Sun referenced neither matter.
However, in view of the reference to these matters in the body of the finally amended statement of claim, so that there is no confusion, I will deal with each matter briefly to dispose of them.
As to the 7 loads of armour stone, Sun called the Inspector, Mr. Smith, to testify. During that testimony no suggestion was put to him that he had required armour stone for the extra work and he did not testify to that effect. Even if Mr. Smith had the authority to require Sun to deliver the armour stone, which was disputed, there is therefore no basis in the evidence to support this claim.
As to the alleged failure to pay for 100 cubic metres of rock and gravel fill under the original contract, Mr. Jacobs testified that he paid on the basis of 2,100 cubic metres of rock and gravel fill in respect of the original work, notwithstanding that the contractor"s Request for Progress Payment sought payment for 2,000 cubic metres for such material. Mr. Jacobs was not challenged on that evidence. Further, the finally amended claim seeks to credit the defendant for an overpayment of 155 cubic metres of rock and gravel fill. There is, therefore, no basis in the evidence for a claim for $2,000 due to improper reduction of the rock and gravel fill component under the contract for the original work.
THE ISSUES
At issue therefore is whether Sun was underpaid under the contract in respect of 138 cubic metres of filter stone and 618 cubic metres of armour stone installed in the original work, or whether Sun is entitled to a payment on a quantum meruit basis.
The basis of Sun"s claim, as finally amended, was that the quantity measurement techniques used by the defendant were inconsistent with the defendant"s obligations under the contract because each of the three individual units of material specified under the contract should have been separately and individually measured. In consequence, Sun claimed that the only means of accurately determining the quantities of materials placed in the work is by the count of the number of measured truck loads of the various materials put in the work, as recorded by the Inspector.
THE TERMS OF THE CONTRACT
The documents forming the contract between the parties included two standard parts entitled "Articles of Agreement" and "General Conditions" and also included the Plans and Specifications prepared by Mr. Jacobs which contained a drawing entitled "Site Plan & Sections".
Provisions relevant to the matters here at issue are:
Articles of Agreement:
| 3.1 Subject to any increase, decrease, deduction, reduction or set-off that may be made under the contract, Her Majesty shall pay the Contractor at the times and in the manner that is set out or referred to in the Terms of Payment |
| ... |
| 3.1.2 a sum that is equal to the aggregate of the products of the number of units of measurement of each class of labour, plant and material that is set out in a Final Certificate of Measurement referred to in GC44.8 multiplied in each case by the appropriate unit price, GST extra, that is set out in the Unit Price Table in consideration for the performance of the work or the part thereof that is subject to a Unit Price Arrangement. |
General Conditions:
| 1.1 In the contract |
| ... |
| 1.1.4 "Engineer" means the officer or employee of Her Majesty who is designated pursuant to the Articles of Agreement and includes a person specially authorized by the Engineer to perform, on the Engineer"s behalf, any of the Engineer"s functions under the contract and is so designated in writing to the Contractor; |
| ... |
| 44.6 If the contract or a part thereof is subject to a Unit Price Arrangement, the Engineer shall measure and record the quantities of labour, plant and material, performed, used and supplied by the Contractor in performing the work and shall, at the request of the Contractor, inform the Contractor of those measurements. |
| ... |
| 44.8 After the Engineer has issued a Final Certificate of Completion referred to in GC44.1, the Engineer shall, if GC44.6 applies, issue a Final Certificate of Measurement. |
Plans & Specifications:
| SECTION 01005: GENERAL INSTRUCTIONS |
| 1. Scope .1 The work covered under this project consist of the furnishing of all plant, labour, equipment, hardware and materials for Approach Improvements - Hopedale, Torngat Mountains District, labrador, Newfoundland, completed in strict accordance with Specifications and accompanying drawings and subject to all terms and conditions of contract. |
| ... |
| SECTION 02936: ARMOUR STONE, FILTER STONE AND ROCK FILL CORE |
| PART 1 - GENERAL |
