Conwest Contracting Ltd. v. Crown and Mountain Creations Ltd.

2021 BCSC 2116 Conwest Contracting Ltd. v. Crown and Mountain Creations Ltd.

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Conwest Contracting Ltd. v. Crown and Mountain Creations Ltd., 2021 BCSC 2116 Date: 20211028 Docket: S185014 Registry: Vancouver Between: Conwest Contracting Ltd. Plaintiff And Crown and Mountain Creations Ltd. Defendant - and - Docket: S1811290 Registry: Vancouver Between: BelPacific Excavating & Shoring Limited Partnership Plaintiff And Crown and Mountain Creations Ltd. Defendant Before: The Honourable Madam Justice Burke Reasons for Judgment Counsel for Plaintiff Conwest Contracting Ltd.: G.E.H. Cadman, QC A. Tatti (A/S) Counsel for the Plaintiff BelPacific Excavating & Shoring Limited Partnership: A. Shee Counsel for Defendant: D.H. Coles Place and Date of Trial: Vancouver, B.C. September 28-30, 2020 October 1-2, 5-9, 2020 March 8-12, 2021 March 22-26, 2021 Place and Date of Judgment: Vancouver, B.C. October 28, 2021 I. Introduction.. 3 II. Overview... 4 A. Amounts at Issue. 6 B. Relevant Contractual Provisions. 7 III. Issues.. 9 IV. Legal principles.. 10 V. Discussion and analysis.. 12 A. Did Conwest perform the work for which it was not paid and has Conwest properly substantiated the invoices that it claims?. 12 B. Who is responsible for the work not being completed by the stipulated deadline? 16 1. Did Conwest encounter unknown conditions within the meaning of the contract? 17 2. What other factors created the delay, to

who were those delays attributable, and who is responsible for the resulting "extra" work?. 35 C. Did Conwest breach the Contract by failing to complete the work by the stipulated deadline? 36 D. Did Crown lawfully terminate the Contract?. 46 1. Is Crown entitled to the damages claimed and/or set-off against Conwest .50 E. Is BelPacific entitled to damages against Conwest for the work provided under the Subcontract?. 56 1. Did BelPacific breach the terms of the Subcontract?. 56 2. To what extent did BelPacific complete the scope of the work provided for in the Subcontract?. 58 3. Is BelPacific entitled to a lien against the lien bond posted as security by Crown? 60 VI. Summary.. 63 I. Introduction [1] Conwest Contracting Ltd. ("Conwest"), a civil contractor, claims for nearly $800,000 owed under a construction contract to provide excavation and shoring services for a six-storey, 47-unit condominium development located near Lynn Creek in North Vancouver. [2] Crown and Mountain Creations Ltd. ("Crown") is the contracting party and the legal owner and developer of the project at issue. [3] Crown denies that Conwest is entitled to payment under the contract or a lien against its property. It has counterclaimed for damages arising from delay, amongst other things, and seeks to offset the cost of completing the work with another contractor against any award to Conwest. [4] BelPacific

Excavating & Shoring ("BelPacific"), a subcontractor of Conwest, has filed a separate claim for unpaid invoices against Conwest. These actions were ordered to be heard together. II. Overview [5] On October 16, 2017, Conwest entered into a CCDC 2 Stipulated Price Contract (the "Contract") with Crown, under which Conwest agreed to perform shoring and excavation work identified in the Contract for the Crown project in North Vancouver. The total contract price was $855,750 (inclusive of taxes), subject to adjustments as provided in the Contract documents. [6] The Contract required Conwest to commence the work on October 24, 2017, and substantially complete the work by January 24, 2018. [7] On October 20, 2017, Conwest engaged a subcontractor, BelPacific, and entered into a CCA 19 Stipulated Price Subcontract (the "Subcontract"), in the amount of $298,400 plus GST, to perform the shoring portion of the work on the project. [8] Under section 2.2.5 of the Contract, the parties agreed that an independent consultant would determine the amounts owing to Conwest based upon its observations and evaluation of Conwest's applications for payment. Crown designated GeoPacific Consultants Ltd. ("GeoPacific") as the consultants. [9] Pursuant to the Contract, Crown agreed to make progress payments to Conwest based upon the contract price following certification of the progress payments by

GeoPacific. If Conwest intended to make a claim for extras, it could do so by providing notice to Crown directly and obtaining written approval [10] Conwest says between October 2017 and March 2018, it proceeded with the work in accordance with the Contract, with oversight by GeoPacific consultant Farshid Bateni. Conwest says it complied with all directions issued by GeoPacific in its Technical Memoranda. As a result of unanticipated obstacles to construction, Conwest says it sought approval, where required, for certain "extras". Conwest says as a result of events outside of its control, the work could not be completed within the schedule originally determined by the parties. [11] On March 19, 2018, Conwest discontinued work, as Crown had failed to make progress payments from January and February 2018 and refused to approve further extra work orders Conwest viewed as necessary to complete the project. By this time, counsel for Conwest says 80 percent of the work had been completed and the remaining value of the scope of work was less than $165,000. [12] As a result, on March 20, 2018, Crown advised Conwest that it was in breach of contract and provided Conwest five business days to cure the breach. On April 3, 2018, having received no response from Conwest, Crown purported to terminate the Contract, effective April 4, 2018, as per Section 7.1.2 of the Contract. It also advised

it would complete Conwest's scope of work and offset the cost of doing so against any amounts owing to Conwest. [13] On April 4, 2018, Conwest provided notice that it did not accept the purported termination, maintaining the termination was wrongful and a fundamental breach of the Contract. Conwest also issued 12 invoices dated March 23, 2018, for "extras" performed on the project. [14] On April 4, 2018, Crown also entered into a fixed-price contract with Mainland Shoring & Deep Foundation Ltd., to complete the outstanding work for $486,465 (inclusive of taxes) to be completed by May 5, 2018. That work was completed on time and on budget. [15] Crown says that Conwest breached the Contract by failing to complete the work on time. Additionally, Crown alleges that in March 2018, Conwest attempted to transform a "fixed price" contract into a "cost-plus" contract, when it determined it had underbid the Contract or failed to properly manage the work. [16] Crown says Conwest failed to manage and supervise its subcontractor, BelPacific and failed to coordinate the work with BelPacific or address the weather and sloughing issues. It also refused to complete the work on the basis that a price for "extras" had not been agreed to, despite the fact that the Contract provided otherwise and Conwest failed to honour the contract in a "good faith" manner by sending a "Friday night ultimatum".

Finally, Crown says Conwest also failed to provide dewatering and backfilling and caused the District of North Vancouver to issue three fines to Crown on account of Conwest's trucks. [17] Alternatively, if Conwest is entitled to payment under the Contract, Crown claims a set-off of the expenses and damages against any amount found owing to Conwest. [18] For its part, BelPacific says it was not paid for work completed under the Subcontract and has filed a claim against Conwest. A. Amounts at Issue [19] Conwest seeks judgment in the amount of $598,640.82, excluding interest. This sum is calculated as including the January 25, March 2 and March 23, 2018 progress draws in the amount of $376,628.11 and March 23, 2018, invoices for "extras" in the amount of $141,936.94. In addition, it seeks $80,075.77, being the holdback amount of all invoices, paid or unpaid. [20] Crown paid Conwest the total of $90,247.50 in respect of its first progress draw and $147,903.33 in respect of its second progress draw for a total of $238,150.83. Crown made no further payments to Conwest. The unpaid holdback amount specific to those two draws is $25,201.15, plus five percent GST. [21] Conwest says Crown has failed to make payment of $518,565.05 plus the sum of the 10 percent holdback, GST and contractual interest to Conwest in breach of the Contract. In its closing submissions, Conwest claims damages in

the amount of $598,640.82, plus interest. [22] If the Court determines the amount claimed is due to Conwest, Conwest seeks a direction that interest should be calculated on the basis of clause 5.3 of the Contract. [23] Crown seeks to offset any potential damages awarded to Conwest in its counterclaim, asserting damages from replacing Conwest with Mainland, among other things, in the amount of $750,148.88. [24] BelPacific claims against Conwest for unpaid invoices for its work in the outstanding amount of $238,763.70. The interest calculated is $47,936.63 as per clause 6.5 of the Subcontract, but the Court may wish to direct that if the parties are unable to agree to this the matter can be directed to the Registrar. B. Relevant Contractual Provisions [25] A number of contractual provisions were relied upon by all parties in this matter. The Contract is lengthy and the terms dense. Suffice it to say the parties did not follow these terms to the letter or, indeed in some circumstances, at all. However, each relies on the provisions favouring their respective positions. [26] I will not set out all of the referenced provisions, but note a few pertinent provisions as follows: GC 5.8 - WITHHOLDING OF PAYMENT 5.8.1 - If because of climatic or other conditions reasonably beyond the control of the Contractor, there are items of work that cannot be performed, payment in full for that

portion of the Work, which has been performed as certified by the Consultant shall not be withheld or delayed by the Owner on account thereof, but the Owner may withhold, until the remaining portion of the Work is finished, only such an amount that the Consultant determines is sufficient and reasonable to cover the cost of performing such remaining Work. GC 6.3 - CHANGE DIRECTIVE 6.3.6 - The adjustment in the Contract Price for a change carried out by way of a Change Directive shall be determined on the basis of the cost of the Contractor's actual expenditures and savings attributable to the Change Directive, valued in accordance with paragraph 6.3.7 and as follows: 1. If the change results in a net increase in the Contractor's cost, the Contract Price shall be increased by the amount of the net increase in the Contractor's cost, plus the Contractor's percentage fee on such net increase.

2. If the change results in a net decrease in the Contractor's cost, the Contract Price shall be decreased by the amount of the net decrease in the Contractor's cost, without adjustment for the Contractor's percentage fee.

3. The Contractor's fee shall be as specified in the Contract Documents or as otherwise agreed by the parties. 6.3.11 - Pending determination of the final amount of a Change Directive, the undisputed value of the Work performed as the result of a Change Directive is eligible to be included in progress payments. 6.3.12 - If the Owner and the Contractor do not agree on the proposed adjustment in the Contract Time attributable to the change in the Work, or the method of determining it, the adjustment shall be referred to the Consultant for determination. GC 6.4 CONCEALED OR UNKNOWN CONDITIONS 6.4.1 - If the Owner or the Contractor discovers conditions at the Place of the Work which are: 1. subsurface or otherwise concealed physical conditions which existed before the commencement of the Work which differs materially from those indicated in the Contract Documents; or then the observing party shall give Notice in Writing to the other party of such conditions before they are disturbed and in no event later than 5 Working Days after first observance of the conditions. 6.5.3 - If the Contractor is delayed in the performance of the Work by: 3. abnormally adverse weather conditions, or 4. any cause beyond the Contractor's control other than one resulting from a default or breach of Contract by the Contractor, then the Contract Time shall be extended for such reasonable time as the

Consultant may recommend in consultation with the Contractor. The extension of time shall not be less than the time lost as the result of the event causing the delay, unless the Contractor agrees to a shorter extension 7.1.2 - If the Contractor neglects to prosecute the Work properly or otherwise fails to comply with the requirements of the Contract to a substantial degree and if the Consultant has given a written statement to the Owner and Contractor that sufficient cause exists to justify the action, the Owner may, without prejudice to any other right or remedy the Owner may have, give the Contractor Notice in Writing that the Contractor is in default of the Contractor's contractual obligations and instruct the Contractor to correct the default in the 5 Working Days immediately following the receipt of such Notice in Writing. 7.1.4. - If the Contractor fails to correct the default in the time specified or in such other time period as may be subsequently agreed in writing by the parties, without prejudice to any other right or remedy the Owner may have, the Owner may: 2. terminate the Contractor's right to continue with the Work in whole or in part or terminate the Contract. III. Issues [27] Each party has framed the issues somewhat differently. There is no real dispute that a contract existed between Conwest and Crown and a contract exists between Conwest and BelPacific. [28]

The main issues between these parties centre on how much work Conwest and its subcontractor BelPacific had completed by March 18, 2018 and the extra charges associated with that work; who was responsible for the delays in the work in this matter; and whether the contract between Crown and Conwest was lawfully terminated. [29] The following issues arise: 1. Did Conwest perform the work for which it was not paid and has Conwest properly substantiated the invoices that it claims?

2. Who is responsible for the work not being completed by the stipulated deadline? i. Did Conwest encounter unknown conditions within the meaning of the Contract? ii. What other factors created the delay, to whom were those delays attributable, and who is responsible for the resulting "extra" work?

3. Did Conwest breach the Contract by failing to complete the work by the stipulated deadline?

4. Did Crown lawfully terminate the Contract? i. Is Crown entitled to the damages claimed and/or set-off against Conwest?

5. Is BelPacific entitled to damages against Conwest for the work provided under the Subcontract? i. Did BelPacific breach the terms of the Subcontract? ii. To what extent did BelPacific complete the scope of the work provided for in the Subcontract?

