Frank E. Illsley Woodworking Ltd. v. D & M Lightfoot Farms Ltd.

Frank E. Illsley Woodworking Ltd. v. D & M Lightfoot Farms Ltd. Court Supreme Court Date 2004-01-26 Citation 2004 NSSC 40 Docket SK 8898 Judge/Registrar/Adjudicator Boudreau, Allan (Honourable Justice) Document Type Decision Decision Content IN THE SUPREME COURT OF NOVA SCOTIA Citation: Frank E. Illsley Woodworking Ltd. v. D & M Lightfoot Farms Ltd. 2004 NSSC 40 Date: 2004/01/26 Docket: SK No. 8898 Registry: Kentville Between: Frank E. Illsley Woodworking Limited Plaintiff v. D & M Lightfoot Farms Limited; and Roscoe Construction Limited Defendants DECISION Judge: The Honourable Justice Allan P. Boudreau Heard: December 6, 9, 10, 11, 12, 2002, April 28, 29, 30, May 1, 5, 2003, at Kentville, Nova Scotia (Final written post trial submissions received June 2, 11 and 18, 2003.) Written Decision: January 26, 2004 Counsel: R. Peter Muttart, Q. C. and Tom MacEwan, for the plaintiff Patrick J. Saulnier and Leroy Lenethen, Q.C., for the defendant, Roscoe Construction Limited The defendant, D & M Lightfoot Farms Limited, did not take part in this trial, the mechanic’s lien against its property having been previously vacated. INTRODUCTION: [1] This case involves the respective obligations or responsibilities of general contractors and sub-contractors when it comes to ascertaining the specifications for specialized components in the construction of farm buildings. The defendant, Roscoe Construction Limited (“Roscoe”), contracted to construct two large egg laying barns for D & M Lightfoot Farms Limited (“Lightfoot”). One barn, 70 feet wide by 400 feet long and another, 70 feet wide by 200 feet long. The construction of theses barns required the design and manufacture of 70 foot wide trusses to support the roof of each building, plus any other forces or weights which may be required to be supported by the trusses. Frank E. Illsley Woodworking Limited (“Illsley”) supplied the trusses for the construction. [2] Identical trusses were designed for both barns. The trusses for the 400 foot long barn were fabricated first and delivered to the site, accepted and partially erected before some collapsed. In the meantime, the 68 trusses for the 200 foot barn had also been delivered. While the cause of the collapse is not in issue in this trial, it was thereafter realized that the trusses, as designed, would not be able to accommodate or support the loads, primarily equipment, which Lightfoot intended to hang from the trusses. New trusses were designed to accommodate the intended weights or loads and these were also supplied by Illsley. The replacement trusses were more costly than the originals. Roscoe has refused to pay the additional costs of the redesigned trusses or the cost of the first set which could not be used as designed. Roscoe and Illsley blame each other for the inadequate design of the first set of trusses, claiming it was the other party’s responsibility to ascertain any additional loads, beyond the roof itself, which would be supported by the trusses. [3] Illsley has now sued Roscoe for payment of the first set of trusses for the two barns, and for any unpaid portion of the second set of trusses. Roscoe had also counterclaimed, as set off, the cost of removing the partially erected first set of trusses and for installing the second set, but this cost appears to have been covered by an insurance payment which Roscoe received as a result of the collapse. FACTUAL BACKGROUND: [4] Lightfoot wanted to have two large chicken barns constructed for its egg laying operations. It contacted Roscoe, a general contractor, in early 1999 to see if Roscoe was interested in bidding on the site preparation and the building construction aspects of the project. Lightfoot would be acting as its own general contractor with regard to the plumbing, electrical and equipment aspects of the project. Roscoe decided to bid on the construction of the buildings. In order to prepare its bid, Roscoe requested estimates or quotes for roof trusses from Illsley. Illsley had been engaged in the design and construction of wood roof trusses for many years and had supplied trusses to Roscoe on prior occasions. [5] Roscoe had retained the services of a professional engineer, Thomas Harris, to design the buildings and to stamp the plans to indicate they were approved for construction. Mr. Harris worked on-site at Roscoe’s offices where Roscoe drafted the drawings for Mr. Harris to review. He was to make any required changes and to stamp the plans with his professional insignia when the plans met with his approval. [6] Although Roscoe had retained the services of Mr. Harris to approve the design of the buildings, he was not retained to design the roof trusses. Roscoe contacted Illsley for this purpose. Roscoe requested several quotes from Illsley in February of 1999, for various spans and types of trusses. This was primarily to allow Roscoe to bid on the Lightfoot project. Frank Illsley, the president and owner of Illsley, attended at Roscoe’s office and he was shown drawings for the Lightfoot project. It is common ground that Illsley was not told of the loads, other than supporting the roof, which would have to be born by the trusses. In fact, Roscoe did not make any efforts to ascertain or calculate these loads until after the collapse of a portion of the first set of trusses. Mr. Illsley did not inquire if the trusses were to support