| 1.1 Description .1 This section specifies requirements for the supply and placement of rock and gravel fill, filter stone and armour stone to the dimensions shown and in the location indicated on the drawings. |
| ... |
| 1.4 Measurement |
| for Payment ... |
| .2 Rock & Gravel Fill will be measured by the cubic metre (m3) of material installed in the work and to the dimensions indicated. |
| .3 Filter Stone will be measured by the cubic metre (m3) of material installed in the work and to the dimensions indicated. |
| .4 Armour Stone will be measured by the cubic metre (m3) of material installed in the work and to the dimensions indicated. |
| ... |
| PART 3 - EXECUTION |
| ... |
| 3.2 Placing Rock |
| Fill .1 Place rock fill core to lines, grade and dimensions indicated on the drawings. |
| .2 Side slopes to be 1.5 horizontal to 1.0 vertical as indicated on the drawings. |
| ... |
| 3.3 Filter Layer |
| Stone .1 Place filter layer stone to grades, dimensions, profiles and cross sectional elements indicated on the drawings. |
| .2 Place filter stone in single layers, a minimum of 750 mm thick as indicated on the drawings and as specified. |
| .3 Side slopes to be 1.5 horizontal to 1.0 vertical as indicated on the drawings. |
| 3.4 Armour Stone .1 Place armour stone to lines, grades and dimensions indicated on the drawings. |
| .2 Dumping of armour stone will not be permitted. Each stone will be lifted and individually placed. |
| .3 Side slopes to be 1.5 horizontal to 1.10 [sic] vertical as indicated on the drawings. |
| .4 Place armour stone to a total layer thickness as indicated on the drawings. |
| .5 Contractor will choose his stones and place them in such a way that the whole structure will be bonded and consolidated to as great an extent as nature or rock will allow. |
What was referred to in the Plans and Specifications as the "drawings" was the document entitled "Site Plan & Sections" prepared by Mr. Jacobs. The relevant portion of that drawing is the portion entitled "Partial Section (New)" which is reproduced, reduced in size, and attached at the end of these reasons as Annexe A.
THE POSITIONS OF THE PARTIES
It was common ground that Mr. Jacobs was, by virtue of the designation in the award letter, the "Engineer" as defined under the contract and that he was therefore obliged by General Condition 44.6 to measure and record the quantities of labour and material performed and supplied. It is fair to say that such was the extent of the common ground.
Robert Gosse, a professional engineer unrelated to the plaintiff corporation, testified on Sun"s behalf. The Crown did not object to Mr. Gosse being determined to be qualified to give expert evidence upon construction contract interpretation and upon the interpretation and measurement of matters related to earth moving contracts. It was Mr. Gosse"s testimony that in his experience the intent of paragraphs 1.4.2, 1.4.3 and 1.4.4 set out above was to require that each of the categories of rock material be measured by way of Average End Area Calculations done from cross-sections taken before and after placement of each of the three categories of rock. In this case, cross-sections, and hence a survey, would have to have been taken after the existing filter and armour stone was removed from the existing rock and gravel core. Subsequent cross-sections would have to be taken based upon surveys taken after the additional rock and gravel fill was placed, after the filter stone was placed, and after the armour stone was placed. The alternative, in Mr. Gosse"s view, would have been to measure the quantities by weight, but this would not be practical in a remote area such as Hopedale which lacked truck scales.
It was Mr. Gosse"s further opinion that the methodology used here by the defendant could determine the total quantity of the material placed but could not measure each class of rock as the contract required because there was, for each category of rock, no base line and no end line from which to calculate, using the Average End Area process, the quantity.
In the absence of surveys establishing the elevation on a before and after basis of each classification of rock, and in the absence of weight scales, Mr. Gosse was of the opinion that it was reasonable to rely upon the Inspector"s truck count to measure the quantities of rock placed by the contractor.
He had done a calculation on this basis which concluded that Sun had been underpaid by $57,380. Mr. Gosse concluded that Sun had not been paid for 138 cubic metres of filter stone and 618 cubic metres of armour stone.
