SJC-404-2010  
IN THE COURT OF QUEEN’S BENCH OF NEW BRUNSWICK  
TRIAL DIVISION  
JUDICIAL DISTRICT OF SAINT JOHN  
BETWEEN:  
Citation: HB Construction v. Potash Corporation et al 2020 NBQB 180  
Date: 10-01-2020  
HB CONSTRUCTION COMPANY LTD. (formerly  
COMSTOCK CANADA LTD.)  
Plaintiff  
- and -  
POTASH CORPORATION OF SASKATCHEWAN INC.  
and WOOD CANADA LIMITED (formerly AMEC  
AMERICAS LIMITED  
Defendants  
AND BETWEEN:  
SJC-596-2010  
HB CONSTRUCTION COMPANY LTD. (formerly  
COMSTOCK CANADA LTD.)  
Plaintiff  
- and -  
POTASH CORPORATION OF SASKATCHEWAN INC.  
Defendant  
BEFORE:  
The Honourable Madam Justice M. Deborah Hackett  
DATES OF HEARING:  
January 7, 8, 9, 10, 11, 14, 15, 16, 17, 18, 22, 23, 24, 25, 28, 29,  
30, 31, February 1, 5, 6, 7, 8, 11, 12, 13, 14, 15, 19, 20, 21, 22, 25,  
26, 27, May 8, October 21, 22, 23, 24, 28, 29, 30, 31, November  
1, 4, 5, 12, 13, 14, 15, 28, 29, December 13, 2019.  
DATE OF DECISION:  
October 2, 2020.  
APPEARANCES:  
Howard M. Wise, Robert M. Creamer, Q.C., Mark Dunn, Matthew Letson  
& Jesse-Ross Cohen for HB Construction Company Ltd.  
Peter T. Zed, Q.C., Patrick Dunn & Laura Boyd for Potash Corporation of  
Saskatchewan Inc.  
Fred McElman, Q.C., Conor O’Neil & Clarence Bennett for Wood Canada  
Limited  
2
DECISION  
HACKETT, J.:  
INTRODUCTION  
[1] The plaintiff in these actions, formerly known as Comstock Canada Ltd., (referred to in this  
Decision as “Comstock”) was a contractor on a construction project owned by the defendant,  
Potash Corporation of Saskatchewan (referred to as “PCS”). The defendant Wood Group Limited,  
formerly AMEC Americas Limited, (referred to as “AMEC”) was the engineer responsible for the  
design and contract management of the project.  
[2] In the first action, Comstock claims damages from the defendants for breach of contract and  
negligent misrepresentation, among other causes of action. Comstock alleges the defendants  
caused it delay that prevented it from completing the work in the contractual timeframe and claims  
PCS` wrongfully terminated it for default. It claims damages including amounts it says it is owed  
for work completed under the contract, as well as for loss of productivity and extended overhead  
costs it says arise from the defendants’ breaches of the contract and/or the duty of good faith and/or  
tortious actions.  
[3] The defendants deny any liability to Comstock and state that Comstock is solely responsible  
for its losses on the project. They submit Comstock was dismissed for cause. PCS claims a set off  
for the cost of completion and deficiencies against any damages it may owe Comstock.  
[4] In the second action, Comstock seeks to recover from PCS amounts held back under the  
MechanicsLien Act, R.S.N.B 1973, c. M-6.  
1
FACTS  
[5] In 2007, PCS embarked on an expansion of its potash mine in Penobsquis, New Brunswick  
(the Picadilly mine expansion project). The mine expansion project had an approximate value of  
$1.7 billion. PCS contracted with AMEC to provide engineering, procurement, and construction  
management (EPCM) services for the project. PCS had contracted with AMEC to provide these  
services on several other mine expansion projects throughout North America.  
[6] As part of the overall mine expansion project, PCS built a new potash compaction plant with a  
value of approximately $120,000,000.00.  
[7] In late 2008 the global market for potash was strong. PCS wished to have the new compaction  
plant built as soon as possible. Mr. Bailey, then Vice-President of PCS and responsible for the  
project, testified that PCS preferred lump sum tenders as they allocated the risk to the contractor  
in the event of an underestimate in the bid.  
[8] However, in early February 2009, the engineering and drawings were not sufficiently advanced  
to issue the tender on a lump sum basis and bids for CP-15 were sought on a cost reimbursable  
basis.  
The tender  
[9] AMEC was responsible for the tendering of the contract. Comstock, a contractor out of  
Burlington, Ontario, was one of four contractors invited to bid on the contract for the mechanical,  
HVAC, piping, electrical and instrument work for the compaction plant. The contract was known  
as CP-15 pursuant to a Request for Proposals issued February 9, 2009.  
[10] Prospective bidders were invited to a pre-tender meeting and a site walk on February 18,  
2009. Comstock participated in this meeting and site walk.  
2
[11] Comstock submitted a bid in the amount of $34,943,170.00 on April 3, 2009. Comstock  
reduced the bid amount by $1,005,000.00 based on identified savings on April 17, 2009.  
[12] Comstock attended an on-site bid clarification meeting with representatives of AMEC and  
PCS on April 30, 2009. Comstock’s bid was discussed in detail and a tour of the site took place.  
Change to Lump Sum tenders  
[13] By May 1, 2009, AMEC and PCS had decided that the engineering design work on the  
compaction plant had progressed sufficiently to proceed with tenders on a lump sum (also referred  
to as fixed price) basis. On May 1, 2009 a bid clarification letter was sent by AMEC to all cost-  
plus bidders asking each to confirm its interest in submitting a tender on a lump sum basis. On  
May 4, 2009 Comstock wrote to confirm its interest.  
[14] The Invitation to Tender was issued May 30, 2009. It indicated a closing date of June 19,  
2009, contract award by July 31, 2009 and work under the contract to be completed by May 14,  
2010.  
[15] AMEC issued several revisions of engineering drawings and specifications referred to as  
Requests for Contract Action (“RCA”) over the course of the tendering process. Bidders on the  
lump sum tender were working from RCA 8.  
[16] Comstock and the other contractors invited to submit lump sum bids were invited to another  
site meeting on June 10, 2009 with AMEC representatives. Issues discussed included the drawings,  
heat, and site exclusivity. Another site walk through took place.  
[17] AMEC issued a revised set of drawings and specifications, RCA 9, on June 13, 2009. The  
tender closing date was extended to July 3, 2009.  
3
Comstock’s lump sum bid  
[18] On July 3, 2009, Comstock submitted its lump sum bid for CP-15. The bid amount was  
$34,479,169.41. It was the lowest bid by a significant margin. The other three lump sum bids were  
$43,841,202.00; $45,912,278.00; and $48,374,166.00.  