6. Is BelPacific entitled to a lien against the lien bond posted as security by Crown? IV. Legal principles [30] This is a difficult contractual dispute--made more so by the fact the parties did not adhere to various provisions in a detailed dense contract. There are significant differences between the parties concerning the application of the pertinent terms at issue. [31] Overall, however, as Conwest argues, the individual contract provisions must be construed in the context of the Contract as a whole, along with the background of relevant facts known to the parties at the time they entered into the Contract: British Columbia (Minister of Technology Innovation and Citizens' Services) v. Columbus Real Estate Inc., 2016 BCCA 283 at para.

41. While Crown says the terms of the Contract supersede all previous offers, discussions and correspondences; insofar as they may assist with interpretation of the terms of the Contract and understanding of the mutual intention of the parties, the surrounding circumstances known to both parties may be used to assist in that interpretation. [32] Numerous contractual provisions are pertinent in this matter. [33] As noted earlier, various provisions at issue were not followed by any of the three parties involved in this litigation. The owner, the contractor, and the consultant all appear to have overlooked or circumvented certain terms of the Contract at times. Despite this, each party in this lawsuit seeks to rely on various provisions of the Contract. Conwest argues, however, that this does not mean the provisions were not "substantially" followed. In addition, Conwest maintains that extrinsic evidence concerning the surrounding circumstances of the Contract may be used to ascertain the mutual intent of the parties. [34] The basic legal principles with respect to contractual interpretation are clear and set out in a number of cases including Sandhu v. Sidhu, 2019 BCSC 514. In particular, that case notes that the surrounding circumstances that were known to both parties at the time the contract was executed may be used to assist in the interpretation "provided that the consideration of the surrounding circumstances does not overwhelm or contradict the words employed": at para.

41. See Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 at para. 57; Kent v. Panorama Mountain Village Inc., 2021 BCCA 332 at para. 22. [35] The extent to which the court should consider the surrounding circumstances of a contract was set out by the Supreme Court of Canada in Sattva Capital Corp. at para. 57: The goal of examining such evidence is to deepen a decision-maker's understanding of the mutual and objective intentions of the parties as expressed in the words of the contract. The interpretation of a written contractual provision must always be grounded in the text and read in light of the entire contract (Hall, at pp. 15 and 30-32). While the surrounding circumstances are relied upon in the interpretative process, courts cannot use them to deviate from the text such that the court effectively creates a new agreement (Glaswegian Enterprises Inc. v. B.C. Tel Mobility Cellular Inc. (1997), 101 B.C.A.C. 62). [36] Individual contract provisions must therefore be construed in the context of the contract as a whole. The surrounding circumstances known to both parties may also be used to assist in the interpretation of the contract terms. They reflect the mutual and objective intention of the parties, and assist with the correct interpretation of the contract terms. [37] These general principles apply when considering the various key provisions applicable to the issues

raised in this matter. V. Discussion and analysis A. Did Conwest perform the work for which it was not paid and has Conwest properly substantiated the invoices that it claims? [38] Conwest says at the time it abandoned the project, 80 percent of the work was complete. Crown denies that and says the work claimed by Conwest is in excess of the value of the work actually performed. [39] After reviewing the testimony and documentary evidence, I conclude that by the time Crown terminated the contract, Conwest had completed close to 80 percent of the work it was contracted to do. [40] Gordon Grant is an experienced construction site superintendent hired by Crown in September 2017 for the project. Mr. Grant indicated he worked closely with Mr. Ashti, one of the principals of Crown, on the work for the different trades and was in daily contact with Mr. Ashti with respect to any extras requested. [41] Mr. Grant held weekly contractor meetings throughout the entire project. He compiled notes and transcribed them within a day or two and circulated them to all the contractors. Mr. Grant did not have any complaints or corrections to those notes. In addition, when Mr. Grant was on site, he kept site notes--a daily handwritten report of the day's activities. [42] Initially, the project was to commence on October 24, 2017. The excavation permit was however delayed and not issued until November

24, 2017. BelPacific was on-site commencing October 31, 2017, and Conwest started on November 27, 2017. [43] In his testimony, Mr. Grant was taken to various notations of problems, in particular with BelPacific's work, whom he said had regular equipment breakdowns and worked short days. Mr. Grant said it was a very busy time and BelPacific sent old equipment from the yard which did not appear to be well-maintained. However, Mr. Grant said overall Conwest did the work and put in full days. Mr. Grant's concern lay with BelPacific. While Mr. Grant expressed frustration with BelPacific, he agreed by the time Conwest left the project, the excavation and shoring work was at least 75 percent complete. The fundamental concerns appeared to centre on delay in this work and the payment of extras submitted by Conwest as part of the completion of the work. [44] In addition to this, I note Mr. Fatemi, one of Crown's principals, testified that Crown relied on progress reports prepared by Conecon Consultants Inc. ("Conecon") --the Quantity Surveyors and Construction Cost Consultants during the project, to provide progress payments. While Crown says these reports are hearsay evidence, Mr. Fatemi was cross-examined on and testified about key aspects of these reports. [45] Mr. Fatemi said the Quantity Surveyors assessed the site and took pictures. He said their work needed to be accurate, as the

Quantity Surveyor needed to certify the amount of work for the financial institution to release progress draws on the project. Mr. Fatemi said Crown paid professionals to provide the service and relied on that advice and service. This documentary evidence was helpful in determining the progress and state of the work as the project progressed. [46] For each progress report, the Quantity Surveyor conducted a site inspection and prepared a draft of the progress report. This it provided to Mr. Fatemi for review before the report was submitted to the financial institution for release of funds. While Mr. Fatemi said he did not review the narrative of the report for accuracy, he reviewed the progress draw invoice for the trades and the invoices provided by the trades to be reimbursed for the invoices. He agreed he had no reason to disagree with the site inspection reports in the progress reports prepared by Conecon. [47] Progress Report #1, dated November 6, 2017, with a site inspection of November 5, 2017, indicated that the excavation and shoring contractor had mobilized and pipe piles had been delivered. Mr. Fatemi agreed this was an accurate description. Mr. Fatemi also agreed the narrative of the report indicated the same and was accurate. [48] Progress Report #5, dated February 5, 2018, indicated after a February 1, 2018, site inspection that the excavation and shoring were

"well advanced", along with photos which Mr. Fatemi said was accurate. The report also indicates the foundation permit was expected to be issued by the end of February 2018. The request for a building permit had been submitted during the week of September 18, 2017. [49] While Progress Report #5 also indicated that the shoring and excavation work was "slightly behind schedule" (emphasis my own), it noted "subject to favourable weather conditions, continuous supervision, adequate trade contractor forces and timely coordination of interior finishers the overall schedule remains achievable". Mr. Fatemi indicated he discussed this with the Quantity Surveyor, Conecon. While he viewed the work as being "well behind schedule", Conecon described it as slightly behind schedule based on Mr. Fatemi's request and his conversation with the bank regarding financing. This representation to the bank allowed for the progress payment to be made. [50] Progress Report #5 indicated that by February 2018, the shoring and excavation was 65 percent complete. The January invoice from Conwest listed a similar work completion percentage. Specifically, the dollar amounts were the same. The total invoices submitted by Conwest in January 2018 for excavation and shoring was $453,300. Mr. Fatemi relied on those numbers to obtain this progress draw arising from the February report, while leaving the January

Conwest invoices unpaid. Despite receiving money for the Conwest invoices from the financial institution, Crown did not pay Conwest. [51] Progress Report #6, dated May 3, 2018, had a site inspection of May 2, 2018. Once again, the Report indicated the "excavation and shoring [are] well advanced". Mr. Fatemi said this was accurate. The Report also noted, however, that "excavation and shoring has been delayed substantially due to unfavourable weather conditions and a dispute with the excavation contractor which has now been replaced lost time will be made up". Mr. Fatemi agreed that he discussed these comments with Conecon and they were accurate. However, he said the financial institution advised Crown not to provide a delayed schedule to Conecon for financing reasons but still said the statements in the report were accurate. Mr. Fatemi also agreed that the photos on the last page of the Report accurately set out the state of the site. [52] The progress claim schedule attached to Progress Report # 6 shows Conwest as the trade contractor and estimates the cost and amount yet to be completed as 18.2 percent for excavation and 15 percent for shoring. This estimate was in part based on invoices provided by Conwest dated March 2, 2018; being $91,200 for excavation and $55,500 for shoring. Mr. Fatemi said additional monies were added to the estimate by Crown in this Report as Conwest

had left the job and Crown needed to replace the contractor. However, the numbers in the report were based on the invoices and Contract with Conwest. While Mr. Fatemi was not certain, he thought those numbers were generated by the Quantity Surveyor after it had visited the site. Mr. Fatemi again received the progress draw but Crown made no payment to Conwest for the March 2, 2018 invoices. [53] In my view, the Progress Reports entered in this matter are objective evidence that buttresses Conwest's claim. Progress Report #5 identified shoring as 65 percent complete and excavation as 53.9 percent complete as of February 5, 2018. The work then continued through to March 19, 2018. As a result, although dated May 2, 2018, Progress Report #6 indicated shoring was 85 percent complete and excavation 81.8 percent complete. This was prior to Mainland's work being completed on the Contract. Conwest's March 2, 2018, invoice which identified shoring and excavating as 80 percent complete with a cost to complete of $146,700 was utilized in Progress Report #6. Progress Report # 6 also indicated the residual contract values attributable to Conwest of $127,000 as representing the cost to complete these items. [54] While delay may have occurred in completing the work to this point, I conclude the work was close to 80 percent complete as argued by Conwest. [55] The filed invoices substantiate this

along with Mr. Grant's sign-offs mentioned above, which Mr. Grant said he signed to indicate work was completed. [56] Furthermore, in cross-examination, when Kyle Hamson, general manager for excavation and shoring for Mainland who completed the project, was pointed to the design drawings indicating the original heights of the shotcrete wall, he agreed that approximately 25 percent of the work remained. In particular, with respect to the east elevation, there were 4 feet left of a 21.8-foot-high wall; and 2.2 to 3 feet left of a 15.4-foot wall. With respect to the south wall, 3 to 4 feet of a 21-foot wall was left; 3 to 4 feet of a 16.9-foot west wall remained and finally, 4 to 6 feet of a 16-foot north wall remained. Mr. Hamson identified all shoring on the project as 100 percent complete by April 25, 2018. [57] All of this is compelling evidence that substantiates the fact that Conwest completed close to 80 percent of the work in the Contract by March 19, 2018. B. Who is responsible for the work not being completed by the stipulated deadline? [58] Pursuant to the Contract, the work was to be completed by January 24, 2018. Due to a variety of factors, this deadline was not met and work continued into March 2018. By that time, however, relations between Crown and Conwest had frayed, primarily because Crown had not paid invoices, including unpaid invoices provided by Conwest for

"extra" work required to meet the structural requirements of the Contract. As a result, on March 19, 2018, Conwest left the work site because of the unpaid "extras" invoices. On March 20, 2018, Crown gave Conwest notice that it was in default of the Contract and that it would terminate the Contract in five business days if Conwest failed to cure its defaults. On April 3, 2018, Crown purported to terminate the Contract, asserting that Conwest was in fundamental breach by refusing to complete the work. In response, Conwest argues the termination of the Contract by Crown was wrongful and in fundamental breach of the contract. [59] In this section, I address whether Conwest breached the Contract by failing to complete the work by the stipulated deadline, or whether unknown conditions caused the delays and the "extra" work is attributable to these unknown conditions.