Mr. Jacobs, on the other hand, testified that his methodology was consistent with common practice in his profession and was in strict compliance with the requirements of the contract. His calculation constituted a proper measurement of the quantities added under the contract, and having so measured he was, he testified, entitled not to use his measurement for payment purposes, but to instead pay in essence 100% of the estimated contract price for 85% of the work.
ANALYSIS
I will deal first with the claim that payment was not made in accordance with the defendant"s obligation under the contract, and then with the quantum meruit claim.
(1.) Did the defendant breach its obligations under the contract as alleged?
Out of the positions of the parties two issues arise with respect to the defendant"s contractual obligations. First, did the defendant breach its obligations under the contract in that the Engineer failed to measure the quantities of labour and material provided? Second, did the defendant otherwise breach its obligations under the contract by providing insufficient payment for the quantity of rock material delivered?
(a) Was the obligation to measure breached?
Turning to the first issue, for ease of reference I repeat the terms of General Condition 44.6:
| 44.6 If the contract or a part thereof is subject to a Unit Price Arrangement, the Engineer shall measure and record the quantities of labour, plant and material, performed, used and supplied by the Contractor in performing the work and shall, at the request of the Contractor, inform the Contractor of those measurements. |
In asserting that there was a failure to measure as required, Sun pointed to the following:
| (a) The evidence of Mr. Gosse that in essence quantities cannot be measured without being actually measured and that on the facts of this case the measurement should have been done on the basis of a process where cross-sections were based on survey measurements taken before and after each constituent rock element was added; and |
| (b) The evidence of Mr. Bearns in cross-examination that while a comparison of two surveys can establish the total volume of material added it cannot measure the actual quantities of the individual elements which were added. |
In considering this submission, I begin from the observation that Sun accepts that there is nothing inherently improper in "measuring" by way of doing an Average End Area Calculation based upon data generated by a survey and that results flowing from such a calculation can be a "measurement" within the requirements of General Condition 44.6. Sun simply submits that there must be survey data for each constituent element.
What then of the failure to have generated survey data for each constituent element? To consider this I look to what was required to be measured under the contract.
The contract drawings identified the precise measure of thickness of the layers of filter and armour stone to be installed, 1,500 mm of filter stone and 2,000 mm of armour stone, both specified as horizontal measures. Both types of stone were to be installed on a slope of 1.0 vertical to 1.5 horizontal on top of a side slope of gravel fill that was to be 1.0 vertical to 1.5 horizontal.
While the thickness of the layers of both filter and armour stone were specified with precision in the contract drawings, this was not the case for rock and gravel fill. No thickness was specified for the rock and gravel fill.
Paragraph 1.1 of section 01005 of the Plans and Specifications required the contractor to complete the work in strict accordance with the specifications and accompanying drawings. Part 1.4 of section 02936 of the Plans and Specifications provided that for the purposes of payment the filter and armour stone (the two items at issue here) were to be measured by cubic metre of "material installed in the work and to the dimensions indicated" in the contract drawing [underlining added].