[19] Comstock stated in its tender submission the work would commence on or before August 30,  
2009 and the construction period would be 210 working days, based on a five day, 10 hour per  
day, work week as required by the tender documents. Substantial completion would be by April  
15, 2010 and final completion by May 30, 2010.  
[20] Comstock’s bid submission included in Trial Exhibit 1 indicates its estimated peak workforce  
for contractor and subcontractor forces would be 200 people. Estimated total on-site hours were  
250,500 of which 155,000 were for contractor workers, 75,000 were for subcontractor workers  
and 20,500 were for on-site staff.  
Comstock’s Execution Plan  
[21] In its Execution Plan submitted with its July 3, 2009 bid proposal Comstock indicated among  
other things that:  
It intended to begin mobilizing August 17, 2009;  
It would install a construction elevator in the plant if possible for access to higher  
elevations;  
It would install temporary washrooms located within the building;  
The overhead cranes (owned by PCS and intended to be used after construction of the  
compaction plant as maintenance cranes) would be used by Comstock for material handling  
to the different elevations;  
After the cranes were certified and turned over to Comstock for use during construction it  
would add a second shift to hoist equipment/materials while day crews would install  
equipment hoisted the previous night;  
4
The natural gas system included in the scope of work would be installed early in the  
schedule to allow use of gas to fuel temporary construction heaters for winter heat.  
Bid clarification meeting  
[22] On July 15, 2009 AMEC held a bid clarification meeting with Comstock representatives to  
review in detail the tender documents. Another walk-through of the site took place.  
RCA 10  
[23] RCA 10 was released July 10, 2009. The majority of these drawings were marked “IFC” –  
Issued for Construction.  
[24] On July 23, 2009 Comstock submitted a revised lump-sum bid of $36,279,170.35 based on  
these new drawings, an increase of $1,162,801.00. Comstock did not revise its May 30, 2010  
completion date.  
Comstock is awarded the contract  
[25] On August 12, 2009, PCS issued a Letter of Intent confirming that Comstock was awarded  
the contract. Although the contract was not signed until sometime after December 18, 2009, it is  
agreed by the parties it was effective as of August 14, 2009 when Comstock acknowledged receipt  
of the letter of intent.  
[26] The contract provided work would commence on or before August 30, 2009, substantial  
completion would be by April 15, 2010 and final construction completion would be by May 30,  
2010.  
The Contract  
[27] The contract contains over 1,000 pages. Article 1 of the “Agreement for Contract” states:  
5
ARTICLE 1  
1. This Agreement together with the following documents:  
Letter of Intent  
Service Provider Undertaking Agreement  
Correspondence  
1.1.1. Contractor Offer  
Introduction  
Construction Execution Plan  
Schedule A Schedule of Unit Rates  
WCB Experience Rate Statement and Letters  
Certificate of Insurance  
1.2  
General Conditions  
General Conditions of Contract  
Additional Special Conditions  
1.3  
1.4  
Scope of Work  
Drawing List (RCA 10)  
As per Specification List.  
1.5  
1.7  
Specification List (RCA 10)  
As per Drawing List.  
Exhibits  
Exhibit 1 - Construction Management Plan (CMP)  
Exhibit 2 - Quality Assurance/Quality Control  
Exhibit 3 - Administration Forms  
Exhibit 4 - AMEC/PCS Safety, Health & Environmental Library CD  
and the Contract Drawings listed in the Drawing List, together with the  
Construction Schedule and the Construction Drawings form the Contract and shall  
together be referred to hereinafter as the Contract or Contract documents.  
2.  
The Contract Documents shall constitute the entire agreement between the  
parties for the Work to be performed, and shall supersede and cancel all  
previous agreements between the parties in regard to the Work whether oral  
or in writing, whether expressed or implied.  
3.  
The Contract may only be amended as provided in the Contract Documents.  
[28] Article 2 of the Agreement for Contract states:  
6
CONTRACTOR undertakes and agrees to perform all the Work as shown or  
described in the Contract Documents and to do and fulfill everything to be done  
and performed by CONTRACTOR shall commence on Site on or before 30th day  
of August, 2009 and to achieve full and final completion of the Work on or before  
30th day of May, 2010 and CONTRACTOR does hereby agree to perform the Work  
for the estimated, not to exceed, sum of Thirty-Six Million Two Hundred Seventy  
Nine Thousand, One Hundred Seventy Dollars and Thirty Five Cents  
($36,279,170.35), hereinafter called the Contract Sum, and that there shall be no  
further charges to OWNER whatsoever other than those expressly provided for in  
the Contract Documents.  
[29] Article 3 states:  
OWNER undertakes and agrees to pay CONTRACTOR, in lawful money of  
Canada, the Contract Sum for the performance of the Work, subject to additions or  
deductions as provided for in the Contract Documents, and to make payments on  
account thereof as stipulated in the Contract Documents.  
[30] The contract contains numerous General Conditions. These were included with the tender  
documents.  
Comstock holds internal contract meeting  
[31] On August 17, 2009, Comstock held an internal kick-off meeting in Ontario. Mr. McLellan,  
Comstock’s Project Manager and primary fact witness, testified that Comstock was aware RCA  
11 was going to be issued at the time of this meeting.  
[32] At the meeting, Comstock discussed change order management. The minutes of the meeting  
reference under the heading “Change Orders/Extras:  
A lot are expected for this job and need to be managed effectively from the start.  
All extras are to be logged whether CCL plans to charge for them or not.  
Need excellent Change Order Managers.  
[33] Under item 5 “Site Personnel, Change Order Management” the minutes state:  
7
Need a strong overall Change Order Manager to manage all trades, as well as one  
for each of Electrical and Mechanical.  
On-site Kick-off meeting  
[34] Comstock attended a kick-off meeting on August 20, 2009 on site with representatives from  
the PCS/AMEC project team. The Scope of Work, drawings and schedule were discussed.  
RCA 11 issues  
[35] RCA 11 was posted to the project’s website on August 28, 2009 and was transmitted to  
Comstock on September 2, 2009.  
Comstock mobilizes to site  
[36] Comstock began to mobilize to site by August 31, 2009 and mobilization continued into mid-  
September, 2009.  
Comstock Submits Baseline schedule  
[37] G.C. 19.2.1 required Comstock to submit its baseline construction schedule 14 days after the  
award of the contract, i.e. by the end of August 2009. Doug Breed, AMEC’s construction  
coordinator for structural, mechanical, HVAC, insulation and piping work, provided Mr. McLellan  
with the latest equipment status report for compaction plant equipment to be incorporated into the  
baseline schedule on September 1, 2009 and requested a response by September 8, 2009.  
