Gould (Brad) Trucking & Excavating Ltd. v. Dewinter et al., 2015 NBCA 47

• Judge: Richard, Bell and Green, JJ.A.
• Court: Court of Appeal (New Brunswick)
• Case Date: December 16, 2014
• Jurisdiction: New Brunswick
• Citations: 2015 NBCA 47;(2015), 438 N.B.R.(2d) 274 (CA)

Gould Trucking v. Dewinter (2015), 438 N.B.R.(2d) 274 (CA);

    438 R.N.-B.(2e) 274; 1141 A.P.R. 274

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Sommaire et texte intégral

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2015] N.B.R.(2d) TBEd. AU.014

Renvoi temp.: [2015] N.B.R.(2d) TBEd. AU.014

Her Majesty the Queen in right of the Province of New Brunswick (appellant) v. Brad Gould Trucking & Excavating Ltd. (respondent) and Bird Construction Company (respondent)

(135-13-CA; 2015 NBCA 47)

Indexed As: Gould (Brad) Trucking & Excavating Ltd. v. Dewinter et al.

Répertorié: Gould (Brad) Trucking & Excavating Ltd. v. Dewinter et al.

New Brunswick Court of Appeal

Richard, Bell and Green, JJ.A.

July 23, 2015.

Summary:

Résumé:

New Brunswick issued an invitation to tender for the construction of a new building. Although New Brunswick advised bidders of the existence of a geotechnical (soils) report, the report was not listed as part of the tender documents. Bird Construction Company (Bird) was awarded the Phase 1 contract for a lump sum of $6,389,999. Brad Gould Trucking & Excavating (Gould) was the successful bidder on a sub-contract to provide excavation for $1.25 million. Alleging a collateral oral agreement, Gould sued Bird for $964,043.30, representing the cost of additional work required and costs incurred because there was a larger portion of rock material than had been anticipated. Bird brought a third party claim against New Brunswick for the amount of Gould's claim plus $87,623.35. Gould amended its claim to plead that it was entitled to compensation under its sub-contract with Bird which incorporated the "change of soil conditions" clause in Bird's contract with New Brunswick. Bird did not contest this alternative claim if it was determined that Bird had a valid change in soils claim against New Brunswick.

The New Brunswick Court of Queen's Bench, Trial Division, in a decision reported at (2013), 412 N.B.R.(2d) 276; 1070 A.P.R. 276, dismissed Gould's claim regarding a collateral oral agreement with Bird. The court allowed Bird's third party claim against New Brunswick in part, granting Bird and Gould a combined judgment for $713,808.19. Bird's claim for mark-up and additional costs of bonding, insurance and supervision was dismissed. New Brunswick appealed. Bird cross-appealed from the dismissal of its claim for bonding, insurance and supervision costs.

The New Brunswick Court of Appeal allowed New Brunswick's appeal. The judgment below was set aside. Bird's cross-appeal was also dismissed. If liability had been established, the court would have allowed the appeal from the damages award to the extent of reducing the award to $215,110. As well, the cross-appeal would have been allowed.

Building Contracts - Topic 557

The contract - Terms - Soil conditions - New Brunswick issued an invitation to tender for the construction of a new building - Bird Construction Company (Bird) was awarded the Phase 1 contract - Brad Gould Trucking & Excavating (Gould) was the successful bidder on a sub-contract to provide excavation - Gould sued Bird for $964,043.30, for additional work required and costs incurred because there was a larger portion of rock material than had been anticipated - Bird brought a third party claim against New Brunswick for the amount of Gould's claim plus $87,623.35 under the change in soil conditions clause in the standard form contract - The trial judge allowed Bird's third party claim against New Brunswick in part, granting Bird and Gould a combined judgment for $713,808.19 - New Brunswick appealed - The New Brunswick Court of Appeal allowed the appeal - In order to engage the change in soil conditions clause, there had to have been either a substantial difference between the information relating to soil conditions provided by New Brunswick and the actual conditions encountered or a substantial difference between Bird's and Gould's reasonable assumptions of fact based on the soil conditions and the conditions encountered - The information provided by New Brunswick was not misleading - Bird's and Gould's assumptions of what would be required to complete the work, based on that information, were not reasonable - The change in soil conditions clause was not engaged - New Brunswick was not liable to pay for extra work - See paragraphs 14 to 17.