In respect of the precision of the specifications, the requirement for strict compliance, and part 1.4 of section 02936, Mr. Gosse testified in cross-examination that:
| Q. And for a lack of a better description, I"ll call it the contract drawing, and we are looking at, for the record, the portion identified as "Partial Section (New)" and the drawing immediately above it. Okay? |
| A. Okay. |
| Q. And the question I was dealing with was the aspect of the thickness of the blanket of filter rock and armour stone, respectively, identified in the contract drawing. All right? |
| A. Yes. |
| Q. And you agree that the contract drawing identifies a layer or blanket of filter rock at 1500 millimeters, horizontal measurement? |
| A. Yes, sir. |
| Q. And you"ll know, as you"re the - |
| A. Yeah. |
| Q. - numbers man that that converts to a thickness, doesn"t it? |
| A. It does. |
| Q. And similarly, the 2000 millimeters of armour stone is also specified and converts to a thickness along, I guess " if you were to measure a perpendicular " not perpendicular, a right angle off of the finished rock and gravel finish, the rock fill behind, if you take a 90-degree line off of it - |
| A. Yes. |
| Q. - which would be perpendicular to that line, and you would pass through the filter rock layer and the armour stone layer, and you would be able to measure certain thicknesses, wouldn"t you? |
| A. Yes, you would, yes. |
| Q. And that thickness would be, in both cases, less than the 1500 and less 2000 horizontal measures on top because of the geometry? |
| A. Yes. |
| Q. Okay. But that"s really only secondary to that I"m asking you. The point is that the contract says that they are to install material and to be paid for material, in the case of armour stone, installed in the work and to the dimensions indicated? |
| A. Yes. |
| Q. So the owner has identified to your client, and everybody else who wants to bid this job, that they will pay a thickness of armour stone as specified in this drawing? |
| A. It"s indicated, milady, that "The pay item will be measured by the cubic meters of material installed in the work and to the dimensions." I"ve got no problem with that statement. |
| Q. Well, that"s nice reading, but that"s not my " what I asked you, I suppose. What I want to know is has the owner identified a certain thickness of armour stone that it will pay? |
| A. The owner has identified a nominal thickness of the layer. |
| Q. Would you point out to me in the contract documents, or the drawing, where we find a reference to the quotations, "nominal"? |
| A. Not there. |
From this I take that if one knows the portion of the work which required filter stone (which in this case was known with reference to the stations at which cross-sections were taken) and one knows the thickness specified for filter stone, a calculation may be done which measures the quantity which the owner agreed to pay for. The same applies to armour stone. This was the significance of the words "and to the dimensions indicated" in parts 1.4.3 and 1.4.4 of section 02936 of the Plans and Specifications.
This was the substance of the testimony of Mr. Bearns, who testified as an expert in the field of survey and particularly topographic survey, that:
| Q. Okay. Mr. Bearns, my learned friend was asking you to say that if materials are going in, different kinds of materials and you wanted to measure each type of material as it went in, then you"d have to do a survey, I think you were saying as it was occurring. |
| A. That"s one method. |
| Q. Okay. But here"s my question in the context of that sort of discussion, if you know where the toe of the material is and you know where it starts on top, on top of the level and if you know the incline, slope if you want to call it that, and the thickness of the material that is specified, can you measure it? |
| A. Of course you can, sir. You don"t have to go " you do not have to do a survey of it to get the volume of the material put in place, if it"s built to what"s on the contract drawings. |
| Q. If it"s built to what"s on the contract drawings? |
| A. Yes. |
Mr. Jacobs was subjected to a vigorous cross-examination as to the accuracy of his calculations and as to whether he had factored in matters such as the effect of the removal and re-installation of filter and armour stone and the effect of work done to the wharf between the 1988 and 1995 surveys. The cross-examination failed to establish any material error which would impact so as to vitiate the calculation as to the quantity of material installed by Sun.
In justifying his assumption that the material was placed as required by the contract, Mr. Jacobs testified in cross-examination that:
| Q. ... Now from there " now when you were doing your final post contract calculations, if I understand everything I"ve read to date, you made certain assumptions about what went into the job, didn"t you? Made assumptions about some of the materials that were installed in the work, did you not? |
| A. I base it on what was supposed to go in there and what my inspector was telling me. |
| Q. Okay. Well what did your inspector tell you about what went into the job? |
| A. He"s saying that the rock that was called for went in there in the locations that they were required. |
Mr. Jacobs confirmed that it was the inspector"s job to ensure compliance with the plans and specifications and to notify Mr. Jacobs of any variance from the plans and specifications. Mr. Jacobs also confirmed that he believed the inspector did this.
In the absence of the words "and to the dimensions indicated" I accept that a measurement could have been required as Mr. Gosse contemplated for the actual quantities of armour and filter stone installed. However, the words "and to the dimensions indicated" are, pursuant to principles of contract interpretation, to be given some meaning.