[38] On September 8, 2009 Mr. Breed wrote to Mr. McLellan and indicated that AMEC did not  
yet have a baseline schedule prior to the first contract meeting scheduled for September 14.  
[39] Mr. McLellan submitted a preliminary schedule on September 10, 2009. He indicated a  
scheduler was on site that day working on the baseline schedule.  
[40] Mr. McLellan worked with Matt Semmens, a Comstock scheduler assigned to the project on  
an “as required” basis to prepare the baseline schedule. Mr. Semmens and another scheduler, Sean  
8
Murray, carried out the scheduling work from Ontario primarily. Neither was assigned full-time  
to the project.  
[41] On September 25, 2009 the baseline schedule was submitted to AMEC and was accepted by  
AMEC on September 29, 2009.  
Schedule updates  
[42] Comstock was required under the contract to update the schedule weekly. AMEC requested  
the updates be provided 48 hours before weekly coordination meetings that took place on site  
between Comstock and AMEC representatives.  
[43] The schedule was prepared using Primavera software as required under the contract. As Mr.  
McLellan did not use Primavera software (her reviewed the schedules in PDF format) the schedule  
was updated by Matt Semmens or Mr. Murray in Ontario. They would receive information from  
the foremen and superintendents on site and input the information into the schedule.  
Change Order request for RCA 11  
[44] On September 25, 2009, Comstock submitted to AMEC a Change Order request in the  
amount of $1,172,000 for pricing of changes arising from RCA 11. However, it was not accepted.  
Comstock and AMEC went back and forth on price. Comstock submitted a revised price for RCA  
11 in the amount of $911,000.00 on November 18, 2009 which was signed off on by AMEC and  
PCS. A Change Order in that amount was issued to Comstock in February 2010, increasing the  
contract value to $37,190,170.35.  
[45] Comstock requested from AMEC four copies of RCA 11 and other IFC drawings transmitted  
after Comstock arrived on site. Comstock eventually obtained copies of these documents before  
the end of October 2009 and was reimbursed by PCS for the costs.  
9
Cranes  
[46] As PCS and AMEC were aware, Comstock intended to use for construction purposes two  
overhead cranes, the 25-ton and the 10-ton crane. These cranes were owned by PCS and would  
become maintenance cranes after completion of the compaction plant.  
[47] The cranes were “rough set” in the compaction plant by September 17, 2009. Comstock  
was responsible for installing the cranes and commissioning them. Comstock had to access  
certain elevations in order to run power to the cranes. This took place some time after October  
24, 2009.  
[48] The cranes were ready for commissioning by November 9, 2009 however delays arose on  
their commissioning due to a defect with the 10-ton crane. The 25-ton crane was commissioned  
and turned over to Comstock on December 1, 2009. The 10-ton crane was not turned over until  
January 28, 2010 due to a wait for the parts needed to complete its commissioning. Both cranes  
broke down frequently after turnover.  
MCC Room  
[49] Comstock was supposed to have access to the MCC room at elevation 141 on October 19,  
2009. It was not available as work was still ongoing to pour concrete on the floors. The MCC room  
at elevation 141 was turned over to Comstock on November 16, 2009. However, the structural  
steel contractor did not finish the ramp for lifting equipment into the MCC room until November  
28, 2009.  
Schedule starts to slip  
[50] Comstock’s schedules in November, 2009 showed completion of some activities extending  
past the May 31, 2010 contractual completion date into June 2010. The minutes of the weekly  
coordination meeting on November 17, 2009 indicate Comstock was behind schedule in some  
areas due to access issues. AMEC did not accept Comstock’s schedule submitted for the  
November 24, 2010 weekly meeting on the basis it showed some items being completed past  
May 31, 2010.  
10  
November 17, 2009 Notice of Delays  
[51] On November 17, 2009 Mr. McLellan issued a CIC (project electronic correspondence)  
entitled “Notice of Delays” to AMEC. In the correspondence Mr. McLellan expressed concerns  
with access to elevation 95, the Motor Control Centre (“MCC”) room, and the foundations for the  
cooling towers. Mr. McLellan also raised concerns with delay in accessing the 25-ton and 10-ton  
cranes and issues with east side cladding.  
[52] At the end of the correspondence Mr. McLellan writes:  
We are bringing the previous item to your attention, at this time, to inform AMEC  
that there may be a schedule impact due to the delays. However Comstock will  
continue to strive to work the affected tasks and areas and lessen the impact on  
the schedule.  
[53] Mr. Breed wrote back. He disputed that the items Mr. McLellan had raised were impacting  
the schedule.  
Heat in compaction plant  
[54] Comstock was responsible to provide temporary heat to the compaction plant building. The  
building was not fully enclosed until February 2010. Comstock says it could not heat the building  
properly as a result and workers were impacted by snow and ice in the building.  
[55] In December 2009 Comstock indicated to AMEC that due to conditions in the compaction  
plant and lighting outside on pathways it would work eight-hour days rather than the contractually  
required 10-hour days, five days a week. AMEC did not object. Comstock worked this reduced  
schedule between December 14, 2009 and February 2, 2010.  
The schedule slips again  
[56] The January 24, 2010 schedule showed a completion date of June 7, 2010. AMEC did not  
accept the schedule. In correspondence Mr. Breed stated incorrect or missing logic ties between  
activities had caused the schedule to show incorrect durations or completion dates. He also stated  
that Comstock had not shown in any of the previously submitted schedules why the completion  
11  
date would slip past the May 31st date so AMEC anticipated Comstock would meet the May 31st  
construction completion milestone.  
Crane Claim  
[57] On January 29, 2010, Mr. McLellan prepared a submission regarding Comstock’s claimed  
cost impacts in relation to crane issues up to January 28, 2010. He calculated the impact at $1.547  
million. At the end of the correspondence Mr. McLellan wrote:  
Although work has continued the delays in moving equipment and materials have  
also affected the schedule. The schedule will be re-planned around the date when  
the crane is ready for service but at this time the delay to mechanical completion is  
at least 2 weeks.  
[58] AMEC responded February 19, 2010 and stated that it agreed there were cost impacts  
associated with the unavailability of the cranes but did not agree with Comstock’s assessment of  
the extent of the impacts on the various trades. AMEC made a without prejudice offer to address  
the claim in the amount of $457,000.  
[59] Comstock replied February 23, 2010 with revised calculations that brought the claim to  
$1,253,673.78. It adjusted prior calculations to take into account that the site was shut down on  
December 9, 2009 and it included additional lost time for when the 10-ton crane was down in  
February 2010.  