1. Did Conwest encounter unknown conditions within the meaning of the contract? a) Unanticipated conditions [60] The real issue between the parties appears to be who was responsible for the delay caused by unfavourable soil conditions and/or weather. In addition, the question of "extras" arises because of the soil conditions, which resulted in the need for extra void filling. Conwest also says during the fill stripping process, it encountered miscellaneous and unanticipated rubble including concrete, household electronics, and other debris which prolonged the process as it needed to be sorted out and removed. [61] Crown says Conwest signed a fixed price contract and any extra work which arose because of soil conditions should be included in that fixed price. It says by signing the fixed contract, Conwest took the risk that the job would be more expensive than the fixed price it agreed to. [62] In my view, this argument that Conwest is taking the contract from a fixed price to a cost-plus contract does not adequately deal with the nuances and complexities of this case. [63] Conwest says that its tender bid specifically provided that any infilling of recessed anchors or voids, including additional shotcrete as a result of sloughing, would constitute extra work and were not contemplated when providing the quote. [64] As part of these issues, the terms of the Contract along with

the October 3, 2017, Conwest proposal signed by Mr. Ashti of Crown, are at issue between the parties. Appendix A and B of the Contract set out the scope of work and the documents relied upon. Appendix A references a GeoPacific soil/technical report dated September 18, 2017, that Conwest says was not provided and is not in its records. Rather, Conwest relied upon the soil report dated 2015. [65] In the 2015 soil report, GeoPacific noted the likelihood that the soil conditions on the site would present problems in the shoring process. Specifically, GeoPacific stated that while shoring is "feasible with conventional shotcrete with anchors some face-saving measures are likely to be required based on the cohesionless nature of the soils". Similarly, GeoPacific noted the face-saving measures likely to be required may include "plywood or spiles" and that "preliminary grouting of the soils in panels" may be required prior to excavation. [66] Conwest relies upon GC 6. 4.1 concerning "concealed or unknown conditions" and GC 5.8.1 of the Contract, which provides as follows: If because of climatic or other conditions reasonably beyond the control of the Contractor, there are certain items of work that cannot be performed, payment in full for that portion of the Work which has been performed as certified by the Consultant shall not be withheld or delayed by the Owner on account thereof, but

the Owner may withhold, until the remaining portion of the Work is finished, only such an amount that the Consultant determines is sufficient and reasonable to cover the cost of performing such remaining Work. [emphasis in original] [67] Conwest did not, however, provide notice in writing of "such conditions"--an example of a party in this lawsuit not following the contractual provision--yet seeking to rely upon it. I will, however, deal with this as part of my analysis in this case. [68] Whether the unfavourable soil conditions constitute "unknown conditions", within the meaning of the Contract, and whether climatic or adverse weather conditions caused delay, must be determined by examining the provisions of the Contract, the surrounding circumstances of the Contract and the work during the project. This is difficult to do without expert evidence, so I must take a common-sense approach to this question, and consider the evidence of the participants in this project. Furthermore, while the wording of the Contract itself is not conclusive on this point, the surrounding circumstances of the Contract are illustrative. [69] I turn first to the tender negotiations. I will then deal with the actions of the parties as the project progressed. b) Tender negotiations [70] Mr. Fatemi, a director and shareholder of Crown testified that Crown is a development company that buys property,

develops and sells it. Mr. Ashti is his partner. Crown is the parent company of Mountain Creations which is the project-specific company for the 6-storey project in the Lynn Creek area. [71] The construction planning process for this project began in July 2017 after the sales for the units finished. Crown procured working drawings from the architects and put tenders out to the trades for construction. This information was sent out to all trades asked to tender on the project. [72] On August 21, 2017, Mainland bid $980,400 as a fixed price for the excavation and shoring contract on the project. Crown invited other fixed price quotes for the excavation. Mr. Fatemi said Crown used a fixed price contract to ensure they knew the budget, as financial institutions and quantity surveyors would more readily accept these types of contracts prior to releasing financing. [73] John Marinelli, the owner of Conwest, attached the tender package from Crown and forwarded it to Alborz Moghadam, the estimator/project coordinator for Conwest on this project. On August 6, 2017, Mr. Marinelli and Mr. Cousins, Project manager/Estimator of Conwest, received an email from Mr. Moghadam with the technical documents, including geotechnical reports and excavation and shoring drawings from Crown. Mr. Moghadam reviewed the documents and provided an estimate of the cost of the work. [74] Mr. Moghadam said

Conwest looked at architectural plans to determine the top of the slab elevation, the thickness of the slab, the level below the slab and the thickness of the slab to determine the depth of the excavation. Crown also provided a soil report dated January 5, 2015, to Conwest. Mr. Moghadam said this was the only soil report received by Conwest and there was no indication of the ground water level concerns in that report. The water table was indicated to be at 6-6.5 feet. [75] Matt Kokan, a professional engineer and the principal of GeoPacific, testified in this matter. He indicated that the January 5, 2015, GeoPacific soil report provides a description of the sub-surface soils and ground water conditions. [76] Mr. Kokan hired a drill or auger to ascertain the soil properties, types, density; consistency and other aspects. Section 4.1 and Section 6.5 set out the soil conditions and refers to the lack of cohesion. In addition, while the report noted no groundwater encountered in the test holes, the report noted the proximity of Lynn Canyon to the west and the expectation that the ground water levels would vary seasonally with the water level in the creek as well as the precipitation rate. Kokan indicated this is one of the uncontrolled water sources on the North Shore so it was important to recognize the property was adjacent to the creek. [77] Cohesionless soils require face-saving

conditions and it was important to communicate that fact to individuals getting ready for the project. The soil is less stable and section 5 of the report attempted to communicate this information. The report said; Based on expected position of the water table, the construction of more than 2 levels of below grade parking would require special construction methods including a perimeter wall and cemented base slabs to control groundwater. [78] Section 6.5 of the report deals with temporary excavation, shoring, and dewatering and indicated "[s]ome face-saving measures may also be required due to the slumping of shoring panels that can occur in these soil conditions". [79] On September 7, 2017, Conwest sent its first proposal to Crown with a bid amount of $798,843. Crown and Conwest then arranged a meeting for September 29, 2017, to discuss the proposal. [80] Mr. Fatemi, Mr. Ashti, and Mr. Grant were present on behalf of Crown at the September 29, 2017, meeting. Mr. Moghadam and Mr. Cousins attended on behalf of Conwest. Conwest's quotation was reviewed at the meeting. Crown made a number of requests to Conwest, including that Conwest provide additional unit rates if there was a need to switch from ocean dumping to land dumping as Conwest's proposal was based on ocean dumping. Other requests included backfilling, switching to conventional anchors, and a discount of $5,000. [81]

Mr. Fatemi discussed the addition of backfilling to the scope of work with Mr. Marinelli, who agreed and the price was increased to $820,000. An email from September 29, 2017, confirmed the additions to the scope of work. As part of that, Mr. Fatemi said Conwest also included "ESC sump and swales, dewatering, nominal siltation control". [82] Conwest issued a revised proposal to Crown. It also sought and received a proposal from BelPacific for shoring on October 2, 2017. [83] The BelPacific proposal did not include allowance for infill of recessed anchors. The proposal also indicated BelPacific was not responsible for delays due to adverse weather. Finally, the proposal indicated it was based on a start day of October 23, 2017. [84] Conwest delivered a final proposal to Crown on October 3, 2017. This contained numerous clarifications arising from the September 29, 2017, meeting. In the email of October 3, 2017, from Mr. Moghadam to Crown, he said: Please find attached our updated quotation letter, with added credit wait for switching from IBO R32N Anchor to a conventional solid bar anchor. According to our shoring subcontractor, the design by GeoPacific with IBO's is appropriate considering the geology of the site, and they do not anticipate that many conventional anchors will be used on this job. [85] Mr. Fatemi said that he contacted the geotechnical advisors to ask if they

could switch to conventional anchors. They indicated, however, because of the geography and soil conditions, the R32N anchors were necessary for this project. [86] Mr. Cousins, on behalf of Conwest, noted that unit rate prices set out in the October 3, 2017, signed tender proposal were to be applied in the event Conwest ran into unexpected circumstances. [87] Importantly, I note on October 10, 2017, Mr. Ashti signed the proposal on behalf of Crown and sent an email to Mr. Cousins and Mr. Moghadam attaching the October 3, 2017, proposal along with his signature. In that email, Mr. Ashti advised that Crown would draft up the CCA Stipulated price contract for signature. [88] Mr. Fatemi said the standard form contract allowed Crown to essentially fill in the blanks of the parties such as the start and finish date, the price and appendixes or documents that were part of the contract. Mr. Fatemi made these changes and set out certain specifics in Appendix A and Appendix B. Appendix A listed the documents to be included and Appendix B set out the scope of work. In addition, general notes or conditions were included as parts of the Contract. [89] Mr. Fatemi indicated that Crown has its own general notes or conditions created based on years of experience in the construction industry. As a result, he said the October 3, 2017, clarifications set out by Conwest in their proposal were not

included in the standard form CCDC 2 contract. Rather, the general conditions, as set out in the signed contract, were included. [90] The Contract was signed on October 16, 2017. Mr. Cousins initialled each page in the Contract and Mr. Marinelli signed on behalf of Conwest. Mr. Ashti signed on behalf of Crown. While Mr. Cousins initialled each page, he said he did not notice the reference to a September 2017 soil report in Appendix A and this was an oversight on his part. Conwest had not received this report. [91] Ultimately, however, the question of whether the 2015 or 2017 soil report was reviewed by Conwest is not significant. The two reports are essentially the same and do not contain differences that would impact this case. In cross-examination, Mr. Moghadam was taken to and agreed that a paragraph in the later 2017 soil report indicating sloughing could occur was identical to one in the 2015 soil report that was disclosed to Conwest. [92] Additionally, on October 20, 2017, Mr. Moghadam of Conwest sent Mr. Ashti of Crown an email asking if Mr. Ashti could "please advise if [Crown was] okay with the following Schedule of Values, for billing purposes?" The Schedule of Values included billing rates for "Detail Excavation", "Slab Prep", and "Perimeter Backfill", among other things. Mr. Ashti replied to Mr. Moghadam on the same day, stating that the Schedule was "fine". [93] As

part of considering the surrounding circumstances, I note Mr. Fatemi said he only "filled in parts that needed to be filled in" (the standard form CCA Stipulated Price contract). Mr. Ashti, who was much more directly involved in both the contract negotiations and the day-to-day operations on the project, did not testify. [94] While it is convenient for Mr. Fatemi to indicate none of the previous discussions were pertinent because of Crown's general conditions term to that effect, the jurisprudence allows these circumstances to be considered to ascertain the mutual intent of the parties. In particular, Mr. Ashti signed the October 3, 2017 proposal. This signature concluded the negotiations and should be considered to inform the provisions of the contract. Further evidence of the circumstances will be reviewed as part of the analysis. [95] On October 20, 2017, Conwest entered into a CCA 19 Stipulated Price Subcontract with BelPacific to perform the shoring portion of the work on the Crown project. Conwest also says it provided the 2015 soil report to its BelPacific, who used it in preparing their bid. [96] Evidence from BelPacific is also pertinent to this issue. [97] Mr. Martinez, a professional engineer who was the project manager on this project for BelPacific during the relevant time frame, testified on behalf of BelPacific. Mr. Martinez prepared the project bid dated October

2, 2017. Amongst others, that bid notably listed exclusions including--the infill of voids, additional shotcrete, and unexpected soil conditions. Mr. Martinez said these are standard exclusions to ensure BelPacific did not assume the risk of unexpected conditions that they could not plan. If extras were needed for void filling, BelPacific would notify the client and the geotechnical engineer who works for the owner would review the site and provide a technical memo dealing with the infill of the void. BelPacific provided unit prices in its quote letter for standard items for material. Matters not covered in the unit price would be performed on a time and material basis. [98] BelPacific relies on these exclusions and clause 6.4.1 of the Subcontract which deals with unknown conditions. BelPacific says that clause 6.6.1 of the Subcontract sets out the process by which it could make requests for changes to the Subcontract price. It also says its changes were approved by Conwest either expressly or impliedly, which it says occurred by virtue of Conwest billing Crown for those extras. [99] Mr. Martinez said when quoting a price, he reviewed the design drawings for the shoring system and a geotechnical report. It is standard to bid the price based on the drawings as they specify the details needed to build the project. BelPacific prices its bid based on the drawings, which BelPacific

received from Conwest. [100] BelPacific quoted a price of $296,900, which was ultimately accepted by Conwest. The Contract reflected a price of $298,400, which Martinez says was likely an item that did not make a material difference to the Subcontract. While the bid quote was initialled by Mr. Moghadam of Conwest, a Conwest signature does not appear on the standard contract ultimately drafted and signed by BelPacific. However, the existence of the Subcontract is not in dispute. [101] Conwest says the unanticipated nature of the soil and adverse weather conditions resulted in a number of difficulties creating cost overages and safety issues. BelPacific encountered unanticipated excessive soil sloughing resulting in additional costs. [102] As noted earlier, the extras and delay in completion appear to be the heart of the issue in this case and has led to much dispute between the parties. I have noted the surrounding circumstances at the time the Contract was entered into to deepen my understanding of the mutual intent of the parties. I will also deal with the actions of the parties as the project progressed. [103] I conclude, however, that the delay and extra charges in this project arose largely because of adverse winter weather conditions, unanticipated soil conditions, and technical decisions and memoranda issued by GeoPacific, Crown's technical consultant, to deal with these

matters. Indeed the extra charges, along with the specific approvals are consistent with the changes directed by GeoPacific and clauses 6.3.6 and 6.3.9 of the Contract, which deal with change directives and require the contractor to keep records to establish the cost of work associated with those change directives. [104] While Mr. Fatemi sought to downplay the earlier communications and in particular Conwest's proposal of October 3, 2017, signed by Mr. Ashti of Crown on October 10, 2017, I conclude in a case of this nature where many of the contract provisions were not followed by either party, it is important that circumstances informing the understanding of the parties at the time of the Contract, be considered. As per Sattva Capital Corp., these circumstances can be used to "deepen a decision-maker's understanding of the mutual and objective intentions of the parties as expressed in the words of the contract": para.