The meaning I give to the words in the contract is that the measurement for payment purposes was to be of material installed and in accordance with the dimensions specified. Two conditions were to be met for payment to ensue: first, material was to be installed as required by the specifications and second, payment would then be made according to the dimensions indicated in and required by the contract. By application of principles of geometry the volume of the specified blankets of filter stone and armour stone could be measured, and I find were so measured.
Mr. Jacobs also testified in cross-examination that the "measurement was taken consistent with common practice" and, in his belief, in strict compliance with the contract.
In coming to the conclusion that the Engineer measured the quantities of filter and armour stone, I have had regard to Mr. Gosse"s evidence that the contract required the contractor to construct the work as closely to the specifications as was possible, but that once done, each constituent element was to be separately measured so that the owner would pay on a unit price basis for any excess quantity added to construct the work in excess of the specifications.
That evidence was contradicted by Mr. Jacobs, also a professional engineer, who testified that his methodology accorded with common practice and "the way we do things and have been doing things for years".
In rejecting Mr. Gosse"s opinion on this point, I have not been satisfied that Mr. Gosse had proper regard to the words "installed in the work and to the dimensions indicated". In my view, the Court is equally well suited to interpret those words used in the contract in their plain and ordinary meaning.
Furthermore, I also have regard to the fact that the Request for Progress Payment submitted by Sun was completed in a fashion consistent with the interpretation I have placed on the obligations to measure and pay.
The evidence of Mr. Hepditch, Sun"s employee who drove one of the two tandem trucks on the project, becomes relevant in this instance. Mr. Hepditch testified that the drivers wrote each day on their time cards the number of loads hauled. He also testified that Sun"s superintendent was there to take notes, which the principal of Sun would be relying upon. While Sun did not call its superintendent, Mr. Melvin, to testify, true copies of the notes and daily time and quantity sheets he prepared dated August 29, 1995 through September 11, 1995 were in evidence, but with no agreement as to the truth of their contents. While the notes cannot therefore be relied upon to establish the number of truck loads, they do evidence advice to Sun on a timely basis of its superintendent"s count of the number of loads, broken down into loads of each of the three classifications of rock, and specifying whether they were for an "extra".
The summary of truck counts contained in those notes is as follows:
| Gravel (extra) 13 |
| Filter 42 |
| Armour 87 |
| Rock fill 201 |
and show a total of 343 loads. There is no basis in the evidence for me to believe that the notes, tendered in evidence as true copies of Mr. Melvin"s notes, were not submitted to or available to Sun on a timely basis. Mr. Melvin was not called to testify as Sun"s counsel advised Mr. Melvin "did not want to be here" and it was "not in the best interest of Sun" to subpoena him.
Mr. Gosse based his opinion upon Mr. Smith"s truck count which was as follows:
| Rock and Gravel fill 218 |
| Filter stone 42 |
| Armour stone 87 |
for a total of 347 loads.
The records of the truck counts done on the plaintiff"s and the defendant"s behalf do not significantly vary.
The significance I take from this is that Sun had advice, or at least access to advice, from its superintendent as to the number of loads of filter and armour stone delivered by the time that it submitted its Request for Progress Payment and its letter of January 11, 1996. Notwithstanding, its Request for Progress Payment in respect of the original work requested payment for 450 cubic metres of filter stone and 600 cubic metres of armour stone, each being the exact quantity installed if the filter and armour stones were installed "in the work and to the dimensions indicated".
This is consistent with the interpretation I have given to the provisions in the contract dealing with measurement for payment, and inconsistent with Mr. Gosse"s opinion.
Because Mr. Jacobs confirmed in cross-examination that while he conducted a measurement he did not use his measurements for payment purposes, it is necessary to consider the second issue, whether the defendant provided insufficient payment for the quantity of rock material delivered. Put another way, the defendant could choose to overpay but could not disregard the measurements if the result was to underpay the plaintiff.
(b) Did the defendant provide insufficient payment?