[60] AMEC responded to Comstock’s adjusted claims but did not move from its position. No  
amount was accepted or paid for Crane issues.  
Comstock begins expressing concern with timing of issuance of change orders  
[61] After RCA 11, AMEC continued to issue revised IFC drawings. Comstock sought and  
received change orders in relation to design changes and modifications arising from revisions to  
the drawings and from instructions from AMEC transmitted by way of the CIC system.  
12  
[62] By termination on July 12, 2010 approved change orders were at $4.5 million, a substantial  
portion of which was in relation to design changes.  
[63] Starting in early February 2010 the weekly meeting minutes reflect that Comstock began  
requesting quicker turnaround of change orders so as not to cause schedule delays. Comstock’s  
position, confirmed by Mr. McLellan in his evidence, was that Comstock was not authorized to  
proceed with changed work until it received a signed change order. AMEC’s position was that IFC  
drawings were authorization to proceed with the work shown on the drawings and approval was  
only required for out-of-scope work.  
[64] Also beginning in February 2010 Comstock included in its quotations of price for changes to  
the work a statement to the effect that quick turnaround was required to avoid delay costs and that  
upon approval of the change order Comstock would adjust the schedule accordingly.  
Comstock is 10% behind schedule as of February 2, 2010  
[65] Comstock’s schedule submitted for the February 2, 2010 weekly meeting showed a May 31,  
2010 completion date. The minutes of this meeting indicate the schedule showed 38.5%  
completion and Comstock was approximately 10% behind schedule.  
Comstock begins night shift  
[66] In early February 2010 Comstock commenced a night shift. The weekly meeting minutes  
indicate that as of February 9, 2010 electrical work was the biggest concern and two crews were  
to start pulling cable that night. AMEC noted that earned man-hours needed to pick up in order to  
meet the schedule and that Comstock required 12,000 hours per week for the next six weeks.  
[67] The night shift continued until May 2010. Comstock’s reported hours showing on the weekly  
minutes indicate it obtained over 12,000 manhours every week until June 1, 2010 after the night  
shift was cancelled and Comstock began to reduce its work force.  
13  
Completion date extending to July 2010  
[68] Despite operating the night shift, the schedule was delayed. The February 26, 2010 schedule  
showed a completion date of July 7, 2010. At the March 2, 2010 weekly coordination meeting,  
AMEC indicated that an updated, accurate schedule, recovery plan, and cost implications were  
required from Comstock.  
[69] By correspondence to AMEC dated March 3, 2010, Mr. McLellan stated the anticipated  
schedule was extending out to July 15, 2010, and he included cost estimates for extending the  
project, which totalled approximately $90,000 per week on a preliminary basis.  
[70] Mr. McLellan indicated the schedule was extending out to July 15, 2010 for various (non-  
Comstock caused) reasons including:  
late delivery of the dust collection duct which delayed the start of duct installation from  
November to mid January, which in turn delayed the start of insulation on the duct;  
delay in the fabrication of the HVAC by approximately one month as there was confusion  
as to which revision of the specification was to be used. (Mr. McLellan testified that  
Comstock saw this as AMEC responsible delay, but AMEC did not agree);  
three week delay because the 10-ton crane was not available for December and January;  
areas of the building not being available early in the project;  
delays in other companies’ schedules such as cladding, concrete, structural etc.;  
large number of changes on drawings and scope which took a very long time to approve.  
[71] The schedule Mr. McLellan was referencing was not attached to his March 3, 2010  
correspondence. However the March 5, 2010 schedule sent to AMEC March 8, 2010 showed a  
July 15, 2010 completion date. This schedule was not accepted by AMEC.  
[72] The weekly meeting minutes of March 9, 2010 indicate AMEC had a number of concerns  
regarding the schedule including questioning the accuracy of the percent complete (Comstock was  
reporting it was 41% complete overall), major equipment not being accounted for in the schedule  
and activities not being linked in the schedule. AMEC stated that without an accurate schedule it  
could not plan activities.  
14  
[73] At the March 9, 2010 weekly meeting AMEC reiterated its request that Comstock have a full-  
time scheduler on site. The minutes indicate Comstock’s scheduler was to be on site Mondays and  
Tuesdays going forward. Mr. McLellan testified that he believed Sean Murray came to site around  
March or April 2010, and that Mr. Matt Semmens was on site one day a week or so starting in May  
2010.  
[74] Comstock submitted another schedule on March 15, 2010. It showed a construction  
completion date of August 11, 2010. AMEC did not accept the schedule submitted. It appears a  
separate schedule meeting was to be held the next day i.e. March 17, 2010. However there are no  
minutes of a meeting on that date in evidence.  
[75] On March 22, 2010 Mr. Breed forwarded to Mr. McLellan and others at Comstock a  
spreadsheet that AMEC had completed for CP-15 schedule activities that showed 90% or greater  
percent complete. AMEC provided its assessment of what it believed was a more accurate  
reflection of current progress. The spreadsheet indicates that in AMEC’s view many of the items  
that Comstock was showing 90% or greater complete were much less complete.  
[76] On March 24, 2010, a special schedule review meeting took place at which AMEC told  
Comstock it had grave concerns with respect to the direction the project was heading. If the  
schedule info is correct the project is in big trouble.”  
[77] Comstock acknowledged it had incorrectly included 30,000 hours for scaffolding and labour  
which should not have been part of the schedule. According to Mr. McLellan, this was an error  
made by Comstock, that had the effect of showing the construction completion date as extending  
out to August, 2010. However Comstock was still indicating to AMEC it could complete the work  
by July 15, 2010. According to the minutes, Comstock indicated it would have a workable  
schedule by Friday [March 27, 2010].  
15  
[78] On March 29, 2010 a further schedule review meeting took place. AMEC questioned the 59%  
overall completion estimate given by Comstock. The schedule was back to showing a construction  
completion date of July 15, 2010.  
[79] On March 30, 2010, Mr. Bowes, AMEC’s contract administrator, responded to Comstock’s  
March 3, 2010 letter. With respect to extending the construction completion date to July 15, 2010,  
Mr. Bowes indicated that AMEC was entitled to a weekly updated schedule that “meets the criteria  
set out in G.C. 19.0 of the Contract” and that this schedule and the supporting information would  
confirm whether the completion date would extend beyond May 31, and to what extent.  
[80] In terms of supporting information, Mr. Bowes requested that Comstock provide cost of the  
delay, i.e. details of any costs relating to Comstock having to remain on site beyond May 31, and  
cost of recovery, i.e. details of the costs associated with doing what is necessary to pull the schedule  
back to the original contractual finish date as per G.C. 22 (acceleration of the work). Mr. Bowes  
indicated if Comstock believed AMEC was responsible for any portion of the above cost, it should  
identify that portion and provide the rationale to attribute costs to AMEC.  