Building Contracts - Topic 557

The contract - Terms - Soil conditions - New Brunswick issued an invitation to tender for the construction of a new building - Bird Construction Company (Bird) was awarded the Phase 1 contract - Brad Gould Trucking & Excavating (Gould) was the successful bidder on a sub-contract to provide excavation - Gould sued Bird for $964,043.30, for additional work required and costs incurred because there was a larger portion of rock material than had been anticipated - Bird brought a third party claim against New Brunswick for the amount of Gould's claim plus $87,623.35 under the change in soil conditions clause in the standard form contract - The trial judge allowed Bird's third party claim against New Brunswick in part, granting Bird and Gould a combined judgment for $713,808.19 - New Brunswick appealed - The New Brunswick Court of Appeal allowed the appeal - The trial judge's reasons revealed that he had simply lifted two unrelated excerpts from the lengthy and technical soil report to justify allowing the change in soils claim - The reasons did not reveal a "careful analysis of evidence leading to detailed findings of fact", but, rather, demonstrated conclusions premised primarily on a cursory analysis of one excerpt from the report - The judge failed to consider critical evidence - His conclusion that Bird's and Gould's assumptions regarding soil conditions were reasonable was tainted with palpable and overriding error - The assumptions made by Bird and Gould regarding the "diggability" of the rock were simply unreasonable - New Brunswick bore no liability for the additional costs - See paragraphs 18 to 41.

Building Contracts - Topic 1389

Tender calls - Breach of tender - Damages - [See Building Contracts - Topic 2794 ].

Building Contracts - Topic 2784

Payment - Compensation to builder - For changed conditions - What constitutes a changed condition - [See both Building Contracts - Topic 557 ].

Building Contracts - Topic 2794

Payment - Compensation to builder - For changed conditions - Measure of compensation - New Brunswick issued an invitation to tender for the construction of a new building - Bird Construction Company (Bird) was awarded the Phase 1 contract - Brad Gould Trucking & Excavating (Gould) was the successful bidder on a sub-contract to provide excavation - Gould sued Bird for $964,043.30, for additional work required and costs incurred because there was a larger portion of rock material than had been anticipated - Bird brought a third party claim against New Brunswick for the amount of Gould's claim plus $87,623.35 under the change in soil conditions clause in the standard form contract - The trial judge allowed Bird's third party claim against New Brunswick in part, granting Bird and Gould a combined judgment for $713,808.19 - New Brunswick appealed - The New Brunswick Court of Appeal, having allowed the appeal on the basis that New Brunswick was not liable for the additional costs, indicated that, if liability had been established, the damages award would have been reduced to $215,110 - Because Gould and Bird failed to prove damages based on a "cost plus basis", the trial judge applied a unit price basis - In doing so, he erred in law - It was not open to the judge to automatically default to a unit price assessment - If the cost plus approach was not employed, a defendant was entitled to the least burdensome award - As the trial judge had applied the wrong legal principles and the record was sufficient, the court proceeded with its own assessment of damages - Gould had successfully mitigated by delivering 43,022 tons of shale to Simpson, who owned rock breakers, in exchange for the use of Simpson's rock breakers - Applying a $5 per ton value to the shale delivered led to the conclusion that the damages suffered by Gould totalled $215,100 - See paragraphs 42 to 58.

Contracts - Topic 1277

Formation of contract - Tender calls - Breach of tender - Damages - [See Building Contracts - Topic 2794 ].

Damages - Topic 6528

Contracts - Building contracts - Breach by owner - Measure of damages (incl. election) - [See Building Contracts - Topic 2794 ].

Practice - Topic 8808

Appeals - General principles - Duty of appellate court respecting conclusions or interpretation of trial judge (incl. contractual interpretation) - New Brunswick issued an invitation to tender for the construction of a new building - Bird Construction Company (Bird) was awarded the Phase 1 contract - Brad Gould Trucking & Excavating (Gould) was the successful bidder on a sub-contract to provide excavation - Gould sued Bird for $964,043.30, for additional work required and costs incurred because there was a larger portion of rock material than had been anticipated - Bird brought a third party claim against New Brunswick for the amount of Gould's claim plus $87,623.35 under the change in soil conditions clause in the standard form contract - The trial judge allowed Bird's third party claim against New Brunswick in part, granting Bird and Gould a combined judgment for $713,808.19 - New Brunswick appealed - The New Brunswick Court of Appeal discussed the standard of review, stating, "Though there is arguably an exception to the rule that contractual interpretation is a question of mixed fact and law in the case of standard form contracts that are widely used ..., I am of the view the interpretation of the portion of the contract in dispute in this case is largely fact driven. It is therefore subject to a standard of review based on palpable and overriding error. Absent such error, the decision of the trial judge must stand." - See paragraphs 11 and 13.