anything but the roof of the structure. As a result, the first set of trusses were designed for the minimum load requirements, ie. 4 pounds per square foot, on the top and bottom chords, to be spaced at 36 inch intervals. This design, at 36 inch intervals, could not support the roof and wind loads plus the equipment which Lightfoot intended to hang from the roof trusses. [7] Lightfoot intended these barns to be state of the art egg laying operations with a good portion of the equipment hanging from the ceiling for ease of cleaning and maintenance. It was only discovered after part of the trusses collapsed on the first barn that the trusses as designed and installed at 36 inch intervals would not accommodate the loads required for the Lightfoot project. The collapse is not relevant to this action because the original design or manufacture is not in any way alleged to have been a factor in the collapse of the first set of trusses. However, by this time Lightfoot had become very skeptical about the design and strength of the original trusses. The evidence establishes that the first set of trusses, as designed, could have carried the intended loads, but only if they were spaced at 24 inch intervals, and not 36 inches. Lightfoot was not willing to accept trusses at 24 inch intervals, nor could it be required to do so contrary to its contract specifications. Therefore, new trusses had to be designed and manufactured to meet the contract building specifications and to carry the intended loads. [8] In order for new trusses of adequate strength to be designed, Roscoe had to ascertain the actual top and bottom chord loads to which the trusses would be subjected. It did this by ascertaining from Lightfoot the equipment to be supported and by calculating the loads which would be created by a knee brace which was to be part of the original design. These calculations were computed by the engineers which Roscoe had retained after the partial collapse of the first trusses. The anticipated loads were then conveyed to Illsley and new trusses were designed. It should be pointed out that Illsley does not approve the design of trusses. This is done by Illsley’s supplier of metal truss components, Alpine Systems Corporation (“Alpine”), based in Ontario. A computer program produces an initial design based on information provided by Illsley. This is initially done by Illsley and forwarded to Alpine. Alpine engineers review, approve and stamp the design, if found to be acceptable. Illsley then fabricates the trusses based on the designs approved by Alpine. [9] In this case it is common ground that the original truss design, spaced at 36 inch intervals as required by the contract specifications, could not accomodate the loads which would be created by the equipment which Lightfoot intended to hang from the trusses. There was a significant amount of evidence presented to show that the trusses as originally designed and manufactured could or could not support the roof, wind, and knee brace loads at 36 inch intervals. There was also a significant amount of evidence presented to show that the trusses as originally designed could accommodate the required loads if they were installed at 24 inch intervals. This latter proposition would obviously have required approximately 50% more trusses than originally bargained for, with the commensurate addtional costs of supply and installation. However, in my opinion, none of those propositions are directly relevant to what caused the original design to be unsuitable for the project requirements of Lightfoot. Lightfoot had contracted for trusses spaced at 36 inch intervals, suitable for the project, and it would not accept and could not be made to accept anything else. Therefore, new trusses had to be designed and supplied, in any event. The best that can be said about this evidence is that it may tend to show which party may have had a negligent approach to the design and/or fabrication of theses trusses from the beginning of this project and therefore, who is more at fault for not ascertaining the loads to which Lightfoot intended to subject the trusses. [10] The main question to be decided is; which of the Parties, Illsley or Roscoe, is responsible for failing to ascertain the required load bearing capacity of these trusses prior to fabrication and partial installation? THE LAW: [11] Sale of Goods Act: [12] The Parties led a significant amount of evidence to support their respective positions under the Sale of Goods Act, R.S.N.S., 1989, c. 408, as amended, and in particular, Section 17(a): “Quality or fitness for particular purpose 17 Subject to this Act and any statute in that behalf, there is no implied warranty or condition as to the quality or fitness, for any particular purpose, of goods supplied under a contract of sale, except as follows: (a) where the buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the sellers skill or judgment and the goods are of a description that it is in the course of the sellers business to supply, whether he be the manufacturer or not, there is an implied condition that the goods shall be reasonably fit for such purpose, . . .” Roscoe claims that in telling Illsley that the trusses were for a chicken barn and showing it a drawing which included a knee brace, it provided sufficient information of the “particular purpose” for which the trusses were required so as to trigger the reliance provision of Section 