[81] On April 1, 2010 Comstock submitted a schedule that showed a construction completion date  
of July 16, 2010. The minutes of the next weekly meeting, April 6, 2010, state that the current  
format of the schedule was fine but indicates late deliveries were to be incorporated.  
Comstock submits Notice of Claim and Request for Extension of Time  
[82] In April 2010, Brian Guite, Comstock’ Senior Vice-President, Corporate, arrived on site. On  
April 16, 2010 he wrote to Tony Vecchio, AMEC’s project manager, Wally Roul, AMEC’s  
contract manager and Mr. Bailey seeking damages of an approximate minimum of $8.5 million  
and claiming a net project delay of three months (based on a construction completion date of July  
15, 2010). He attributed delays to a number of issues, for which he claimed Comstock bore no  
responsibility including lack of quality and reliability of tender documents, lack of crane  
availability and crane breakdowns, lack of access to Master Project Schedule, and delays in the  
MCC room.  
16  
[83] At the end of the April 16, 2010 correspondence, Mr. Guite wrote:  
In accordance with the contract provisions that suggest that the Project Engineer is  
to make an initial determination on the above claim and request for time extension,  
we are prepared to discuss the same with you at this stage. However, given AMEC’s  
involvement in respect of the above claim, we suggest that AMEC is in a conflict  
of interest as it is being asked to make a determination on a claim that emanates  
from certain actions taken by AMEC and ask that you defer making any  
determination on that basis and further ask that this claim be sent to mediation as a  
first step for dispute resolution. If not resolved at that stage, we can then discuss  
the potential for arbitration.  
AMEC does not accept Comstock’s April 17, 2010 schedule  
[84] Mr. Breed wrote to Sean Murray on April 20, 2010 and stated that the April 17, 2010 schedule  
submission, which showed a construction completion date of July 16, 2010 was not accepted by  
AMEC, as AMEC had not agreed to a July 16, 2010 construction completion date; Comstock had  
added a section titled “extras” into the schedule for additional work that was awarded to Comstock  
for the contract or claims for additional compensation that had not yet been agreed to by AMEC  
and AMEC continued to disagree with Comstock’s activity percent complete for some of the  
equipment and with certain aspects of the schedule with respect to logic.  
[85] Mr. Breed was asked on cross-examination if July 15, 2010 would have been an acceptable  
date, but not July 16. He responded that neither was acceptable.  
[86] The schedule discussed at the weekly coordination meeting on April 27, 2010 showed a  
construction completion date of July 15, 2010. Comstock indicated at the meeting that it felt July  
15, 2010 could be met. AMEC did not indicate the schedule was accepted. However, AMEC  
requested immediate notification from Comstock if the end date of July 15, 2010 was not  
achievable.  
Comstock submits a further claim for compensation and extension of time April 28, 2010  
[87] On April 28, 2010, Mr. Guite sent further correspondence to AMEC and PCS. In this  
correspondence, Comstock requested specific extensions of time, including 20 weeks for late  
17  
availability of the cranes and subsequent breakdowns, 12 weeks for late and changed IFC  
drawings, eight weeks for unresolved change orders, and six weeks for extra material handling.  
[88] On May 4, 2010 Mr. Vecchio responded and requested further details regarding the alleged  
costs and schedule impacts. A revised schedule and a quantification of the additional costs was  
requested.  
[89] The same day, May 4, 2010, Mr. Guite wrote back to Mr. Vecchio, asking for fair and urgent  
considerations and Change Orders for the severe changes and associated huge additional costs to  
our negotiated and competitive lump sum tender” for the contract. By this point, Comstock’s claim  
amount was at $16,008,000.00 broken down as follows:  
1. Crane Issues (Net): $1,547,475  
2. Extended Duration Costs (CCL): $1,600,000  
3. Drawing Revisions (BtC [bid to construct]):$1,500,000  
4. Unresolved Change Orders: $1,300,525  
5. Additional Overtime/Acceleration: $3,500,000  
6. Tender vs As-Built Quantities: $800,000  
7. Extra Material Handling: $1,100,000  
8. Subcontractors: $2,500,000  
9. General and Miscellaneous Items: $1,560,000  
10. Late responses to RFI’s and Critical Items: $600,000  
[90] Mr. Guite indicated Comstock was willing and able to accommodate what it called PCS’  
accelerated completion date however:  
…with manpower loadings of more than 400 men versus planned levels of about  
180 men, extra overtime and second shifts that have an extra cost of over $3.5  
million, it would be unreasonable and very unfair to expect [Comstock] to  
continue expending many millions of dollars on extra or changed works without  
fair and reasonable Change Orders. To date the Owner’s consultant AMEC has  
not issued any Change Orders for extension of time, not a single day, and has not  
addressed or processed claims for huge delays and change conditions associated  
with the late cranes and revised drawings.  
May 4, 2010 weekly meeting  
[91] The May 4, 2010 weekly meeting minutes indicate:  
18  
Most recent schedule shows an end date of July 15th, which is not acceptable to  
AMEC. Currently showing 66.01% complete with 1.88% achieved last week.  
Comstock is constantly monitoring & reviewing the schedule AMEC is  
expressing concern regarding the achievability of this end date. CIC to be issued.  
The current accepted end date is May 31.  
AMEC HAS REQUESTED IMMEDIATE NOTIFICATION FROM  
COMSTOCK IF JULY 15th IS NOT ACHIEVABLE Comstock feels they will  
meet this date, the biggest concerns are currently ductwork & insulation.  
[92] At item 8.5 of the minutes, AMEC is noted as being concerned that activities are being  
pushed out until there is no float left.  
[93] On May 5, 2010 Mr. Bailey spoke with Peter Semmens, Executive Vice President of  
Comstock in three telephone conversations. Mr. Bailey’s notes of the phone calls are recorded in  
an email he sent to Clint Weiland (PCS in-house counsel) and Mark Fracchia, plant manager of  
the Penobsquis site. In summary, Mr. Bailey indicated he discussed having a claims person come  
in on behalf of PCS, but stated that this was in no way a settlement meeting and that Comstock  
was still obligated to put forth their change order claims in accordance with the contract. Mr. Bailey  
recorded that Mr. Semmens stated Comstock would not agree to continue the contract with change  
orders and a fixed price contract. However, Mr. Semmens called back within 10 minutes and stated  
Comstock was okay with allowing PCS to introduce a claims person to come in and look at the  
site and Comstock’s work and claims and they were okay to continue without cost-plus.  