57. I am cognisant, however, that these should not be used to rewrite the contract but rather to properly interpret the contract and reflect the mutual intent of the parties. [105] Conwest's October 3, 2017, proposal which sets out unit rates for shotcrete and face-saving measures, indicated that "no allowance for infill of recessed anchors or infill of voids with cementitious materials, including additional shotcrete as a result of ground sloughing, over-excavating, or large voids caused by cobbles and boulders" was made. It also indicated Conwest was not responsible for delays to schedule caused by adverse conditions, which may affect on-site operation. Finally, it noted "[t]hese clarifications are to be incorporated into the contract document upon acceptance of this quotation and in the event of conflict shall govern". [106] Mr. Fatemi took the position throughout that these previous discussions were not applicable as Crown had imposed it own general conditions in the Contract, including essentially the erasure of "all previous quotations, offers, discussions and correspondence". I note, however, that the proposal was signed by Mr. Ashti on behalf of Crown and cannot be dismissed as part of the negotiations. As noted earlier, the jurisprudence allows these circumstances to "deepen [the] decision-makers' understanding" of the mutual intention of the parties to the Contract,

as expressed by the words in the Contract. Indeed, the conduct of the parties, including seeking change orders and referencing unit rates lend support to the position of Conwest in this matter. [107] I turn to that now. c) Conduct of parties during the project [108] Mr. Moghadam was the project coordinator for Conwest on this project and reported to Mr. Cousins. He undertook the day-to-day tasks and would communicate with the site largely by email as and when issues arose. He would also prepare change orders and invoices to submit to the client. [109] Mr. Moghadam referenced a technical memo of November 8, 2017, issued for the building permit which set out six-foot horizontal lines which represent the spacing between each anchor. The six-foot vertical lines represent the spacing vertically between the anchors. There were three stages to the excavation. Reference was also made to the four-inch shotcrete wall, with one layer of mesh and one additional layer of mesh at the anchor. Shotcrete at the anchor was to be six inches. As the excavation was to be 16.9 feet, each stage would be roughly six feet. [110] GeoPacific issued a number of technical revisions during the project that impacted on extras. On November 28, 2017, GeoPacific issued a technical memo setting out some revisions. A further GeoPacific revision was issued on December 7, 2017. [111] The GeoPacific technical memo

dated November 28, 2017, reads as follows: We understand there is potential to use the area dedicated to the site office to extend the upper slope excavation to the north along Crown Street. Therefore the upper slope along the north elevation can be increase[d] to 8ft to 8.5ft. The lower row (Row 3) of anchors could be removed. To support the load we recommend increasing the length of the first and second row of anchors and increase the lock-off load to 28 and 36 kips, respectively. It shall be noted that the excavation at the PMT location shall follow the PMT detail and elevation. Contractor should install all the first row anchors below 10ft from the original and finish grade along the north side. The slopes shall be protected using poly sheet. Attached is the sketch of the changes. [112] A further GeoPacific technical memo dated December 7, 2017, which references the change on the north slope is a follow-up and says: [ ] We understand [the] developer is flexible to excavate the PMT area and backfill again, therefore the PMT area can be excavated up to 10ft below the existing grade, that will [result in] eliminating the upper row of tie backs and anchors at this section (Section A1). The slope shall follow the rest of the north shoring and can be extended to 10ft with 1H:1V. [ ] [113] Mr. Grant confirmed this follow-up direction was to save costs and eliminate one row of

anchors. This direction came from Mr. Fatemi of Crown. [114] Conwest suggests changes were made due to cost-saving measures that increased the challenges and I agree. These changes included those made on November 28 and December 7, 2017. Mr. Grant agreed these were because of cost-saving measures sought by Crown. [115] Problems arose on the site. The minutes for the site meeting of January 2, 2018, note in "New Business" at 1.6 that: Bel[Pacific] and Conwest to come up with a way to quantify face saving measures. Daily work order sheets are to come to the site trailer for signoff. [116] On January 18, 2018, Conwest, BelPacific, and Mr. Grant had a site meeting. As set out in Mr. Grant's site notes, the parties "discussed the method of quantifying overages in shotcrete for face savings. I will sign daily work orders with an audit being done at the end. Documented in Site Meeting #3". [117] Mr. Grant was adamant that this was the process to work through the extras. He said specifically that he did not sign the daily work orders as authorization for "extra" work but rather to indicate only that the work was done. [118] In the January 18, 2018 site meeting minutes, the response to quantifying face-saving measures is listed under "Old Business" at 1.6 and reads: Any extras will be done after the first row of shoring is complete. Bel[Pacific] was asked to forward all

backup. Jan[uary] 18 discussion is that we carry on with measuring the panels to bill monthly then an accounting will be done at the end of the shoring for any credits or debits as compared to the original quantities. Pictures and locations are to be recorded by Travis of Conwest. [119] "New Business" at 3.1 in the January 18, 2018 site meeting notes state "Face saving quantification" was Recorded in 1.6 in "Old Business" and set out above. [120] With the exception of whether these "extras" were authorized, this process was indeed followed. A method to quantify the work was agreed upon and instituted at the work site. [121] As a result of excessive sloughing, a change of work was ordered by two Technical Memoranda issued by GeoPacific, dated January 22 and 26, 2018. GeoPacific recommended that BelPacific reduce the height of the excavation panels to reduce sloughing and the need for extra shotcrete. GeoPacific issued a third memorandum on February 22, 2018, confirming the use and cutting of smaller panels. The original BelPacific estimate, however, was based on six-foot-high panels. The change resulted in additional costs for further shotcrete and increase in time spent shotcreting, resulting in an extension to the schedule of work. [122] Mr. Grant agreed in cross-examination, that the original shoring drawings called for a wall flush from top to bottom. He also agreed the

February 22, 2018 GeoPacific technical change reflected a design change. [123] The GeoPacific memorandum dated January 22, 2018, had also recommended that Conwest cut smaller panels to limit the sloughing and need for extra shotcrete. This memo was a recommendation to assist with efficiency. As set out under the "recommendations", the shotcrete should be limited to four feet to avoid additional costs. [124] Mr. Grant was asked about a site meeting on February 22, 2018, with Mr. Cousins, the purpose of which was to review the shoring installation. In his site notes, Mr. Grant refers to the report of Mr. Farshid Bateni of GeoPacific, which authorizes the contractor to cut smaller panels of three to four feet to control the voids, instead of the standard six feet. Mr. Grant agreed this approach was acceptable due to the ground conditions, face-saving measures, and void filling required. [125] Crown, by virtue of Mr. Grant or another Crown employee, measured the panels daily to check the depth of the work. [126] In order to quantify the extra work charges, Conwest also had to roughly measure the extra concrete to fill the voids from the sloughing of the banks. This was not an easy task, due to the rocky surfaces and nature of the task. However, Mr. Grant signed Conwest's extra work orders from January 6, 2018, to March 2018. Although, as Mr. Grant indicated, it was hard to quantify

in effect a 3D mould, Mr. Grant physically verified the work by measuring and quantifying at the end of the process. Once again, Mr. Grant said by signing he was not authorizing the extras but just verifying that extra work had been done and extra material had been used. [127] Steve Gaudette, BelPacific's superintendent, testified in this matter. Mr. Gaudette agreed in conversations with Mr. Martinez that he told him not to go with "full production" days due to the size of the site, weather issues from December to February, and the location of the site in North Vancouver. He did, however, say that the first stage of excavation went well and it was not possible at that time to predict that stages two and three would be more difficult. [128] BelPacific says, notwithstanding unfavourable ground conditions which caused delays, BelPacific had completed 85-90 percent of the work required under the Subcontract at the time that work was stopped at the site, excluding any extra time and/or materials that may have been required for infilling or to deal with poor soil conditions. It did so in accordance with the specifications set out in the documents provided by Conwest and in accordance with the memoranda issued by GeoPacific from time to time. [129] There is no doubt, however that BelPacific's work was delayed on this site. Sam Makinen, Conwest's general superintendent on the site,

detailed the problems with the ground conditions and with BelPacific's work. Mr. Makinen said he dealt mainly with Frank Harmon of BelPacific, but occasionally with Mr. Gaudette. He also confirmed all extra work orders were signed in the presence of Mr. Grant, the project manager for Crown. [130] Frank Harman, a senior foreman for BelPacific on the project, indicated sloughing and voids became a bigger problem as the work progressed. He testified to the need to measure the extra shotcrete required to fill the voids as he placed the order for shotcrete. While not exact, he would measure the voids by placing a tape measure into the cavity and taking a photograph of the measurement. Typically, to fill 360 square feet (i.e., a six by six-foot panel), he would order 3.6 to 4 metres of shotcrete. On this project, however, he found he was using 6.6 cubic metres total. As a result, between 2.6 and 2.8 cubic metres of extra shotcrete was regularly used. [131] While Mr. Harmon said conditions for the first stage were not too bad, by the second and third stage of the excavation, the six-foot panel size moved to three feet and extra shotcrete was required because of the sloughing to fill the voids. [132] At one point, there was so much standing water on the site, along with stability issues associated with the large voids that were appearing as the work progressed, that Conwest felt it

unsafe to proceed. While Crown says, there is no evidence there were safety issues, as WorkSafeBC was not called to the site, Mr. Grant's notes and evidence from the other witnesses confirm this such that it is sufficient to establish legitimate safety concerns. Similarly, the February 15, 2018 site meeting minutes reflect the "schedule has been pushed back a week due to water conditions in the excavation". [133] BelPacific points out that the 2015 GeoPacific soil report was included prior to BelPacific completing its bid. That report provided that some face-saving measures may be required due to the something of shoring panels that can occur in the soil conditions. While some specific face-saving measures were contemplated, the need for void filling and cutting smaller panels was not among them. [134] All of this in my view led to the delay and the need for extra shotcrete in this project. According to Mr. Moghadam's calculations, BelPacific had to use substantially more shotcrete than anticipated as early as January 6, 2018. While Mr. Kokan gave evidence that suggested that Mr. Moghadam's calculations of the theoretical volume of shotcrete required would have resulted in an underestimation, he also confirmed that such an underestimation would be on the order of 10 percent. Even adding 10 percent to Mr. Moghadam's calculation of the theoretical volume of shotcrete required,

BelPacific ultimately was required to use almost 2.5 times as much shotcrete as expected due to the need for void filling. BelPacific also points out that the volume of extra shotcrete claimed by Conwest, and by extension BelPacific, was approximately 91 percent of that which was actually sprayed as of March 2, 2018, as per Mr. Moghadam's calculation from March 23, 2018. [135] BelPacific maintains that the extras claimed were entirely consistent with assumptions set out in their quote, which contemplated extra shoring, including face-saving measures, sough prevention, and void filling, to be charged on a time and material basis. Those assumptions noted "face-saving and/or slough prevention measures will be extra to the contract" along with delays due to "unexpected soil conditions". [136] The evidence of Kyle Hamson, the general manager for Mainland was also useful. Mr. Hamson indicated Crown reached out and Mainland put a bid together to finish the work. Mainland had bid $980,400 on the original tender for the entire project. Ultimately, the parties agreed to a price of $463,300 (excluding taxes) for the defined "remaining work", which Hamson referred to as a lump sum bid/contract. The work was to commence on April 5, 2018, and finish on May 5, 2018. [137] Mr. Hamson also agreed there were ground water issues on the site and while he could not say if there was significant void

filling because of soil sloughing issues, "there was definitely void filling on that site". He agreed when Mainland priced the job there was a significant allowance for sloughing and void filling in the $120,000 allocated to the shoring system. He also noted Mainland pricing reflected the information in GeoPacific technical memo of March 29, 2018. [138] Mr. Hamson was clear that the bid and work was based on two GeoPacific technical memoranda dated March 28 and 29, 2018. The first noted in part: Purpose: Shoring Installation - North Elevation Revision Observation and recommendation: Based on our review of the site we understand the difference between the revised shoring design provide[d] in our memo dated Dec[ember] 7, 2017 with the existing shoring condition along the north elevation. The shoring revisions considered the maximum distance between the second row of anchors to the bottom of excavation to be between 5 to 5.5 [feet]. [H]owever based on our review and measurement from the 10[-foot] mark at the north shoring wall, we understand the difference between the second row and bottom of excavation is between 7.5 [feet] to 8.5 [feet]. [139] The GeoPacific technical memorandum dated March 29, 2018, with respect to the shoring installation review and remaining work set out an estimate of the remaining work for excavation and temporary shoring of the site. That memo referenced

the east, south, west and north elevations. Mr. Hamson was clear that Mainland bid the contract and the remaining work on the basis of these technical memoranda, in particular, the March 29, 2018 memorandum. He could not, however, indicate whether the volume of 2700 m³ of shotcrete specified in the GeoPacific memo that outlined the remaining scope of work was ultimately needed. [140] Mr. Hamson indicated the shotcrete work was largely finished by April 26, 2018, as reflected by the April 25, 2018, Mainland invoice and Mr. Grant's note dated April 26, 2018. Mainland did some extra work of which it invoiced in May 2018. [141] Ultimately, as reflected above, I conclude the changes in the technical memoranda that arose both because of cost-saving measures and to deal with the need for significant void filling arising from the soil conditions, exacerbated by the winter conditions, all led to the delay and extra charges in this matter. [142] While Crown took the position none of this could be attributed to Crown, the evidence of the technical changes both mandated by GeoPacific, at least one of which was for Crown's cost-saving measures, weakens that argument. Indeed, Crown said it would pay for extras provided the cost of those extras was substantiated. [143] I also note Crown says Conwest knew at the time it was negotiating, and ultimately entered into the Contract, that ground