17 (a). In other words, Roscoe contends that from then on it was clear that it relied on Illsley to design trusses which were suitable for the Lightfoot project. It is common ground that Roscoe did not take any steps to ascertain what equipment loads would be supported by the trusses, nor did it advise Illsley that there were to be loads in addition to the obvious ones, such as roof, insulation, etc., prior to the design and fabrication of the first set of trusses. It is also common ground that Illsley did not ask any questions regarding additional loads particular to the Lightfoot project. CONCLUSIONS RE: SALE OF GOODS ACT: [13] I find that Roscoe just indicating to Illsley that the project was a chicken barn with a knee brace was not sufficient to trigger the particular purpose and reliance provisions of Section 17 (a) of the Sale of Goods Act in these circumstances. The particular purpose was a state of the art chicken barn with significant equipment loads suspended from above, all to be supported by the trusses. Roscoe contends it was the responsibility of Illsley to ascertain this information by asking questions of Roscoe and to pass this information to Alpine. Roscoe claims it was relying on Illsley, as expert truss designers and fabricators, to make sure it had all the information necessary to design trusses suitable for the project. On the other hand, Illsley claims it had all the information necessary to design and fabricate trusses to support the roof (with or without a knee brace), insulation, etc., and that it was not its responsibility to do anything more. Illsley contends it was not required to make any further inquiries regarding possible additional dead loads to be supported by the trusses. [14] I find that these arguments do not address the issue of particular purpose but are more directed at the question of whose responsibility it was to make sure this information was obtained and incorporated into the truss design. There can be no question that the original truss design was not suitable for the Lightfoot project. The question to be answered is, “whose fault was it”? In my opinion the answer to this question falls more appropriately into the realm of “negligence performance of contract”. FABRICATING DEFECTS: [15] Roscoe argues that there were sufficient defects in the fabrication of the trusses to make them unfit, even for the purpose which Illsley understood they were to be used. There is no question that the evidence shows poor quality control, if not downright sloppiness, in the fabricating process. There were unacceptable gaps, poor quality wood, asymetry, etc. However, the weight of the evidence leads me to conclude that those defects were repairable. These would have been corrected at Illsley’s expense and under the direction or supervision of Alpine engineers who would have to approve all repairs in accordance with detailed plans. The evidence does not persuade me that the asymetry of the trusses made them unsuitable for the purpose which Illsley understood. I accept the evidence of the Alpine engineers, Mr. Lim and Mr. Vertolli in this regard. There can be no question that such defects would undermine the confidence one would have in the trusses. However, the fabrication issue turned out to be moot because Lightfoot would not accept trusses at 24 inch intervals and it insisted on trusses designed and fabricated which would accommodate its project, which was at 36 inch intervals. Clearly, that was Lightfoot’s right under its building contract with Roscoe. [16] In my view the evidence of defects is primarily relevent to the allegation that Illsley was negligent and sloppy throughout its involvement in this project and, as such, was responsible for failing to ascertain the actual loads to which these trusses would be subjected. THE AUTHORITIES RE: NEGLIGENT PERFORMANCE OF CONTRACT: [17] The parties blame each other for the inadequate design of the first set of trusses. They claim it was the responsibility of the other to inquire and ascertain the equipment loads to be supported by trusses for the Lightfoot barns. A large portion of the evidence addressed this issue. At the end of closing summations I asked counsel to file post-trial briefs on the issue of negligence in a contractual situation and the possible application of the Contributory Negligence Act, R.S.N.S., 1989 c. 95 as amended. [18] Both parties agree that negligence and contributory negligence principles can be applied to the performance of contractual obligations. However, Roscoe contends that those principles do not apply to it in the circumstances of this case because it owed no duty to Illsley, a requirement it claims was established by the Supreme Court of Canada in Carl B. Potter Limited v. Mercantile Banks of Canada, [1980] 2 S.C.R. 343. However, recent cases in Nova Scotia appear to have interpreted duty very broadly, to include acting reasonably in looking after one’s own interest. In Sydney Co-Op Society v. Coopers and Lybrand (2002), 213 N.S.R. (2d) 115, Justice LeBlanc of this Court said the following at paragraph 171: [171] I accept the defendant’s argument that in assessing whether or not the plaintiffs are contributorily negligent for the loss they sustained, it is not a question of a standard of care test but whether they acted reasonably for their own safety. In Hustins Enterprises v. Byrne Architects, [2002] N.S.R. (2d) Uned. 96, our Court of Appeal