Mr. Gosse"s calculation, based upon Mr. Smith"s truck count, as to the amount of underpayment is as follows:
| Original Contract Rock & Gravel Fill quantities |
| 129 loads @ 14 cubic meters per load1806 |
| Change Order #1 Rock & Gravel Fill quantities |
| 89 loads @ 11 cubic meters per load 979 |
| Imported Gravel 139 |
| Total cubic meters of Rock & Gravel Fill |
| Completed 2924 |
| Total CM Paid 3079 |
| Difference -155 |
| Amount Owed By PWGSC -$3,100 |
| Filter Stone quantities 42 loads @ 14 cubic |
| meters per load 588 |
| Total cubic meters paid 450 |
| Difference 138 |
| Amount Owed By PWGSC $11,040 |
| Armour Stone quantities 87 loads @ 14 cubic |
| meters per load 1218 |
| Total cubic meters paid 600 |
| Difference 618 |
| Amount Owed By PWGSC $49,440 |
| Total Amount Owed By PWGSC $57,380 |
With respect to the number of loads of rock and gravel fill, the plaintiff accepts Mr. Smith"s breakdown that 89 of the 218 loads were in respect of the extras. The calculation of 139 cubic metres of imported gravel is based upon the fact that 250 tonnes of granular fill was delivered by the outside contractor. That 250 tonnes was converted by Mr. Gosse to be the equivalent of 139 cubic metres of rock and gravel fill.
With respect to all of the categories of material provided for the original work, Mr. Gosse"s opinion was premised on the assumption that each truck load counted by Mr. Smith contained 14 cubic metres of material.
That opinion, and the calculation flowing from it of the volume of materials installed, stand in sharp contrast to a calculation done by Mr. Jacobs as to the total volume of material placed in the original contract work by Sun.
By taking the 1988 and 1995 survey elevations, using the station cross-sections and doing an Average End Area Calculation, and then doing the same end volume calculation Mr. Jacobs had done on his initial estimate and the as-built calculation, Mr. Jacobs calculated that Sun installed 2,697.58 cubic metres of material in total, exclusive of the work on the extras. This compared to the 3,150 cubic metres which the contract in Mr. Jacobs" view required (and for which Sun was paid), and the 3,751 cubic metres which Mr. Gosse opined was installed in the original work.
I note with respect to Mr. Jacob"s calculation that 2,697.58 cubic metres of material was installed in the original work that Mr. Gosse accepted that the methodology used by Mr. Jacobs would produce an accurate conclusion as to the total quantity of material added to the project if one had an accurate profile of the area on a pre-work basis. The plaintiff was not on the basis of its pleadings permitted to assail the accuracy of the 1988 survey as disputing the pre-work bottom profile.
In considering the alternate positions, it is necessary to analyse the evidence which supported the accuracy of Mr. Gosse"s underlying and fundamental assumption that each truck load destined for the original work contained 14 cubic metres of material.
Mr. Hepditch, the truck driver, testified that he was able to observe not only the loads he hauled but also the loads hauled by the second truck, and that in every case the trucks were loaded with all they "could get on", and that the loads were tapped down with the back hoe so that the rock boxes, generally accepted to be 14 cubic metres in size, were full. Big loads were hauled so that the work would be done as quickly as possible so they could move on to other work.
The validity of Mr. Gosse"s assumption was not supported by the evidence of Mr. Smith. He testified that with respect to the original work the trucks were "never, ever" filled and that a 3/4 load was a "good load". Full loads were not possible for the rock and gravel fill, according to Mr. Smith, because the roads were not good enough. When the trucks began hauling filter and armour stone the tailgates were removed, Mr. Smith said, with the consequence that for filter stone with the tailgate off the loads would be half-full, while for armour stone there would be 3 to 4 rocks per load.
Sun urged that the evidence of Mr. Hepditch be preferred over that of Mr. Smith. Sun submitted that it should be preferred because of the fact that there was an incentive to load the trucks fully and because of Mr. Smith"s evidence on discovery to the effect that there were "good loads" and "no problems" about the loads. In Court, Mr. Smith testified that those comments were made in reference to the trucks carrying rock and gravel for the extras.
For the following reasons, I have not been persuaded that the trucks were carrying 14 cubic metres of material when hauling rock for the original work.