Comstock presents two options  
[94] On May 6, 2010, Comstock sent AMEC and PCS correspondence indicating two options.  
Option one would be to complete the work by July 15, 2010, with a change order for $5.2 million.  
Option two was to revert to a standard work week to achieve a completion date of November 6,  
2010 at an estimated additional cost of $2.6 million.  
[95] By email dated May 7, 2010. Mr. Fracchia stated to Mr. Bailey regarding Comstock:  
I think we need to talk about the option of terminating them and bringing another  
contractor on board.  
[96] Mr. Vecchio replied to Comstock’s May 6 correspondence on May 7, 2010. He indicated  
option two, with a November 26, 2010 end date, was not acceptable. He also indicated AMEC  
19  
wanted more detailed backup regarding the first option set out in the letter and a resource loaded  
schedule demonstrating that the July 15, 2010 date was achievable. Mr. Vecchio cited General  
Conditions 47.9.1 and 47.9.3 of the contract dealing with change orders and the engineer’s  
authority to determine the validity of any claims when sufficient information and documentation  
had been received.  
[97] On May 8, 2010 Mr. Guite wrote back. In summary, he refuted the suggestion that AMEC  
had not received sufficient information from Comstock to make a determination on the request for  
a change order as set out in option one. He stated that AMEC was only delaying the process by  
asking for more information and not requesting to enter into discussions, at a minimum, which  
Comstock considered to be bad faith in terms of contract management. He indicated that Comstock  
took Mr. Vecchio’s letter as a rejection of the request for a change order to support a July 15, 2010  
completion date, and in the circumstances Comstock would revert to option two until AMEC made  
a final determination of the first option.  
[98] The minutes of the May 11, 2010 weekly meeting note that the most recent schedule showed  
an end date of July 15 which was not acceptable to AMEC. The schedule was currently showing  
68.46% complete. The current accepted end date was May 31. The minutes also state:  
COMSTOCK HAS GIVEN NOTIFICATION THAT THE END DATE IS BEING  
PUSHED OUT TO NOV 26TH AND THEY WILL BE LAYING OFF 200  
PEOPLE, EFFECTIVE IMMEDIATELY.  
AMEC REQUESTED WRITTEN NOTIFICATION OF THE NOV 26TH DATE  
AND MANPOWER ADJUSTMENT. COMSTOCK STATED THEY ARE  
PROCEEDING WITH OPTION 2 STATED IN THEIR LETTER DATED MAY  
6TH, 2010.  
[99] In his testimony, Mr. McLellan disagreed that Comstock stated they would be laying off 200  
people effective immediately. He said that Comstock’s head office was reviewing a reduction of  
their crews and would be telling Comstock when they would be doing it.  
[100] Mr. Breed testified that he recalled Comstock stating that they will be laying off 200 people,  
effective immediately.  
20  
[101] At the May 11 meeting AMEC requested a revised schedule be issued to reflect the new end  
date (November 26). Comstock agreed to submit it by the end of week.  
[102] On May 16, 2010, Comstock submitted a schedule. However, it was not revised to reflect a  
November 2010 end date. The covering email from Mr. McLellan states:  
Attached is our updated schedule.  
We are maintaining the July 15 end date and have not changed this date at this time  
and at this time do not have a firm finish date due to the following:  
1) Unknown date when the current changes in for approval will be approved.  
2) Continuing engineering changes  
3) The availability of the overhead cranes is an unknown  
4) Bucket Elevator Components being sent back to manufacture, Unknown when  
these will return.  
5) Chutes being sent back to fabricator Unknown when these will return.  
6) Open CIC’s unanswered  
[103] The next day, May 17, 2020, Mr. Bowes wrote to Mr. McLellan and stated:  
Based on a preliminary review of the CP15 Comstock Construction Schedule  
AMEC has concerns regarding Comstock’s ability to complete the Contract Work  
in a timely fashion, in particular your ability meet the current indicated overall  
construction completion date of July 15, 2010.  
Effective immediately, please forward a weekly report with your weekly  
construction schedule as follows;  
1. A three week lookahead schedule showing planned versus actual for the previous  
week, and the planned work for the current week and the following week. The  
activity breakdown should be such that no activity is longer than 10 days, and should  
include all Subcontractors work.  
2. Detailed explanations, in point form, for planned activities that did not get  
completed the previous week and the remedial action planned to ensure overall  
schedule and construction completion date is maintained.  
3. Planned activities on the forthcoming two week period that are dependant on  
outstanding Engineering information, materials deliveries, or Owner information  
should be clearly identified.  
4. A compilation/distillation of the information contained in the Daily Reports for  
the previous week, in particular daily manpower on site for the period, broken down  
by trade classification.  
21  
Continuing with our current submittal schedule, please provide the weekly report  
and schedule 48 hours before the CP15 - Weekly Construction Progress Meeting.  
[104] Mr. McLellan responded on May 18, 2010:  
We would be happy to bring in additional forces to comply with your request for  
additional submissions. However to complete this we would require a change order  
for the additional staff required. Upon the receipt of the change order we will  
comply with your request.  
In the meantime the July 15 date will be unachievable and we are reviewing the  
schedule and will provide a revised schedule as per contract.  
[105] Mr. Bowes responded the same day that the requested submissions were not additional to  
Comstock’s scope of work but were required by General Condition 20.3.2.1 of the contract.  
Comstock requests extensions to the schedule for changes to the work  
[106] In May 2010, Comstock began seeking extensions of time in relation to ongoing changes to  
the work that were being issued by AMEC. Mr. McLellan initially wrote in the extension of time  
sought on the approved Change Order when it was returned to him signed by AMEC and/or PCS.  
[107] Mr. Bowes wrote to Mr. McLellan and advised this practice of marking up signed change  
orders was unacceptable and did not comply with the requirement that Comstock give seven days  
notice of any delay/anticipated delay, pursuant to G.C. 23.3.  
[108] Comstock also submitted some quantified requests for extensions of time along with its price  
quotations for a number of changes that resulted in Change Orders. AMEC accepted that two of  
these warranted an extension of time.  
[109] On May 17, 2010, in response to a request from AMEC for a quotation to remove and  
reinstall the force feeders, Mr. McLellan submitted a quote for a total lump sum price of $67,604  
and included on the correspondence the following statement:  
Please Note! Any delay in responding to these changes may result in additional  
charges for delays or rework.  
22  
The schedule will require to be extended by two weeks for the work to be completed  
on this change.  
The schedule will be required to be extended a further 6 weeks after the work  
associated with this change is completed to complete assembly of Compactors.  
A further schedule extension of four weeks is required to install chutes that cannot  
be accessed due to the above work being completed  
Based on the above we are requesting a 12 week extension to the schedule. This  
extension will start 5 days after the receipt of the change order.  