appears to also adopt the broader concept of fault. Hamilton, J. A. stated the following at paragraph 56: [56] I am satisfied the trial judge did not err in reducing the Damages by 15% to take into account Hustins’ part in drilling the holes. It is trite to say that the doctrine of causation requires that Hustins only receive damages from Byrne for the loss caused by Byrne’s breach of contract. If Hustins suffered a loss due to its own unreasonable conduct it must bear the cost itself of its contributory fault. [19] In this case, there can be no doubt that the parties owed a duty to each other by virtue of the direct contractual relationship between them. There can be no closer proximity than that in business dealings. What is being argued by the plaintiff is that Roscoe owed a greater duty to Illsley in providing the latter with sufficient details of the dead load requirements to permit Illsley to design adequate trusses. On the other hand Roscoe contends that Illsley owed it a greater duty to ascertain this information because Illsley is in the specialized business of designing and fabricating trusses adequate for projects. I find that both parties owed each other a duty in this regard. They also owed each other a duty in the sense that they were both required to act resonably to protect their own interests. ANALYSIS: [20] The evidence is clear that Mr. Illsley did not make any inquiries whatsoever to ascertain what the equipment load requirements were for these trusses. Illsley went ahead and designed and fabricated trusses for what can only be considered as minimum load requirements. When Mr. Illsley was asked by Mr. Roscoe why he had gone ahead and designed trusses with those minimum load requirements, Mr. Illsley is said to have replied words to the effect that if he had designed heavier load trusses, he would not have gotten the job. Mr. Illsley testified he did not recall making the statement, but he did not deny it. He said he may have. I accept that this statement was made to Mr. Roscoe. Mr. Illsley testified that, if he had been told or known of particular load forces, it would have been important information which he would have incorporated in the design and/or he would have passed this information to Alpine engineers. [21] Mr. Illsley testified that he was aware that the roofs of commercial buildings often support some equipment such as air conditioners, ventilation, etc. He stated he would ask the weight of such equipment so he could pass this information to Alpine. Illsley does not calculate actual loads but it can input loads into the computer design function if they are told of the actual loads. Illsley does not have the engineering capacity to calculate chord loads from actual equipment weight. [22] Mr. Illsley also testified that he knew he did not have the exact project specifications when he began quoting for various designs of trusses in early February of 1999. Mr. Illsley said all he needed to know was that it was a farmbuilding and that Roscoe had conveyed that to him. Mr. Illsley testified on cross-examination that if he was told about equipment suspended from the roof or trusses, it would be important information that he would pass on to Alpine, but that he does not ask the question. He said he has to be told what loading and where. Mr. Illsley testified he was never shown a scope of work dated April 26, 1999. [23] I can only conclude that Mr. Illsley did not ask about any additional loads because he wanted his quotes on the project to be as competitive as possible. I find that, in doing so, Illsley breached its duty to Roscoe, and also Illsley did not act reasonably to protect its own interests in the design of the Lightfoot trusses. [24] On the other hand, Roscoe had its own project engineer, Mr. Harris, who was charged with approving the drawings for the construction of the two barns. It is clear that Mr. Harris’ retainer was a very limited one at a total price of $300.00. Roscoe failed to supply Mr. Harris with the pertinent information regarding the loads which would not only be supported by the trusses, but which would ultimately be supported by the walls which Mr. Harris was designing and approving. None of this occurred until the redesign for the second set of trusses. [25] Mr. Harris testified he would have expected to be provided with this pertinent information. Mr. Harris testified he provided Exhibit # 17 to Roscoe. These are Mr. Harris’ design calculations for the building. He said Roscoe would have used this information to draw the plans after which he would have attended at Roscoe’s office to review the plans. Mr. Harris testified he was aware of the roof trusses and that he had been told about them. In fact, the trusses are mentioned in several of Mr. Harris’ calculations, including dead loads of 8 pounds per square foot and live loads bottom chord of 10 pounds per square foot. It appears that Mr. Harris is primarily concerned about truss loads insofar as they affect his wall and foundation designs. Mr. Harris testified he could verify the loads on the Illsley truss plan to see if they fit with his specifications. Again, it appears this was primarily for his wall and foundation designs. Mr. Harris also testified he discussed wind loads with Mr. Vertolli of Alpine and ascertained category 2 would be the numbers used. [26] Mr. Harris also testified he discussed the knee brace situation in Roscoe’s board room. He