conditions for the project would be challenging and that it was likely to encounter a variable water table due to proximity to Lynn Creek, thus requiring face-saving measures. This was reflected in the January 5, 2015, GeoPacific report and in the evidence of Mr. Gaudette who advised Mr. Martinez that his production numbers were "aggressive". [144] However, the difficulties were much more than could be anticipated from the soils report which did not differentiate on the basis of winter conditions. The evidence makes clear both the soil, the water levels, and the winter weather created a "perfect storm" of adverse conditions. [145] Mr. Marinelli, the principal of Conwest, who has been in the construction business for over 35 years, said he had telephone calls with Mr. Fatemi and/or Mr. Ashti when problems arose. In particular, he said he discussed the problems caused when certain debris and material were encountered in the excavation in December 2018 and January 2019. [146] In addition, discussions arose due to the extra work required from the challenging ground conditions. Notations in Mr. Grant's site minutes confirm difficult water conditions on-site, part of which can be attributed to the winter conditions, particularly in January and February. All of this contributed to unanticipated soil and other conditions on this project. [147] While Conwest did not provide written

notice as per clause 6.5.4, it was consistently in discussions both with Mr. Grant of Crown and GeoPacific as to how to deal with the delay. While clearly some face-saving and sloughing issues were expected to be encountered (and I do not have expert evidence before me explaining the expected face-saving and sloughing expected in such circumstances), the extent was unexpected, and likely exacerbated by the project being delayed by one month while it waited for the excavation permit--thereby moving the work into the winter months and adverse weather conditions. [148] I conclude therefore that Conwest was not responsible for the delay created by these conditions.

2. What other factors created the delay, to who were those delays attributable, and who is responsible for the resulting "extra" work? a) Work permit delay [149] I will deal briefly with the delay of the excavation permit for the project. While the original completion date was January 24, 2018, this was predicated on a start date of late October. [150] In mid-October 2017, Crown indicated to Conwest that they expected to receive an excavation permit from the District of North Vancouver within 1-2 weeks. The original excavation and shoring were scheduled to commence on October 25, 2017, but Crown did not have the excavation permit in place. The excavation permit did not arrive until November 24, 2017. While Conwest and BelPacific were able to undertake some preparatory work, they were not able to undertake the bulk excavation and shoring until November 24, 2017. On November 27, 2017, following the receipt of the permit Conwest and BelPacific began the excavating and shoring process on the site. [151] Conwest cannot be faulted for this delayed start. Indeed, Mr. Fatemi admitted this when he indicated Crown was only claiming three months delay, as opposed to four months. Accounting for this delay, the completion date would be postponed for one month--thereby being February 2018. Furthermore, while Mr. Fatemi expected the Foundation Permit to be issued by the end of February 2018,

it was not issued until close to the end of May 2018. b) Dewatering delay [152] High levels of groundwater during February 5-12, 2018, also resulted in a delay. Conwest was of the view that the level of water was unsafe for the workers. As a result, the site needed to be dewatered. The water levels at the site were restored on February 13, 2018, and Conwest resumed work on that date. [153] As will become evident later in this judgment, I have concluded the delay due to dewatering issues cannot be laid at the feet of Conwest. Crown took the lead on this issue and did not include Conwest in strategizing solutions. This was, to a certain extent, because the dewatering issues were significant, but no explanation, other than Mr. Fatemi had "lost faith" in Conwest, was provided. Conwest was not provided with the opportunity to deal to any great extent with this matter. C. Did Conwest breach the Contract by failing to complete the work by the stipulated deadline? [154] There is no dispute that following a series of meetings and telephone calls in March 2018, Conwest's principal Mr. Marinelli directed Conwest crews not to return to the job site on March 20, 2018. There is also no dispute of the fact that, as of that date, Crown had failed to pay Conwest's January 25, 2018, Invoice #12588 that was overdue in the amount of $201,096, and had failed to agree to pay an agreed upon $20,000

towards extra work payments. [155] Notwithstanding the conflict on the evidence as to specific discussions on March 19, 2018, there is also no dispute that Mr. Fatemi, one of Crown's principles, refused to sign off on a series of extra work orders for face-saving measures, despite being provided with detailed backup information on March 15, 2018. [156] With respect to the "extra payment claims", Crown says the work was not "extra" to the Contract but was a fundamental aspect of the scope of the work. Furthermore, despite demands, it said Conwest has failed to quantify the "extras" to explain how it fell outside the original scope of the work or to quantify the "extra" material and labour used. Crown also says the work was not duly approved in advance of being performed; nor was a price ever agreed for the work. [157] Mr. Fatemi said he was not aware of Mr. Grant signing off extra work orders until he received an email chain dated January 18, 2018. However, in that chain, Mr. Ashti had indicated that the extras needed to be signed off by the office. Mr. Fatemi indicated that the issue was not that extra work had to be done, but rather that there was no discussion before the work was done. If the extras were necessary and agreed, Crown would pay for them. It appeared, however, that the work had been done and invoices were simply sent to them. [158] By January 18, 2018, Mr. Fatemi

said Crown's satisfaction with Conwest was dwindling rapidly. Crown was receiving work orders for extras without consultation despite instructing the contractor that they needed to be engaged before the extra work occurred. In addition, Mr. Fatemi says Conwest was using Mr. Grant's signing of the work orders as authorization, despite knowing that Mr. Grant was not able to sign off or approve the extra work. [159] Mr. Grant said that he had signed the work orders only to confirm that the work was actually done. He did not sign to approve the extra work. Crown did not deny that extra work was done. Rather, Mr. Fatemi said Crown wanted to ensure the quantity and quality of the work. Mr. Fatemi noted the January 18, 2018 site meeting minutes reflected the process agreed to by the parties--the work would be done and the extras sorted out at the end of the job. [160] As noted earlier, however, a method to quantify was agreed upon between the parties and followed. All that remained was for Crown to review the backup material establishing the expenses and for that to be authorized and paid by the Crown. [161] On February 1, 2018, Conwest emailed Crown seeking approval of an extra associated with the delayed schedule and what they characterized as an overhead cost--being the cost of a labourer and the superintendent for the amount of $544 per day. However, Mr. Fatemi was of the view

this was again an addition to the Contract and was not "fair". [162] The site meeting minutes of February 15, 2018, then reflected a change in the shoring schedule. Mr. Fatemi indicated at this point they had gone past the fixed date of January 24, 2018, and they were definitely not happy with the progress to date. No one was pleased with BelPacific, and Conwest was therefore supposed to revise their schedule. Mr. Fatemi said he attended the site meeting. He indicated he had a cheque in his pocket for $447,000 for the January invoice. He addressed Mr. Cousins asking him if he knew the dates in the Contract for the completion of the shoring. Mr. Cousins became flustered and said, "if you come at us with stuff we can come back ten times more". Mr. Fatemi said he was taken aback and once he pulled out the cheque, Mr. Cousins calmed down considerably. Mr. Cousins indicated he was very disappointed with BelPacific. Mr. Makinen said that BelPacific should be fired but Mr. Cousins wanted to give them another chance. [163] On February 20, 2018--five days after this meeting--Mr. Moghadam emailed Mr. Grant and Mr. Fatemi, indicating he wanted a per-day price going forward, seeking approval to have a BelPacific crew on standby due to the dewatering issues, paid at a daily rate. Mr. Fatemi was of the view this was taking a fixed price contract and imposing time and material costs on top of

that fixed-price contract. On February 21, 2018, Mr. Fatemi received a change request by email indicating that Conwest sought to carry costs of $6,802.40 per day. [164] In that email from Mr. Moghadam noted: Please see below upcoming charges for Conwest and Bel[Pacific]'s crew time as a result of additional shotcrete days required due to poor ground conditions, and the inability to complete the entire third row of shoring in full panels. We have allowed 6 days to complete the third row of shotcrete, and extra charges will apply for days spent beyond what was allowed in our budget as per the attached FA notes. [165] Mr. Fatemi indicated he did not approve this charge and said he let Mr. Moghadam know in no uncertain terms that this was "a ridiculous charge". Mr. Fatemi indicated that this attempt to introduce a day charge for the work led to a break-down in trust. [166] On March 1, 2018, Crown and Conwest had a meeting to discuss extras at Crown's office. Crown claimed shoring extras up to February 15, 2018, of $48,596.84. At this time, the outstanding extras, accounting for credits, were $79,237.16. The change order in dispute dated February 21, 2018 related to "additional shoring days due to unforeseen ground conditions [smaller shotcrete panels as directed by the engineer] in the amount of $6802.40 a day". [167] While Crown agreed to the credits to be provided to it,

including credits for the fines associated with incidents involving Conwest and BelPacific, it did not agree to any of the extras claimed. This included an extra cost of $20,788.48 for the disposal of some peat from the site. While Crown did not disagree that the disposal of peat had occurred, Mr. Fatemi said Crown did not agree to pay for this, as they wanted to use it as "leverage" for the disapproval of the daily charge claim by Conwest. [168] These were not pleasant conversations. Mr. Fatemi indicated at the March 1, 2018, meeting, he produced the Contract that provided, with respect to extras, the contractor must finish its work and any disputes will be settled later. He told Mr. Marinelli of Conwest that this was the Contract and they "couldn't keep telling us that they would not be working". Mr. Marinelli replied that "I don't give a shit about the contract. I'll call my guys to get off the site if you don't approve the charges". [169] Mr. Fatemi said he was taken aback and backed off at that point. He told Mr. Marinelli he would have no problem approving the charges but needed to have the backup to the charges. As Mr. Marinelli insisted at least some of the extra charges being approved, Mr. Fatemi agreed to provide a $20,000 cash advance until the backup documents were provided. Crown and Conwest could then deal with the rest of the extra charge. Despite this agreement,

Crown did not provide the $20,000 cash advance. [170] In his testimony, however, Mr. Fatemi said he never told Conwest that Crown would not pay for extras for sloughing. Rather, he told Conwest that they wanted to pay as soon as possible once they obtained the backup material and explanation for the charges. [171] Crown says the extras were not at any time properly invoiced, quantified, or explained by Conwest. Crown's steadfast position is that the change orders, purported backup and ultimately invoices related to void filling were incorrect and this has been fully vindicated at trial. It says BelPacific and Conwest both inaccurately estimated shotcrete volumes based on the uniform four inches of shotcrete thickness. This area makes the related invoicing incorrect and Crown was fully entitled to refuse to pay. [172] Crown also asserts the outstanding and unpaid progress draws were not properly invoiced. Mr. Fatemi also says Conwest's invoice dated March 2, 2018, which indicates the shoring excavating was 80 percent complete was not accurate. Mr. Fatemi was more of the view that it was between 70 to 75 percent complete but decided not to dispute that at the time. [173] Mr. Marinelli of Conwest testified, however, that he attended a meeting on March 2, 2018, along with Mr. Cousins and Mr. Moghadam, with Mr. Fatemi and Mr. Ashti present on behalf of Crown. The discussion centred

on the extra work charges submitted by Conwest. In addition, the parties discussed the delay in schedule due to site conditions which required extra time with the soil collapsing and reduced panels. Mr. Marinelli noted while Conwest has been provided back up for the extra charges, nothing seemed to be acceptable to Crown. [174] On March 8, 2018, Conwest emailed Mr. Fatemi and Mr. Grant setting out a number of conditions for Conwest to continue its work on the site. Mr. Fatemi agreed to the conditions. That email reads: Clearly, the nature of the soils at this site is such that smaller panel sizes will still result in excessive soil sloughing and the need for void filling. We have proceeded with minimal panel sizes and placed only 4 inches of shotcrete as per Geo[P]acific's memo dated February 28th, leaving voids to be filled in at a later date by other forces, as requested by you in our meeting last Friday. Based on our site visit today, there is upwards of 16 inches of additional shotcrete required in some locations, leading to major safety and liability concerns. If we are to continue in this manner (4-inches of shotcrete, leaving large voids behind), we would like the following documentation in place prior to proceeding with any work: 1) Memo from Owner or Geo[P]acific stating that Conwest and its sub-trades will not be responsible for any damage to equipment or workers, loss of life, associated repair costs etc. in the event that there is a failure in any section of the shored walls.

2) Memo from Owner or Geo[P]acific stating that the North wall will support the weight of any loads placed on top of it, such as excavators, trucks, or other equipment, and that Conwest and its sub-trades will not be responsible if there is a failure in any section of the wall.