Cases Noticed:

Corpex (1977) Inc. v. Canada, [1982] 2 S.C.R. 643; 50 N.R. 197, refd to. [para. 11].

Creston Moly Corp. v. Sattva Capital Corp., [2014] 2 S.C.R. 633; 461 N.R. 335; 358 B.C.A.C. 1; 614 W.A.C. 1; 2014 SCC 53, refd to. [para. 13].

1298417 Ontario Ltd. v. Lakeshore (Town) (2014), 326 O.A.C. 322; 2014 ONCA 802, refd to. [para. 13].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 13].

Vallieres et al. v. Vozniak (2014), 580 A.R. 326; 620 W.A.C. 326; 2014 ABCA 290, refd to. [para. 13].

Waxman et al. v. Waxman et al. (2004), 186 O.A.C. 201 (C.A.), leave to appeal denied (2005), 339 N.R. 200; 207 O.A.C. 400 (S.C.C.), refd to. [para. 38].

Southcott Estates Inc. v. Toronto Catholic District School Board, [2012] 2 S.C.R. 675; 435 N.R. 41; 2012 SCC 51, refd to. [para. 43].

Naylor Group Inc. v. Ellis-Don Construction Ltd., [2001] 2 S.C.R. 943; 277 N.R. 1; 153 O.A.C. 341; 2001 SCC 58, refd to. [para. 44].

MacWilliams v. AMEC Americas Ltd. (2012), 388 N.B.R.(2d) 254; 1006 A.P.R. 254; 99 C.C.E.L.(3d) 171; 2012 NBCA 46, leave to appeal refused (2012), 445 N.R. 392 (S.C.C.), refd to. [para. 44].

Schurman v. Covered Bridge Recreation Inc. (2009), 340 N.B.R.(2d) 168; 871 A.P.R. 168; 2009 NBCA 1, refd to. [para. 44].

Diotte v. Consolidated Development Co. (2014), 425 N.B.R.(2d) 271; 1107 A.P.R. 271; 2014 NBCA 55, refd to. [para. 44].

Goodfellow's Trucking Ltd. v. New Brunswick (2005), 288 N.B.R.(2d) 97; 751 A.P.R. 97; 2005 NBCA 73, refd to. [para. 50].

Miller Contracting Ltd. v. Canada (Minister of Transport) (1996), 205 N.R. 321 (F.C.A.), refd to. [para. 50].

Hamilton v. Open Window Bakery Ltd. et al., [2004] 1 S.C.R. 303; 316 N.R. 265; 184 O.A.C. 209; 2004 SCC 9, refd to. [para. 54].

Leger v. Fredericton Exhibition Ltd. et al. (2015), 434 N.B.R.(2d) 186; 1132 A.P.R. 186; 2015 NBCA 20, refd to. [para. 56].

Leger v. G & G Carnival Amusements Inc. et al. - see/voir Leger v. Fredericton Exhibition Ltd. et al.

Johnson v. State Farm Fire and Casualty Co. (2015), 429 N.B.R.(2d) 251; 1119 A.P.R. 251; 2015 NBCA 4, refd to. [para. 56].

J.H. v. T.H. (2014), 422 N.B.R.(2d) 388; 1096 A.P.R. 388; 2014 NBCA 52, refd to. [para. 56].

Authors and Works Noticed:

Heintzman, Thomas G. and Goldsmith, Immanuel, Canadian Building Contracts (4th Ed. 1988), (Looseleaf, updated 2013, release 3), p. 10.2 [para. 53].

Counsel:

Avocats:

Krista Lynn Colford and Michael Leonard Hynes, for the appellant;

Rodney J. Gillis, Q.C., and Gregory L. Englehutt, for the respondent, Brad Gould Trucking & Excavating Ltd.;

Thomas G. O'Neil, Q.C., and Richard J. Scott, Q.C., for the respondent, Bird Construction Company.

This appeal and cross-appeal were heard on November 18 and December 16, 2014, by Richard, Bell and Green, JJ.A., of the New Brunswick Court of Appeal. Bell, J.A., rendered the following reasons for judgment for the court on July 23, 2015, which were published in an official bilingual version on August 20, 2015.