said that Roscoe indicated an intention to use them; however, he was not asked to calculate the loads or to design any method of attachment for the braces. [27] Mr. Harris did not recall ever being told about the mechanical equipment to be hung from the ceiling. He said this would have been important information for him to design the weight capacity of the walls supporting the roof. [28] If Mr. Harris had been provided with the pertinent weight information or if he had been asked to calculate knee brace forces, he may very well have noticed that the truss designs which all showed top and bottom chord dead loads of 4 pounds per square foot were inadequate for the intended loads. [29] After the collapse, Roscoe retained engineers, Roberts Engineering, to calculate the equipment load forces as well as other forces and Roscoe’s engineers collaborated with the Alpine engineers to achieve an adequate design for the second set of trusses. As Roscoe’s expert engineer, Archie Frost, testified, that is the manner in which projects such as these are supposed to proceed. Mr. Frost was critical of the haphazard approach and attitude of both Illsley and Roscoe in the design of the trusses and with other structural aspects of the construction. Mr. Vertolli of Alpine testified he would have expected a structural engineer on such a project. [30] Mr. Roscoe testified that broiler chicken barns usualy or almost always have equipment hung from the ceiling. If that’s the case, one wonders why he would not have at least passed this general information on to Illsley. In fact, Mr. Roscoe testified that he assumed this was being discussed between Mr. Harris and Mr. Illsley. This could not be because Mr. Harris had not been provided with even this basic information. One would have to ask how much Roscoe was expecting of Mr. Harris for its $300.00 retainer. [31] It is also noteworthy that, even with Roscoe being aware that equipment is almost always hung from the ceiling of such barns, it did not obtain the weight information from Lightfoot until after the collapse. [32] Mr. Roscoe testified that all the quotes and drawings obtained during February to April of 1999 were incomplete and were for the purpose of pricing only. He said there was other information yet to come, but no additional information regarding deal loads was obtained or passed on to Illsley. Mr. Roscoe testified he assumed his structural engineer (I believe he was referring to Mr. Harris) was working out the forces, especially the knee brace forces, with the truss supplier. Mr. Roscoe testified he assumed Mr. Harris was working on calculations similar to those found at Exhibit 7, Tabs 6 & 7, and that that information would have been passed on to Illsley. He said he assumed Mr. Harris had done the proper engineering work and that he was working closely with the truss supplier. However, Roscoe had not provided Mr. Harris with the equipment weights to make those calculations. Again, one would have to ask how much work Roscoe assumed Mr. Harris would be responsible for on a $300.00 retainer. [33] Mr. Roscoe testified that when he met with the owners to discus the project, the equipment to be used was discussed. He said he even asked for the weights from Lightfoot and that he got them in due course, but this was apparently only for the redesign. He said he could proceed without that information because it is very typical equipment, but he was not sure what, if any, information he had provided to Mr. Harris in that regard. It appears it was very little, if any. Mr. Roscoe testified he did give the equipment list to Roberts Engineering, after the collapse, but that he did not have it for Mr. Harris. Therefore, it appears clear that Mr. Harris could not have made the proper calculations nor passed them on to Illsley. [34] Ashley Loggie, a project estimator with Roscoe testified it is not usual to ask for the weights on trusses at the bidding stage. He said Roscoe is just asking for quotes, but he assumes the trusses quoted would allow for a certain weight. Ashley Loggie said Illsley never requested any further information and he assumed Illsley had all the information it required. [35] Mr. Frost testified he assumed Roscoe would be aware of the additional loads created by the equipment, etc., and that both Mr. Harris and Mr. Illsley should have been made aware of this fact. [36] Mr. Frost testified the plans prepared by Roscoe did not provide enough information, but that if the information is not there, then it is incumbent on contractors (I assume he is referring to Illsley) to ask for the addtional information. It is clear none of the drawings showed the equipment. Mr. Frost also testified that if Roscoe limited Mr. Harris’ retainer, then it did so at its own peril. [37] David Loggie, the vice-president and general superintendent of Roscoe since 1969 said that he would be relying on Mr. Harris to ensure that trusses designed by Illsley and Alpine were adequate for the project. He said he was relying on Mr. Harris for the structural integrity of the building; however, he also acknowledged that Mr. Harris was not provided with the equipment load information and, as a result, Mr. Harris did not and could not have shown this on his stamped drawing or passed them on to Illsley. CONCLUSION: [38] In the final analysis, I find that both Illsley and Roscoe were negligent and at fault for the failure of the design for the first