3) Letter from WorkSafe BC stating that the conditions are safe for continuing work in this manner[.] 4) Written approval from you accepting the charges outlined in the attached change request, sent to you on Feb 21st, to cover additional crew costs due to added shoring days as a result of smaller panels within the 3rd Row. Alternatively, if we are to continue void filling with extra shotcrete, we will need the following to continue any work: 1) Written approval from you that we will get paid for the additional shotcrete ordered, provided we present sufficient backup documentation[.] 2) Written approval from you accepting the charges outlined in the attached change request, to cover additional crew costs due to added shoring days as a result of smaller panels within the 3rd Row. As per your request, we will re-submit our claim for shoring extras up to February 15th to exclude extra rebar and wire mesh, and will exclude it from future claims as well. We are also waiting for Bel[Pacific] to provide backups for the extra shotcrete used, and will send to you shortly. Regards to the 23 days of delay you have noted, as discussed previously, 10 days were due to Bel[Pacific's] no show[s] and breakdowns, however the other 13 days were due to delays caused by ground conditions and use of smaller panels within the 2nd row, and standby due to dealing with groundwater/dewatering issues.

Given the fact that we are not charging you for crew costs associated with the added 13 days up to completion of the 2nd row of shoring, to account for the 10 days that we delayed you, we would like full compensation for added crew days for the 3rd row of shoring. The 6 days we had allowed for shoring the third row were used up by March 2nd, therefore Tuesday, March 6th and any shoring days going forward will be charged as per the attached. We anticipate there are 8-11 additional shoring days remaining, and an additional 24-33 m3 of shotcrete required for void filling (based on an average 3 m3/day extra shotcrete ordered to date). Please advise as to how you would like to proceed. [175] On March 9, 2018, Conwest set out further requirements to be met by 12:00 P.M. on March 10, 2018, in order for the Conwest crew to be back on-site by Monday. Mr. Fatemi had a lengthy telephone call with Mr. Marinelli on March 9, 2018, which he described as frustrating. He advised Mr. Marinelli repeatedly that Conwest needed to prove the charges, and the $6,800 per day charge was not acceptable. Mr. Marinelli repeatedly told Mr. Fatemi he must approve the $6,800 a day or Conwest would not continue work on the project. Mr. Fatemi told Mr. Marinelli that what he was asking was a breach of the Contract, and to put it in an email so he could have a look at it. [176] As a result, on March 9, 2018, Mr.

Moghadam sent the email setting out the concerns of Conwest and which Mr. Fatimi said he considered to be a breach of contract. That email reads: Ehsan, Please provide written approval for the following (response to this email is fine) in order for Conwest to continue shoring works, as per your phone conversation with John Marinelli earlier today: 1) Confirmation that Conwest will be compensated for additional shotcrete (beyond the designed 4 inches) that will be used for void filling, where necessary to achieve safety, quality and performance, as deemed satisfactory by its shoring sub-trade Bel[Pacific], provided we send you sufficient backup documentation for the material used. Extra shotcrete to be charged at $635.00/m3.

2) Confirmation that Conwest will be compensated for both Conwest's and its sub-trade's (Bel[Pacific]) crew costs as a result of added shoring days within the 3rd row of shoring due to reduced panel sizes, as directed by Geo[P]acific through memos sent to date. Payment to be on Time & Material, as per attached Force Account rates for Conwest and Bel[Pacific]. Conwest and Bel[Pacific]'s crew hours are to be documented on daily extra work sheets and signed by Gordon Grant (your site superintendent) on a daily basis, in order to confirm hours worked. All shoring days beyond Friday March 2nd, up to the completion of shoring, are to be included in this claim. Backup daily crew time sheets for March 6th (day of shoring) to be sent to Mountain Creations, and hours worked to be included in this claim. By confirming, you agree that Gordon Grant's signature is binding, and is considered to be approval of the extra hours worked and approval/ for payment, as if Principals of Mountain Creations (Ehsan Fatemi/Mani Ashti) had signed themselves. Please respond to this email no later than 12:00pm tomorrow, Saturday March 10th, in order for Conwest to resume work starting Monday morning (March 12, 2018), provided Bel[Pacific] can provide a crew on time. We have notified Bel[Pacific], and have been told verbally that they should be able to have a crew available for Monday, although it is not yet

confirmed. Furthermore, considering the fact that shotcrete may not be placed to design surfaces shown on the Geo[P]acific drawings, as void filling is to be minimized in order to avoid excess costs, Conwest will need a memo from Geo[P]acific stating that Conwest and its sub-trades will not be in any way liable for failure within any of the shored walls, and will not be responsible for damage to equipment, workers or any property as a result. You may submit this memo to Conwest by end of day Monday, March 12th. [177] On March 19, 2018, Mr. Makinen of Conwest brought the extra work orders with respect to the $6,800 a day charge to Mr. Fatemi's office. Mr. Fatemi said he had a lengthy conversation with Mr. Makinen, in which he advised Mr. Makinen that Conwest was breaching the Contract, and he would not be bullied into signing something he did not think was correct. Mr. Fatemi reviewed the excel spreadsheet provided by Conwest with Mr. Makinen, explaining his position. The spreadsheet from March 15, 2018 set out the extra shotcrete used by Conwest. Mr. Fatemi did not sign off, however, or agree to the extra work orders. [178] After this meeting, Mr. Makinen sent a text to Mr. Grant on March 20 at 6:53 A.M., which stated as follows: Gord, please be informed that we have shut down the job [due] to the extras not being signed. They will be no crew [on site] today. Thanks. [179] As a

result of this, Mr. Fatemi instructed his counsel to send a letter dated March 20, 2018, indicating that Conwest was in default of the contract and had five days to resolve that default. [180] As of March 19, 2018, Conwest had unpaid progress draws from January 2018 and had yet to be paid the promised $20,000.00 for extras on top of that. A substantial portion of Conwest's claim related to unpaid progress claims of $376,628.11, a portion of which had been funded to Crown by Progress Draws #5 and #6. Crown had, however, not distributed these funds in payment of Conwest's invoices. [181] While Conwest held off giving Notice of Default under the contract, it took certain steps to deal with this situation, including sending the text communicating it would not work unless the extras were signed. Indeed, Mr. Marinelli testified he did not need to be paid for the extras at this time but rather needed Crown's signature authorizing the extras so Conwest would be paid. [182] By now, Crown had not followed the procedure outlined in clause 5.8.1 of the Contract, which allowed the owner to withhold "until the remaining portion of the Work is finished, only such reasonable amount that the Consultant determines is sufficient and reasonable to cover the cost of performing such remain work". Crown did not use GeoPacific in this capacity under the Contract. [183] On March 23, 2018, Conwest sent

seven invoices and a number of change orders dated the same date to Crown. [184] On April 3, 2018, as Conwest had not remedied its default, Crown purported to terminate the Contract by a letter of the same date. [185] In my view, Conwest did not breach the Contract by failing to complete the work by the stipulated deadline of January 24, 2018. The delay in the excavation and shoring was not a breach so fundamental so as to constitute a repudiation of the Contract. [186] The matter had been delayed by one month by the late delivery of the excavation permit. The conditions were challenging--both with regard to the soil condition and the winter weather. Both Conwest and BelPacific were attempting to remedy the delay but these factors became challenging. GeoPacific issued technical memoranda both for efficiency and to deal with the difficult conditions on the site. Both Conwest and BelPacific worked with these changes. [187] As part of this, I conclude the extra work which was required to ensure the shoring, in particular, was necessary and properly completed. Void filling was clearly an issue and required extra shotcrete. While Crown could no doubt legitimately request "back-up" for the invoices, Conwest did provide extensive backup documents; being the invoices from the concrete company, the calculations as best could be done by an agreed process of January 18, 2018 between the

parties, the photos taken and the sign-offs by Mr. Grant to show the work was done. Conwest provided a spreadsheet to Crown setting out the extra shotcrete required for void filling. Conwest and BelPacific kept records in detail and provided them to Crown. [188] BelPacific maintained adequate backup for its claim for extras as reflected by the evidence adduced at trial. It had daily worksheets which recorded the extra volumes of shotcrete and other materials, it had concrete order slips confirming the volume of shotcrete, and had time and material charges from March 6, 2018, for extra shoring days on the third row after Conwest agreed to pay, as per Mr. Moghadam's email to Mr. Martinez on March 9, 2018. [189] Crown however repeatedly insisted this was not enough and refused to authorize or pay for the extras. This included payments due from the regular progress payments. This created the situation where Conwest felt compelled to leave the worksite until they were paid. Indeed, the progress draws had been already provided to Crown, who simply did not pay Conwest. In my view, Crown sought to impose terms that were unrealistic before it would make the payments it was obligated to make under the Contract for the work that had been done. [190] By doing so, Crown created an untenable situation and indeed appeared to be taking a contradictory position--even at trial. Mr. Fatemi said

Crown would pay the extras but seeks to argue this is a fixed contract and Conwest assumed the risk of the soil conditions. This fixed contract, however, allowed for legitimate extra work to be done and paid for, which does not turn it into a "cost-plus" contract. [191] Accordingly, I find that Conwest did not breach the contract and has made out its claim for payment of the work performed on the project up until the purported termination of the Contract by Crown on March 20, 2018, including the "extra" work, in the amount of $598,640.82, plus interest. [192] For the sake of completeness, I conclude this both on the basis of the contract and on a quantum meruit basis. [193] I now turn to whether Crown is entitled to have this amount reduced, on the basis of costs incurred by their replacement of Conwest with Mainland after the purported termination of the Contract. D. Did Crown lawfully terminate the Contract? [194] As noted above, the Contract contains specific provisions which set out the process which must be followed for Crown the affect termination. These provisions describe a multi-step process, which can be summarized as follows: Conwest must fail to complete the work or otherwise fail to comply with the Contract; · GeoPacific must provide a written statement to Conwest and Crown that there is sufficient cause for Crown to terminate the Contract; · Crown must provide

Conwest written notice that Conwest is in default of its obligations and allow Conwest five business days to rectify the default; and · if Conwest fails to rectify the default in five business days, Crown is entitled to terminate the Contract. [195] There is no evidence that GeoPacific provided the written statement required under the Contract, as described above. Accordingly, Crown did not provide proper notice of default per the terms of the Contract, thus failing to meet a clear condition precedent and rendering any purported termination under the terms of the Contract unlawful. [196] However, while Crown's purported termination does not have legal grounding in the terms of the Contract, there remains a common law right to terminate a contract in the case of repudiation: Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3 S.C.R. 423 at para. 40; Kuo v. Kuo, 2017 BCCA 245 at paras. 39-40. [197] In Guarantee Co. of North America, the Supreme Court of Canada described the doctrine of repudiation as follows (paras. 40, 44): Repudiation, by contrast, occurs "by words or conduct evincing an intention not to be bound by the contract. It was held by the Privy Council in Clausen v. Canada Timber & Lands, Ltd. [[1923] 4 D.L.R. 751], that such an intention may be evinced by a refusal to perform, even though the party refusing mistakenly thinks that he is exercising a

contractual right" (S. M. Waddams, The Law of Contracts (4th ed. 1999), at para. 620) [T]he effect of a repudiation depends on the election made by the non-repudiating party. If that party treats the contract as still being in full force and effect, the contract "remains in being for the future on both sides. Each (party) has a right to sue for damages for past or future breaches" (emphasis in original): Cheshire, Fifoot and Furmston's Law of Contract (12th ed. 1991), by M. P. Furmston, at p.

541. If, however, the non-repudiating party accepts the repudiation, the contract is terminated, and the parties are discharged from future obligations. Rights and obligations that have already matured are not extinguished. Furmston, supra, at pp. 543-44. The question, in light of the law as stated in Waddams, supra, and Fridman, supra, is whether the misrepresentation is "substantial", "material", or "goes to the root of" the contract. [198] Similarly, the B.C. Court of Appeal described the circumstances in which repudiation of a contract may arise in Kuo: [39] Termination by repudiation occurs when a party evinces an intention not to be bound by the agreement and the innocent party elects to accept the repudiation: Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3 S.C.R. 423 at para.

40. A fundamental breach of a primary obligation may also constitute a repudiation because it deprives the other party of substantially the whole mutually intended benefit of the agreement and thus amounts to a refusal to perform: Mantar at para. 11; Doman Forest Products Ltd. v. GMAC Commercial Credit Corp. - Canada, 2007 BCCA 88 at para. 109. [40] An intention not to be bound by an agreement may be evinced by words or conduct: Guarantee Co. at para.

