The general rule is that the method by which a contractor chooses to execute the work falls within its sphere of responsibility. In this case, however, partnering provisions and obligations appear to be specific arrangements to the contrary of the general rule.

Court judgment takes into account partnering promises

by Paul Sandori

EBC Inc. v. New Brunswick

Negligence • Award for damages • Failure of bidding documents to specify concrete mix to be used in slip form construction • Breach of contractual duty • Duty of contractor to prepare bid in accordance with Specifications

In January 1999, EBC Inc. signed a $9,660,000 contract with the Province of New Brunswick to build a new wharf and ferry terminal. The consultant engineers were from the Province’s own Department of Transportation.

Following completion, EBC sued the Province alleging negligence on the part of the Province’s engineers, and asked the court to award to it damages of $330,518 as well as interest and costs.

EBC’s Claim

The project included the construction of four concrete caissons. The Province specified the components of the concrete to be used, including low alkali with silica fume (LASF) cement. The concrete mix was also specified. The bid documents provided that the caissons could be constructed using slip forms.

At the time of preparing its bid, EBC was not aware of any problems that would arise from the use of LASF cement, and no warning of such problems was contained in the bid documents. When EBC subsequently learned that problems were likely to happen, it had to experiment with accelerator admixtures in order to arrive at an appropriate mix. The use of admixtures greatly increased EBC’s costs.

EBC also found it necessary to reduce the rate at which the forms were slipped, and this loss of productivity raised costs even further, as did the method of concrete curing required by the Province.

EBC argued in court that the Province had a duty to specify in the bid documents a concrete mix that could be used in slip form construction, that the Province negligently breached that duty, and that this breach caused EBC to suffer damages.

In the alternative, EBC maintained that it was an implied term of the Contract that the concrete mix specified by the Province would be suitable for use in slip form construction, and that the Province breached that term. It was also an implied term that the curing of the concrete should be carried out in a reasonable and suitable manner.

Province’s Defence

The Province took the position that the use of the slip form method of caisson construction was a choice left to the bidders. When EBC chose to proceed in this way, it assumed the responsibility to identify all the associated costs and include them in its bid price.

Furthermore, argued the Province, EBC had to be aware of the implications that slip form construction would have for the construction materials required, including the concrete mix and necessary admixtures. Further, EBC knew that curing compounds were prohibited by the Specifications and therefore was obligated to prepare its bid accordingly.

The Province was not obligated to advise EBC regarding the possible consequences of its choice of construction methods.

Precedent Decisions

EBC sued as if the Province were an engineering firm that had made mistakes. The legal basis for such an action against engineers has been set out by the Supreme Court of Canada in Edgeworth Construction Ltd. v. N.D. Lea & Associates Ltd:

The engineers undertook to provide information (the tender package) for use by a definable group of persons with whom it did not have any contractual relationship. The purpose of supplying the information was to allow tenderers to prepare a price to be submitted. The engineers knew this. The plaintiff contractor was one of the tenderers. It relied on the information prepared by the engineers in preparing its bid. Its reliance upon the engineers’ work was reasonable. It alleges it suffered loss as a consequence. These facts establish a prima facie cause of action against the engineering firm.

The Province’s defence was also based on a decision of the Supreme Court of Canada, in a case heard on the same day as Edgeworth. In Auto Concrete Curb Ltd. v. South Nation River Conservation Authority, the Court said:

It has long been established that, barring specific arrangements to the contrary, the method by which a contractor chooses to execute the work falls within its sphere of responsibility, and that neither the owner nor the design professionals employed by the owner have a duty to advise the contractor as to what method to choose, or how to go about accomplishing the work by whatever method the contractor in fact chooses. [Emphasis added.]

Thus, EBC in its arguments emphasized factual details that it hoped would allow the court to apply Edgeworth. The Province stressed other factual details that it hoped would swing the court in the direction of Auto Concrete.

Partnering

Work on the project started with a “partnering” session which the Province encouraged in order to develop “a spirit of teamwork and cooperation through shared goals, open communication, problem identification and resolution, conflict escalation procedures and the monitoring of team performance.”

As part of the process, the contractor and the owner agreed, “with a positive commitment to honesty and integrity”, that each would assist in the other’s performance and cooperate in the common endeavour.

For two days, some 20 representatives of the Province (including a number of in-house engineers), EBC and other organizations related to the wharf project attended a partnering workshop in a hotel with a facilitator. The sessions included team building exercises of competing in three groups to build towers with balloons and masking tape.

The workshop participants were urged to disdain the attitude that something is “not my job”. Then 17 of the participants also signed a Partnering Charter affirming that they were “Partners … committed to work together to complete this project on time/on budget…”.

In the judgment, Justice McLellan of the New Brunswick Court of Queen’s Bench took all these good intentions and promises into account. In fact, it was the cornerstone of the decision. The judge said:

That ‘partnering’ in my opinion contradicts the Province’s present contention that it was ‘not my job’ to disclose to the contractor what the Province’s engineers knew about slip forming LASF Concrete in winter conditions. In the words used by the Supreme Court in Auto Concrete, cited earlier, those partnering provisions and obligations appear to be ‘specific arrangements to the contrary’ of the general rule reiterated in that case.

Slip Forms and Accelerator Admixture

The contract did not specify that slip forms would be used, but did refer to that possibility twice. It did not refer to any other method. The court found that the slip form method was the only practical and economical method to construct the caissons. The parties knew that and assumed that the caissons would be slip formed.

The Province had experience with LASF concrete, a relatively new and unusual product. Despite that, the Province’s engineers did not mention the need for an accelerator or even the concern that an accelerator might be necessary.

This misrepresented to EBC that an accelerator would not be necessary. It was a negligent misrepresentation. It was reasonable for EBC to rely on that misrepresentation in preparing its bid.

EBC also claimed for production losses based on the evidence that the slip-forming proceeded more slowly than expected but it lacked evidence. EBC had its own problems with rebar placement, labour productivity, site management and winter conditions. “In my opinion,” said the judge, “the evidence is insufficient to allow me to conclude that the forms were slipped more slowly than expected because of any cause for which the Province could be liable.”

Mix Design and Curing

The mix design was the primary responsibility of the Province’s engineer, with the active assistance of EBC in providing details of aggregates and suppliers to be used. Both parties were obliged to work together in the spirit of partnering with each other and with suppliers to finalize the mix design.

It was necessary and appropriate that the final mix design be tested in winter conditions, said the judge. However those tests by EBC at a cost of $17,832 were also an opportunity for EBC to practise the art of slip forming with LASF concrete. The court decided that it would be fair for that expense to be shared by the parties.

EBC would have preferred to use curing compounds rather than to keep the fresh LASF concrete moist. However, the specifications required that newly exposed surfaces be kept moist until the curing period was completed and a curing compound would not be as effective. EBC’s claim to be reimbursed for the cost of keeping the concrete moist during the curing period was therefore rejected.

Summary of Findings

In the end, Justice McLellan relied on the Edgeworth decision of the Supreme Court, and distinguished cases such as Auto Concrete because of the “specific arrangements to the contrary” found in the partnering provisions between EBC and the Province. EBC was awarded a total of $228,204, including costs.

New Brunswick Court of Queen’s Bench Trial Division
   McLellan J.
   October 27, 2005