set of trusses. They both breached their duty to each other by failing to ascertain or provide the pertinent information regarding actual dead loads intended to be supported by the trusses. In doing so, they both also failed to act reasonably to protect their own interests on this project. [39] That raises the question; which party, if any, is more at fault than the other, and, if so, in what proportions? I have been considering this possibility for quite some time. I am not able to assign more fault to one party than the other. In the result, I find that both parties are equally responsible for the failure of the first design to accommodate all the dead load requirements of the Lightfoot project. It therefore remains to be decided what damages flow from the joint and equal fault of the parties with regard to the first and second set of trusses, including the removal and the reinstallation of trusses as a result of the collapse. DAMAGES: [40] Illsley had originally quoted a price of $64,641.50, including HST, for all the trusses required for the Lightfoot project, and Roscoe placed a purchase order for that amount on May 4, 1999. This was the total amount Roscoe expected to pay and which Illsley expected to receive for trusses with regard to the project. Therefore, the amount of the original contract is not in dispute. Those trusses were all fabricated by Illsley and supplied to Roscoe at the Lightfoot site. Roscoe contends it should not be liable for the cost of the first set of 70 foot trusses because they were not usable; however, I have already ruled that they were unable to be used because of inadequate design, and for no other reason. I have already found that both parties are equally responsible for the inadequate first design. [41] The issue is; what are the damages or extra costs which were caused by the inadequate first design; because it is those extra costs which are to be shared equally. [42] Two lots of redesigned trusses were later supplied in accordance with quotes from Illsley and corresponding purchase orders from Roscoe. The first lot was for the 200 foot barn at a cost of $32,830.20 and the second lot was for the 400 foot barn at a cost of $66,291.75, both inclusive of HST. Therefore, the total cost of the redesigned trusses was $99,125.95. I find that this is the amount of damages or additional costs caused by the inadequate first design; therefore, these are the costs which are to be shared equally between the parties. I find that Roscoe is liable to Illsley for the original contract price of $64,641.50, plus one half of the cost of the redesigned trusses; ie., $49,560.97, for a total of $114,202.47. Roscoe has paid Illsley the sum of $32,830.20; therefore Roscoe is still liable to Illsley for $81,372.27. [43] Illsley issued a restocking credit of $21,505.00 to Roscoe on September 29, 1999. This represented 68 of the original trusses which had not been used for the 200 foot barn and which were picked up by Illsley and returned to its fabrication facility after the collapse on the 400 foot barn. Mr. Illsley testified that this credit was offered in an attempt to settle the accounts with Roscoe and that, when that did not work, the credit was revoked. Mr. Illsley testified that he has had no use for those trusses and that they are for all intents and purposes unusable; however, he did not account for the materials, primarily the lumber. I find that there should be a restocking credit of one half of the amount originally offered by Illsley. Roscoe should therefore be credited with a restocking amount of $10,752.50. This leaves Roscoe liable to Illsley for $70,619.77. [44] Roscoe had also counterclaimed for the cost of removing the collapsed and standing trusses with regard to the first installation attempt, and for reinstalling the corresponding redesigned trusses. This claim, which I accept, amounted to $15,212.04, including HST. Roscoe received a payment of $19,840.00 from its builder’s risk insurers. It was suggested that Roscoe should account to Illsley for the difference of some $4,600.00. While Roscoe should not be able to recover double damages for the same loss, it does not follow that Illsley should benefit directly from any surplus insurance proceeds because the premiums for this coverage would have been paid by Roscoe. It is a well established principle that a third party such as Illsley has no interest or claim in such surplus insurance proceeds. There will therefore be no adjustment on account of the insurance payment received by Roscoe. SUMMARY: [45] In summary, Illsley shall have judgment against Roscoe in the amount of $70,619.77, plus pre-judgment interest. It was agreed at the pre-trial conference that pre-judgment interest would be set at 4.5% per annum. Illsley’s claim has been outstanding for approximately 4 years. In view of my ruling on fault or liability, and the claims advanced by the parties, I find that awarding pre-judgment interest for a period of two years is appropriate. Illsley shall have interest of $6,355.77 for a total judgment of $76,975.54. [46] I will hear the parties submissions on the issue of costs, if the parties cannot agree. If agreement is reached on costs, I will grant an order accordingly. Failing agreement on costs, I will hear submissions form the parties in Annapolis Royal Chambers on April 13 or 27, 2004, or some other date and location as may be agreed with the parties. Boudreau, J.