40. Depending on the circumstances, this may include silence in response to a request for performance when and after the request is made. In some circumstances, a repudiation may be ongoing, which, unless the agreement is affirmed, provides the innocent party with a continuing right to accept it. However, regardless of how it manifests, the refusal to perform must be clear and unequivocal to amount to a repudiation: Dosanjh v. Liang, 2015 BCCA 18 at paras. 43-44; Doman Forest Products at paras. 108-109. [199] Accordingly, it must be determined whether Conwest (1) fundamentally breached a primary obligation, such that Crown was deprived of substantially all of the benefit intended under the Contract or (2) demonstrated an intention not to be bound by the Contract. [200] In my view, while Conwest did not fundamentally breach a primary obligation of the Contract, it did evince an intention to no longer be bound when it refused to complete the work. [201] Based on my finding of fact that Conwest had completed close to 80 percent of the work prior to the purported termination, I cannot say that Crown was "deprived of substantially the whole benefit" of the Contract when Conwest refused to continue work until the extras were approved. By the time the relationship between the parties had frayed to the point that Conwest left the worksite, Conwest had completed a substantial portion of

the work stipulated under the Contract. Conwest's actions did not constitute a breach of the Contract that was so fundamental as to constitute a breach which "goes to the root of the contract": Guarantee Co. of North America at para. 44. [202] However, I find that Conwest, both by words and conduct, demonstrated that it no longer intended to be bound by the Contract. [203] Conwest repeatedly sought to have Crown approve a daily lump sum amount to continue work on the project. Similarly, Conwest informed Crown that it would not send workers to the site unless the requests for extras were approved. This conflict came to a head on March 1, 2018, when Mr. Fatemi produced the Contract for Mr. Marinelli and indicated that Conwest must finish its work and any disputes with respect to extras would be settled later. He told Mr. Marinelli that this was the Contract and they "couldn't keep telling us that they would not be working". Mr. Marinelli informed Mr. Fatemi that he did not care about the Contract and would call his "guys to get off the site if [Mr. Fatemi did not] approve the charges". Shortly thereafter, on March 20, 2017, Mr. Makinen of Conwest informed Mr. Grant of Crown that Conwest had "shut down the job [due] to the extras not being signed" and would not send workers to complete the work. Moreover, after receiving notice of Crown's intention to terminate the Contract unless

the work was resumed, Conwest failed to respond or return to the worksite. [204] Conwest notes however that Mr. Grant changed the locks to the worksite on March 21, 2018, thus preventing Conwest from returning to complete the work. In my view, this fact is immaterial to the analysis, as Conwest provided no response to the notice of default which indicated any intention to return to work in any case. [205] While the relationship between the Crown and Conwest had broken down to such a point that the extras and change directives were not being approved in a fair and expeditious manner, this did not necessarily grant Conwest the right to unilaterally halt work on the project until the extras were approved. Rather, Conwest was required to fulfill its obligations under the Contract and seek payment at a later date, either through negotiations or through legal action. [206] Similar conclusions were reached in Hugh's Contracting Ltd. v. Stevens, 2014 BCSC 1904 and in 3027539 Nova Scotia Ltd. v. Mogon, 2002 NSSC 96 ("Mogon"). [207] In Hugh's Contracting, an owner and contractor reached a stalemate after the contractor claimed various costs for extras and refused to continue working on the project until payment was delivered. Justice Skolrood found that the contractor repudiated the contract when he "refused to compromise on his bills and to continue to work until he was paid [v]iewing

all these circumstances objectively, I find that [the contractor] repudiated the Contract by refusing to continue and that [the owner] was justified in accepting that repudiation and terminating the Contract": para. 111. [208] In Mogon, the contractor and homeowner became embroiled in various disputes, including the homeowner's right to choose finishing items, the cost of those items, delays in the construction, and the costs of extras. In the result, Justice Kelly similarly held that the contractor had repudiated the contract by refusing to continue unless its demands were met. He also noted a party may repudiate a contract when the party honestly believes it wants to continue with the contract to completion. The test is however an objective one. [209] While Crown did not specifically affirm or accept Conwest's repudiation of the Contract, it is my view that Crown's notice terminating the Contract is sufficient for such purposes. Direct communication of acceptance or affirmation of repudiation is not necessary. Rather, if the facts or context of the matter allow for a "fair inference of acceptance" of repudiation, the repudiating party can be taken as having actual notice: Brown v. Belleville (City), 2013 ONCA 148 at para. 46-48; BNSF Railway Company v. Teck Metals Ltd., 2020 BCSC 1133 at paras. 470-476; Kent v. Kalyk, 2017 BCSC 1074 at paras. 58-60. [210] Accordingly, I view Conwest's abandonment of the worksite and subsequent refusal to return as a repudiation of the Contract, which Crown was entitled to accept.

1. Is Crown entitled to the damages claimed and/or set-off against Conwest? [211] For Crown to be entitled to damages against Conwest for the costs incurred by hiring Mainland to finish the shoring and excavating work on the project, Crown must establish as follows: a. The Contract was legally terminated; and b. It sustained damages as a result of Conwest's breach. [212] As I have found above, Crown was justified in terminating the Contract following Conwest's repudiation. As set out in Heitzman, West and Goldsmith on Canadian Building Contracts, 5th ed., vol. 1 (Toronto: Thomson Reuters Canada)(loose-leaf updated 2021) at 8-27, if the repudiation is accepted then both parties are relieved from further performance of the contract but the innocent party may sue for damages for breach of contract or payment on a quantum meruit basis. Even though the parties are released from further performance of the contract by virtue of the termination of the contract after the repudiation, the contract may continue for other purposes. [213] While I have found Conwest repudiated the contract, I conclude by and large that Conwest was the "innocent party", but note aspects of the Contract may be pertinent to Crown's counterclaim or set-off in this instance. I have dealt with Conwest's claim and I now turn to whether Crown has established that it suffered damages or is entitled to a set-off as a

result of Conwest's repudiation [214] In the event that it is found liable to Conwest for the work performed on the Contract, Crown argues that any damages award should be a set-off against the extra costs it incurred by replacing Conwest with Mainland on the project. [215] Crown says it incurred significant costs completing Conwest's scope of work both in terms of the price of additional services and materials, but also the additional carrying and overhead costs such as financing intrastate management and consulting fees. The counterclaim totals $750,148.88, under various heads of damage. [216] In my view, Crown is entitled to a set-off based on Conwest's repudiation of the Contract. However, the question remains as to what amounts claimed by Crown are compensable against Conwest. I address each of the asserted heads of damage in turn. a) Replacement of Conwest with Mainland [217] The primary source of damages in Crown's counterclaim is the cost of replacing Conwest with Mainland after Conwest's repudiation of the Contract. [218] As noted above, Crown entered into a fixed-price contract with Mainland on April 4, 2018, to complete the outstanding work for $463,300 (excluding taxes). The Mainland contract stipulated that the work was to be completed by May 5, 2018. [219] In its counterclaim against Crown, seeks $486,645 in damages against Conwest for the cost of hiring Mainland

to finish the project. [220] Crown argues that the contract was terminated because of default by Conwest and relies upon clause 7.1.5.3 which provides that the owner can "charge the Contractor the amount by which the full cost of finishing the Work as certified by the Consultant " [221] Under this provision, while the owner has the ability to have the consultant certify what in the consultant's opinion the cost to complete the work would be, GeoPacific was not asked to nor did it place a dollar amount on the work required to finish the contract--i.e. a certificate as to cost has not been produced or undertaken. That certification costs, less the unpaid balance to the contractor, determines what could be charged under the Contract. [222] In my view, Conwest is not liable for the entirety of the amount paid by Crown to complete the Contract. This would put Crown into a better position than if the Contract had been completed. Rather, this sum must be reduced by the amount that Crown would have paid Conwest to finish the remainder of the work, as this amount was contemplated at the time the Contract was formed and would have been paid by Crown regardless. This outcome is specifically accounted for in section 7.1.5.3 of the Contract and is consistent with BG Checo International Ltd. v. British Columbia Hydro and Power Authority, [1993] 1 S.C.R. 12 at 25-26. [223] Conwest's invoice

dated March 2, 2018 indicates shoring and excavation was 75% complete with a cost to complete of $146,700. As set out in Conwest March 23, 2018 invoice, Conwest's claims 80% of the work was completed and the amount owing "to date" was $650,250. Measuring this amount against the contract amount of $820,000, the approximate cost for Conwest to complete the project was $164,750.00. I agree therefore at a minimum Conwest would be entitled to a credit of $164,750 (plus GST) against the cost to complete. Accordingly, Crown is entitled to a set-off of $298,250 under this head of damages, being the difference between the contract price with Mainland and the estimated cost of Conwest finishing work on the project. b) Damages caused by delay [224] Crown claims the following damages associated with the delays in construction: a) $78,750 for additional payments to Norvan Management Ltd.; b) $32,400 for additional salary to Mr. Grant; c) $58,042.23 for "additional financing costs". [225] Based on my finding that the delays were primarily caused by unforeseen climatic and soil conditions and that fault cannot be attributed to any individual party, Crown's claims for damages predicated on the delays cannot be sustained. Furthermore, the Crown has not established that there was a "trickle-down effect" on the overall project schedule which lead to compensable damages. I would therefore dismiss

the counterclaim for damages on these grounds. c) Dewatering [226] Crown claims $78,922.66 in damages relating to Conwest's alleged failure to provide dewatering services on the project. [227] Appendix B of the Contract provides that Conwest will provide "ESC Sump and Swales, dewatering, nominal siltation control". Crown relies on this provision and says responsibility for dewatering services were explicitly allocated to Conwest. Crown also notes that Mr. Fatemi discussed the addition of backfilling to the scope of work with Mr. Marinelli, who agreed and the price was increased to $820,000 during tender negotiations. As noted above, an email from September 29, 2017, confirmed the additions to the scope of work. [228] Conwest denies that it was responsible for dewatering pursuant to the Contract. Conwest argues that the scope of dewatering was not accounted for in the Contract, and was therefore not Conwest's responsibility. It maintains that GeoPacific's investigation report dated January 5, 2015, noted that groundwater was not encountered at test holes and therefore Conwest did not allow for pumping groundwater in its bid for work. The groundwater level was 4'3" higher than what was set out in the report. The delay resulting from the dewatering process resulted in standby charges incurred by BelPacific amounting to $8,160. [229] Conwest notes that this provision only provides

for one ESC Sump and "nominal siltation control", that the value allocation approved by Crown in October 2017 Schedule of Values only provided $10,000 for dewatering services, and the evidence that the "industry standard" was for shoring and excavating contractors to only deal with "surface run-off" for the purposes of dewatering. [230] In addition, when dewatering issues arose, Mr. Marinelli of Conwest said he "tried to explain to Mr. Fatemi or Mr. Ashti that dewatering is not included in the bids as the company would not know at what level the issue would arise". It is "common industry practice" to exclude this as part of the bid and if issues arise they are dealt with at the time. [231] I agree. The additional terms agreed to in Appendix B for "Esc Sump and Swale, dewatering, nominal siltation control" were noted by Mr. Cousins as "industry standard" and intended only to deal with surface runoffs. This was consistent with the evidence of both Mr. Grant of Crown and Mr. Hamson of Mainland. [232] Furthermore, Mr. Ashti initiated contact with Quantum Murray and Canadian Dewatering in November 2017 to contract for dewatering equipment and services. While Mr. Fatemi says by that time it was obvious that Conwest was not doing the job and Crown had no choice but to get someone else, Conwest was excluded from key discussions, including one concerning on-site dewatering held on

February 8, 2018, between Crown, Quantum Murray, GeoPacific and others engaged in dealing with the dewatering issue. [233] Accordingly, I allow no claim or set-off to Crown for dewatering services on this project. d) Backfilling [234] Crown claims $33,706.61 in damages against Conwest for backfilling services provided after the Contract had been terminated. Crown asserts backfilling was included under the Contract and was Conwest's responsibility. After the Contract was terminated, therefore, Crown argues that Conwest is liable for the cost of replacing its backfilling services, on the grounds that this would put Crown into the position it would be had the Contract been completed. [235] Conwest denies liability under this head of damage. Conwest argues that backfilling charges should be considered with regard to the work provided by Mainland. Likewise, Conwest asserts that Crown's witnesses with knowledge of these claims did not attest to them. [236] Appendix B of the Contract states that Conwest would provide "[b]ackfill for perimeter slopes". [237] However, Mr. Fatemi discussed the addition of backfilling to the scope of work with Mr. Marinelli, who agreed and the price was increased from the bid of 798,843.00 to $820,000. In an email from September 29, 2017, Conwest confirmed the additions to the scope of work. [238] The addition however noted that Conwest would use "fill"

or material from the site. Providing the "fill" itself was not part of the contract. Backfill is not listed as part of the Contract in the Schedule of Values. [239] Furthermore, services took place 10 months after Conwest left the site and cannot reasonably be considered as a set-off in this matter. [240] Accordingly, I allow no claim or set-off to Crown for backfilling services on this project. e) Fines [241] Crown claims $8,500 in damages from the fines levied by the District of North Vancouver. Crown argues these fines were caused by Conwest and/or BelPacific's failure to observe District bylaws relating to trucks on municipal roadways and noise violations. [242] Conwest incurred three separate fines on this project. On December 5, 2017, the District of North Vancouver assessed fees of $1,500 for Conwest trucks tracking mud on the roads and $3,000 for staging trucks on the roads. [243] On January 30, 2018, the District of North Vancouver again imposed a fine or specialty fee, in this case, $5,000 for a noise violation. A Conwest or BelPacific crew had been on site outside the approved work hours, thus warranting the fine. [244] Conwest does not deny responsibility for the fines. Rather, Conwest argues they should be set off, as was agreed by the parties on March 1, 2018. [245] I agree. The evidence shows that Conwest and Crown agreed to credit the fines against the extras claimed by Conwest. The fines are therefore already accounted for in the damages sought by Conwest. I would not make any award under this head of damage. E. Is BelPacific entitled to damages against Conwest for the work provided under the Subcontract?