Additional charges for Overhead Site Expenses shall be extra after May 31 2010  
and will be charged under a separate change.  
[110] On May 18, 2010, Mr. Bowes responded to the quotation given by Mr. McLellan for the  
force feeders stating:  
Brian:  
Please proceed with this work in accordance with the total lump sum price  
submitted. Based on your quotation a schedule extension of 12 weeks to the  
Contract schedule end date of May 31st is accepted. This schedule extension  
pertains only to the work of the force feeders. A Contract Change Order will follow.  
[111] Also on May 17, 2010 Mr. McLellan submitted a quotation in relation to CCL 9127: reinstall  
cooling tower pumps. He provided a quote of $52,226. Mr. McLellan wrote:  
Please Note! Any delay in responding to the changes may result in additional  
charges for delays or rework.  
The schedule will require to be extended by two weeks for the work to be completed  
on this change.  
The schedule will be required to be extended a further 2 weeks after the work  
associated with this change is completed to compete the alignment.  
A further schedule extension of two weeks is required [to] complete the electrical  
after the alignment is completed.  
Based on the above we are requesting a 6 weeks extension to the schedule. This  
extension will start 5 days after receipt of this change order.  
Additional charges for Overhead Site Expenses shall be extra after May 31, 2010  
and will be charged under a separate change.  
23  
[112] Mr. Bowes responded on May 18, 2010 stating that Comstock was to proceed with the work  
in accordance with the total lump sum price submitted and that a schedule extension of six weeks  
to the contract schedule end date of May 31, 2010 was accepted. However, the schedule extension  
pertained only to the work of reinstallation of the cooling tower pumps.  
[113] On May 19, 2010 Mr. Guite responded to Mr. Bowes’s correspondence regarding the  
marked-up change orders not being acceptable requests for extensions of time. Mr. Guite called  
his correspondence on behalf of Comstock a “reservation of rights”. He pointed out the length of  
delay associated with approval of four change orders (023, 026, 028, 034) ranged from 24 to 55  
days and stated that PCS was in breach of the contract in terms of delayed approvals of requested  
changes. Mr. Guite wrote that AMEC could “treat the whole issue as a further notice of claim”  
that the damages incurred are ongoing.  
[114] At the end of the letter Comstock stated:  
“You are already on notice of our request for extensions. Our April 16, 2010 letter  
requested an extension of time to July 15, 2010. With the more recent rejection of  
our request for premium time, you have notice of a November 2010 completion  
date. Why would Comstock submit a further letter for an extension of time in  
respect of the above change orders, as AMEC has suggested, when the actual time  
extensions requested on each change order has been noted on that specific change  
order?”  
[115] On May 20, 2010, Mr. Guite wrote to AMEC and PCS requesting their design engineers  
attend the weekly coordination meetings and be on site as a means to try to manage ongoing design  
changes which did not appear to be declining in number. Mr. Guite also asked for a copy of the  
AMEC/PCS agreement.  
[116] Mr. Guite sent further correspondence dated May 20, 2010 to AMEC and PCS. He stated  
Comstock was consistently being asked to update schedules and that it could not account in  
schedule updates for the volume and timing of changes or the time it would take to approve  
changes. He included a table setting out the total quantity of drawing revisions between August  
24  
2009 to April 2010 and stated it would greatly help if Comstock knew the status of drawing  
revisions from AMEC.  
May 21, 2010 Meeting between Comstock and PCS  
[117] On May 21, 2010, a meeting took place in Toronto between Comstock and PCS. No  
representatives from AMEC were present. Mr. Bailey, Mr. Fracchia and Mr. Frehlich, PCS’  
surface project coordinator met with Bob Quinn, then President of Comstock and Peter Semmens.  
Mr. Bailey testified that PCS agreed to the meeting to hear Comstock’s concerns.  
[118] Mr. Frehlich took meeting notes. These notes indicate Mr. Quinn and Mr. Semmens outlined  
Comstock’s complaints and frustrations with the crane issues and AMEC engineering issues,  
among other things they believed had impacted Comstock’s productivity and Mr. Quinn indicated  
that Comstock thought the project was a $60 million job and that the build was something totally  
different than what they had bid on.  
[119] The minutes indicate Comstock put forward a recommendation that it be paid for work to  
date and complete the remainder of the job under a T and M (time and materials) contract. Mr.  
Quinn is noted as stating that if nothing was resolved soon Comstock would have to end all  
premium time and go to a 40 hour work week with approximately 250 personnel which would  
push the schedule out into the new year. He is recorded as stating we (Comstock) have no intention  
to leave the job, but are downsizing to match engineering.  
[120] The minutes indicate Mr. Bailey said PCS had to take this back and find some middle ground  
in order to make a decision on the path forward. He also stated that if any of the previous finish  
dates were of major concerned to PCS, Comstock would have heard from PCS long ago. He  
indicated that basically there were three options:  
1. Terminate Comstock’s contract  
2. Continue with current contract and use the change order process  
3. Proceed with Comstock’s recommendation.  
25  
[121] Mr. Bailey agreed on cross-examination he was referring to termination for convenience at  
this point.  
AMEC requests schedule update  
[122] On May 28, 2010 Mr. Vecchio wrote to Mr. Guite indicating Comstock’s schedule  
submission for that week was late. He noted G.C. 19.3 (schedule format) and G.C. 20.3.2.1 (weekly  
reports).  
[123] Mr. Vecchio stated that Comstock was required to provide an updated schedule to be  
presented and reviewed before the next weekly meeting scheduled for June 1, 2010 and that the  
schedule must incorporate the requirements in GC 21.1 (hours of work) including but not limited  
to a defined critical path, complete with logic and finish/start relationships, and it should reflect  
the current scope of work including approved change orders and any field work orders.  
[124] Also on May 28, 2010 in partial response to Mr. Bowes’ May 17, 2010 request, Mr.  
McLellan sent a list of planned activities not completed, and planned activities for the next week  
dependent upon approval. Mr. McLellan noted that a number of items were reliant on AMEC: for  
example Comstock was waiting for AMEC to advise about modifications and to provide support  
material for certain chutes.  
Comstock’s schedule shows completion dates in October 2010  
[125] On May 30, 2010 Comstock submitted a revised schedule, showing a construction  
completion date of October 6, 2010. In the accompanying correspondence Mr. Guite again  
indicated that Comstock could not account for the volume and timing of changes and time it would  
take to approve changes by AMEC and PCS in its scheduling updates and requested the status of  
drawing revisions from AMEC.  