First, Mr. Jacobs identified hand-written notes he wrote and kept during the work. His note for September 1, 1995 recorded a telephone conversation with Mr. Smith wherein Mr. Smith "indicated loads appear to be small". While Mr. Smith testified that he could not recall this conversation, Mr. Jacobs testified that the note reflected a comment from Mr. Smith to the effect that the loads appeared to be small. I find this note, made before any issue arose about load size, to provide more reliable evidence of the state of the loads than the evidence of witnesses given five years after the fact. Mr. Gosse testified that there was "no way" that Mr. Jacobs" note was brought to his attention in the course of preparation of his opinion.
Second, Mr. Hepditch agreed that the truck tailgates were removed and he did not disagree with the suggestion, made on the basis of the superintendent"s note, that the tailgates were taken off on September 1 and re-installed on September 7. The truck rock box capacity was 14 cubic metres. Mr. Smith"s testimony as to the load sizes and the effect of removing the tailgates in circumstances where the loads were to be taken over rough roads and through a community where children were playing struck me as being more sensible than Mr. Hepditch"s evidence that the trucks carried their full 14 cubic metre capacity by piling and mounding the loads. Mr. Hepditch agreed that the truck tailgates were removed for larger rocks and so were only on to carry rocks 2 feet in diameter and smaller. Mr. Gosse admitted (what may be self-evident) that it would be more difficult to achieve a full load of filter stone if the tailgate was removed.
Third, the evidence of Mr. Smith that a 3/4 load was a good load, if applied to reduce Mr. Gosse"s calculation by 1/4, results in a reduced quantity of 2,813.25 cubic metres. This is very close to and consistent with the result calculated by Mr. Jacobs of 2,697.58 cubic metres as the total volume of material added to the original work.
Fourth, I did not find the discovery evidence put to Mr. Smith in cross-examination to be necessarily inconsistent with his explanation that such testimony was with respect to the trucks carrying gravel for the extras.
Fifth, and finally, the consequence of accepting Mr. Gosse"s calculation is to accept that notwithstanding access to the truck count broken down by rock category done by its employee, Mr. Melvin, Sun submitted a request for payment which underestimated the filter stone installed by 138 cubic metres and understated the armour stone installed by 618 cubic metres (being 44 truck loads of armour stone based on Mr. Gosse"s assumption). Put another way, the contractor claimed for only 76% of the filter stone and 49% of the armour stone that it now says, five years after the fact by an amendment allowed at trial, was installed. Notwithstanding the presence of Sun"s principal in Court throughout the giving of evidence, no explanation was provided by him, or by Sun"s superintendent, as to how or why Sun"s initial request for payment was so egregiously understated. While Mr. Gosse testified that the truck count "scenario" was his idea, that provides no explanation as to why the claim in this action diverges so substantially from Sun"s original request for payment.
For these reasons, the plaintiff failed to persuade me on the evidence that the trucks carried the loads assumed by its expert and used to conclude that Sun had been underpaid by the defendant for the quantity of filter stone and armour stone it installed in the original work.
(2.) The quantum meruit claim
My finding that the plaintiff failed to establish that it was underpaid is also dispositive of the claim of quantum meruit.
In addition, as a matter of law where parties to a contract have made an express contract covering the facts at issue, and that contract remains open and unrescinded, as is the case now before the Court, there is no scope for application of the remedy of quantum meruit. See, for example, Peter Kiewit Sons" Company of Canada Ltd. et al. v. Eakins Construction Ltd., [1960] S.C.R. 361.
This is not a case where, as the plaintiff submitted, a contract makes some, but not full, provision for payment. In the case before me the contract made full provision for payment, subject only to the factual determination as to the number of units of each class of material installed in the project.
CONCLUSION
For the reasons set out above, the plaintiff"s claim is dismissed. The defendant is entitled to its costs, to be assessed in the usual course.
"Eleanor R. Dawson"
Judge
Ottawa, Ontario
December 18, 2000
ANNEXE A