1. Did BelPacific breach the terms of the Subcontract? [246] BelPacific, the subcontractor enlisted by Conwest to complete the shoring on the project, claims damages against Conwest for its unpaid work. BelPacific argues that while it was not able to complete all of the work prior to Crown's termination of the Contract, this was due to the conflict between Crown and Conwest and fault cannot be attributed to it. [247] While both Crown and Conwest lead evidence that BelPacific's work was at times subpar, my earlier finding that Conwest did not fundamentally breach the terms of the Contract by failing to meet the stipulated deadlines applies with equal force to BelPacific. As I explained with regard to Conwest's performance on the project, the conditions were difficult and the parties made due given the circumstances. Most of the delay in the project was not attributable to any particular party. [248] Nonetheless, Conwest listed a number of alleged failures by BelPacific in response to its claim. I will deal with each in turn. a) Quality of work and delays associated with BelPacific [249] There was considerable evidence concerning the pace of work by BelPacific. BelPacific argues while some delays were within its control, in large part they were not. [250] Mr. Harman of BelPacific however, identified issues with equipment breakdown in November and December 2017 and instances where

Conwest was not on-site to assist with pipe piles. In cross-examination, when taken to specific instances, he agreed that in November 2017, BelPacific was not able to be fully productive on 16 of the 22 workdays (i.e., 70% of the time). In December 2017, BelPacific was unable to be fully productive on 10 workdays. Problems continued in January and February 2018. [251] In late March 2018, at the request of Conwest, Mr. Martinez prepared a summary of working days on the project. The summaries of working days were compiled from timesheets prepared by BelPacific's foreman and Mr. Grant's notes. Those summaries indicate that in addition to November 27, 2017, a total of six full days, being 2 ½ days and a small or unspecified number of days were lost due to delays for reasons that could have been within BelPacific's control, resulting in a total of 11 days of delays. BelPacific points out, however, it also worked five Saturdays, notwithstanding that weekend work was not anticipated under the Subcontract definitions. b) Crew availability [252] BelPacific agrees that there were six days where it had no crew on site and one day where it had a limited crew on site. One of these days, however, was a preplanned training day of which BelPacific had given Conwest at least 30 days' notice. BelPacific made up five of the missed days by having crews work on weekends not provided in the

Subcontract. BelPacific also had more than its usual crew complement on at least 15 days. With respect to Mr. Grant's evidence and notes that BelPacific crews were at times idle, BelPacific points to the sequential nature of shoring (i.e., anchors could not be drilled until excavation had taken place, and the delivery schedules of concrete suppliers). c) Equipment quality and maintenance [253] The often sub-par quality of the equipment utilized by BelPacific on the project was noted at various times in these proceedings. For example, Mr. Grant testified that BelPacific had regular equipment breakdowns and worked short days. Mr. Grant said it was a very busy time and BelPacific sent old equipment from the yard which did not appear to be well maintained. Likewise, Mr. Harman of BelPacific identified issues with equipment breakdown in November and December 2017. [254] By the time Conwest left the site, BelPacific had accepted it was responsible for 11 days delay due to equipment issues and crew shortages. However, it says delays were also attributable to other factors. This included the delay in the excavation permit; the condition of the soil including its peatiness; and containing concrete and wood debris; and the sloughing and dewatering issues.

2. To what extent did BelPacific complete the scope of the work provided for in the Subcontract? [255] To date, Conwest has made payments to BelPacific in the amounts of $84,596.40 and $56,397.60, leaving a balance of $238,763.70, inclusive of holdbacks and GST. BelPacific says it is also owed contractual interest in the amount of $37,700.30, in accordance with Article 6.5 of the Subcontract. [256] BelPacific sets out a calculation which it says leads to the conclusion that 95 percent of its work was completed. While I do not agree with this calculation, I do find that BelPacific completed a substantial amount of the work and is entitled to damages against Conwest under the Subcontract. [257] As noted above, I found that Conwest completed close to 80 percent of the work under the Contract prior to Crown's termination of the Contract. This finding applies with equal force to BelPacific. Accordingly, I BelPacific is entitled to the outstanding balance owed to it from its work on the project. [258] For its work, BelPacific rendered five invoices to Conwest: a. on November 24, 2017, for $93,996, $84,596.40 of which was paid; b. on December 21, 2017, for $62,664, $56,397.60 of which was paid; c. on January 26, 2018, for $62,664, none of which was paid; d. on February 26, 2018, for $78,138.11, none of which was paid; and e. on March 29, 2018, for $82,295.59, none of which was

paid. [259] The outstanding amount, therefore, is $238,760.70. This amount must however be reduced by the days that BelPacific agreed it was responsible for the delay. Based on the schedule provided by Mr. Martinez of the loss of at least 10 days for which BelPacific takes responsibility and the testimony concerning a certain number of partial days, I conclude this amount should be reduced by 15%. Accordingly, BelPacific is entitled to recover $202,946.59 from Conwest, excluding contractual interest. [260] While I have concluded a large part of th delay on this project cannot be attributed to any one party, I conclude BelPacific was particularly responsible for specific parts of the delay associated with equipment failure and other matters - which it has taken responsibility for. I have therefore reduced the amount owing from Conwest to BelPacific by the above amount. [261] BelPacific says the interest is $47,936.63, as calculated per clause 6.5 of the Subcontract, but the Court may wish to direct that, if the parties are unable to agree, this matter can be directed to the registrar. I agree that this matter and any other interest payments be directed to the registrar unless the parties are able to agree on the respective amounts.

3. Is BelPacific entitled to a lien against the lien bond posted as security by Crown? [262] BelPacific argues it is entitled to a declaration of a lien against the lien bond posted as security pursuant to the Builders Lien Act, S.B.C. 1997, c. 45 ("BLA") by Crown and the holdback funds retained by Crown. [263] On April 18, 2018, BelPacific filed a lien against the property on which the project was located. On April 27, 2018, Crown posted a lien bond of $556,540.82, which was to stand as the security for any lien claims against the property. At this point, BelPacific's lien registered against the property was cancelled. BelPacific argues that it is entitled to either a declaration of lien against the lien bond in the amount of $238,763.70 and the holdback retained by Crown from Conwest. [264] Crown denies that BelPacific is entitled to a lien against the lien bond, on the basis that BelPacific failed to comply with the provisions of the BLA. In the alternative, Crown argues BelPacific is not entitled to a lien in the amount claimed. Rather, Crown argues that any lien held by BelPacific over the lien bond can only amount to 10% of the value of the work performed by BelPacific on the project, per ss. 34 and 37 of the BLA. Accordingly, Crown argues that the total amount BelPacific can claim is $25,201.15 (exclusive of taxes). Likewise, Crown says its total holdback obligation, at

most, would be approximately $53,837. [265] For its part, Conwest argues BelPacific is not entitled to a lien, as it has failed to comply with the provisions of the BLA. If BelPacific is entitled to a lien, Conwest argues that it is not entitled to the amount claimed. Moreover, in the event that I grant BelPacific's request for a declaration of lien, Conwest also argues that this judgment must differentiate between the in rem lien judgment and the in personam judgment for damages. Conwest says that the in rem lien judgment is capped by the statutory maximums in the BLA, whereas the in personam judgment is not. [266] I would grant BelPacific's request for a declaration of lien in rem against the lien bond in the reduced amount of $202,946.59, inclusive of the statutory holdback. In my view, the maximum aggregate amounts available under the BLA are not in excess of the amounts owed to BelPacific, and they are therefore entitled to the relief sought. [267] The relevant sections of the BLA provide as follows: 4 (1) The person primarily liable on each contract, and the person primarily liable on each subcontract, under which a lien may arise under this Act must retain a holdback equal to 10% of the greater of (a) the value of the work or material as they are actually provided under the contract or subcontract, and (b) the amount of any payment made on account of the contract or

subcontract price [ ] 5 (1) Subject to subsection (8), an owner must (a) establish at a savings institution a holdback account for each contract under which a lien may arise, (b) pay into the holdback account the amount the owner is required to retain under section 4, and (c) administer the holdback account together with the contractor from whom the holdback was retained [ ] 34 (1) The maximum aggregate amount that may be recovered under this Act by all lien holders who claim under the same contractor or subcontractor is equal to the greater of (a) the amount owing to the contractor or subcontractor by the person who engaged the contractor or subcontractor, and (b) the amount of the required holdback in relation to the contract between the contractor or subcontractor and the person who engaged the contractor or subcontractor. (2) For the purposes of subsection (1) (a), (a) an amount claimed by way of counterclaim against a contractor or subcontractor by the person who engaged the contractor or subcontractor does not reduce the amount owing to the contractor or subcontractor by that person [268] A lien is a right in rem which is only available where there is property to which it can attach: Wah Fai Plumbing & Heating Inc. v. Ma, 2011 BCCA 26 at paras. 67-72. While BelPacific's lien on Crown's property was cancelled when Crown posted the lien bond, that does not fundamentally

change the nature of the claim. As Justice Wedge stated in Greater Vancouver Sewerage and Drainage District v. A-Millenia Construction Ltd. et al., 2006 BCSC 1629 at para. 25 ("Vancouver Sewerage"): The effect of posting the lien bond in this case is that the registered lien claim has been cancelled and the land as security for the claim is replaced with the security posted in court. However, the claim remains a claim against the land. Cancellation of the lien does not alter the character or nature of the lien, and the claim as a matter of substance remains an action in rem. Whether the entity posting the security in court was the owner of the property or some entity in the chain of liability under the Act, (in this case the contractor), is irrelevant in the sense that it does not alter the nature of the lien claim itself. [emphasis added] [269] Likewise, Justice Wedge went on to cite the Ontario Superior Court of Justice decision in James Dick Construction Ltd. v. Durham Board of Education (2000), 50 O.R. (3d) 308, stating at para. 26: [W]here such security is deposited, the effect is not to entitle the lien claimants to the entire amount of the claims out of that security irrespective of other provisions of the statute. Rather, payment to lien claimants is restricted to the amount fixed by the Act for a payor's liability. Where lien claimants are of the same class as having

been engaged by the same contractor, they are only entitled to their prorated share of the lien holdback. [emphasis added] [270] This is matter is not a case like Vancouver Sewerage, where the value of lien bond far exceeded the owner's holdback liability. In fact, the opposite is true: the holdback amount is substantially less than the amounts owed to BelPacific and Conwest, respectively. [271] Accordingly, the lien amount payable to BelPacific "is restricted to the amount fixed by the [BLA] for [Conwest and Crown's] liability": Vancouver Sewerage at para.

26. Likewise, "[t]here was no intention by the legislature to draw a distinction between the liability of the owner and contractor or subcontractor, or the rights of lien claimants who are claiming against any of these entities": Vancouver Sewerage at para. 30. [272] As stated in s. 34(1) of the BLA, the maximum amount that may be recovered by BelPacific in the present case is the greater of the amount owing to the subcontractor and the amount required to be held back in relation to the Subcontract. In this case, the greater amount is the amount owed for the unpaid work, as the required holdback is approximately between $25,000 and $55,000. [273] Accordingly, BelPacific is entitled to a declaration of lien in rem against the lien bond in the amount of $202,946.59, inclusive of the statutory holdback. This is concurrent to the in personam judgment granted to BelPacific against Conwest, in the amount of $202,946.59, plus interest. VI. Summary [274] In conclusion, I set out a summary of the amounts owing as follows: 1. Conwest's claim for unpaid work on the project, including extras, is allowed with both an in personam award and in rem award against the lien bond of $598,640.82, plus interest calculated in accordance with the contract.

2. Crown's counterclaim against Conwest for the cost of replacing Conwest with Mainland is allowed, with an award of $298,250. This is to be set off against Conwest's aforementioned award against Crown. Crown's counterclaims for damages arising from delay, dewatering, backfilling, and fines are dismissed.

3. BelPacific's claim against Conwest for unpaid work is allowed, with an in personam award of $202,946.59, plus interest. Concurrently, BelPacific is granted a declaration of an in rem lien of $202,946.59 against the lien bond.

4. If the parties are unable to agree on the respective applicable interest amounts, this issue is to be set before the Registrar. [275] Finally, if the parties are unable to agree on costs in this matter, an application can be filed to deal with that matter, provided it is filed within 60 days of this judgement. "Burke J."