[126] Mr. Guite wrote:  
This requested information is key for Comstock to prepare any reasonable form of  
schedule. You have not answered our request and as a result, we have not been able  
to prepare revise schedules.  
26  
You will recall that GC 19 of the contract makes time of the essence. Here we are  
some 10 days after our request without a response from you on that request and  
without an explanation for the non-response. Given that conduct, PCS is in breach  
of GC 19 and its conduct interfered with her ability to prepare schedules.  
Despite your inability or unwillingness to respond to our May 20, 2010 request, we  
attach an updated schedule which remains qualified to the extent that further design  
changes are to come, and further, on the continued impact of cash flow delays and  
delays with approvals for change orders, changes, RFIs etc.  
The contractual completion date is not met  
[127] The May 31, 2010 contractual completion date came and went. At the weekly coordination  
meeting on June 1, 2010, it was noted that the construction schedule showed an end date of October  
6, 2010. The minutes reflect that AMEC was of the view the schedule still required some review  
and revision of manpower, as the critical path was not clear. AMEC noted Comstock was  
overmanned. Comstock stated that they were trying to finish early and that a Comstock scheduler  
would be on-site and would work with AMEC schedulers on this review. Comstock indicated it  
would be constantly reviewing and reassessing its manpower requirements.  
Mr. Bailey and Mr. Semmens have another telephone conversation June 3, 2010  
[128] On June 3, 2010, Mr. Bailey had a telephone conversation with Peter Semmens. Mr. Bailey  
reported in an email to Mr. Fracchia, Mr. Frehlich, Mr. Weiland and Duane Gingrich, AMEC’s  
vice president of mining, that Mr. Semmens had indicated he had a lot more change orders to  
submit, and he knew he was at $41 or $42 million with current base plus change orders to date and  
he believed that his package would get them up to around $55 or $56 million.  
[129] Mr. Bailey’s email notes indicate that Mr. Semmens still wanted to try to work on some  
reimbursable deal but he clearly understood PCS was continuing with the base plus change order  
process.  
[130] Mr. Bailey’s notes also indicate he and Mr. Semmens talked about the schedule submittal  
(i.e. the May 30, 2010 schedule that showed an October 6, 2010 completion date). Mr. Bailey’s  
notes state:  
27  
…We believed that October 6, 2010 was an obtainable date. He just needed to keep  
his productivity up and he could get there affordable. He believes that date is  
obtainable as well.  
[131] Mr. Bailey’s notes also indicate he asked Mr. Semmens: Does Comstock want to finish this  
job?and Mr. Semmens answered “Absolutely yes”. Mr. Bailey then asked: Would Comstock  
rather just try and stop the bleeding and/or mitigate their losses at this point in time?” Mr. Semmens  
answer was “No, want to finish the job and get back on our good side and AMEC’s good side”.  
[132] The conversation concluded with Mr. Bailey and Mr. Semmens agreeing that Mr. Semmens  
and his team would come to New Brunswick to spend a day or two going over everything they had  
to present.  
[133] On June 7, 2010, Mr. Vecchio responded to the May 20, 2010 letter from Comstock asking  
for an engineer to be on site. He stated that a mechanical engineer had been assigned to the site  
team. Mr. Vecchio declined to provide Comstock with a copy of the AMEC agreement with PCS.  
Arrival of Mr. Neis and Mr. McElhinney  
[134] Mark Neis, a professional engineer and employee of AMEC had arrived on site June 6, 2010  
at the request of Mr. Vecchio. Mr. Neis was tasked with reviewing Comstock’s claims in order to  
make a determination in accordance with the contract.  
[135] Around the same time, Owen McElhinney was brought on site by PCS. Mr. Fracchia testified  
Mr. McElhinney was retained by PCS counsel to review and provide opinions on some of the  
claims received from Comstock. Mr. Neis testified he understood Mr. McElhinney was to assist  
him in determining the claim. Mr. McElhinney set up an office in AMEC’s trailer.  
The Mackenzie Report  
[136] At some point prior to June 9, 2010, Mr. Mackenzie, an AMEC estimator came to site and  
prepared a report. The report, entitled “June 3 Contract Cost Summary Report” stated that the total  
28  
forecast to complete CP-15, including deviations but not including claims, was $42,805,854, of  
which $2.1 million was miscellaneous deviations (changes) waiting for approval.  
[137] The report is broken into two columns, one with the heading “Comstock” and the other with  
the heading “AMEC”. Total potential claims under Comstock’s column are $16,008,000. Under  
AMEC’s column, total potential claims are $6,798,825.  
[138] The report states the project total, including deviations and potential claims, due to schedule  
creepof five months (i.e. the project completion extending to October 2010) is $58,813,854 under  
the Comstock column and $49,604,679 under the AMEC column.  
[139] There is a note at the bottom of the first page of the document that states:  
It was discussed with Cheryl Collins that it is AMEC’s conclusion that Comstock  
has an additional 172,100 man-hours left to finish the work  
-If this is the case; based on 200 hours per month you would need 866 man months  
to complete  
-To be completed in 5 months, Comstock would need an average of 173 men for  
the duration to meet the October deadline  
[140] On June 9, 2010, Mr. Vecchio sent this report to Mr. Bailey and others at PCS and AMEC.  
June 11, 2010 meeting between Comstock, AMEC and PCS  
[141] On June 11, 2010, at the request of Comstock, a meeting took place between representatives  
of Comstock and AMEC, with a representative of PCS present, to discuss “unresolved issues”.  
Peter Semmens, Mr. Guite, and a Senior Estimator and an Estimating Manager attended on behalf  
of Comstock. Mr. Bailey and Joe Holmes, mill general superintendent, attended on behalf of PCS.  
Mr. Vecchio, Mr. Roul, Brad Thompson, construction manager, Mark Thompson, assistant  
construction manager and Mr. Neis attended on behalf of AMEC.  
[142] Comstock had sent out the proposed agenda for the meeting the day before. It included seven  
items for discussion (totaling $25.6 million):  
1. Out-of-sequence delivery of Owner-supplied equipment and materials as well  
as double and multi handling … cost: $1,483,981  
29  
2. Lack of timely and proper promised cranes (10T & 25T) … Cost: To follow  
3. Misrepresentations as to completeness of design at tender time and lack of  
promised IFC drawings and major changes between Tender and Revised  
drawings … Cost: $19,547,700…  
4. Extended duration costs due to imposed delays and changes… Cost: $4,576,552  
5. Major acceleration (Premium time, 2nd Shift, additional manpower, extra  
resources, etc.) to mitigate the imposed delays. Price is included in Item 3  
above. We have provided actual back-up for the money spent.  
6. Subcontractors claims & general and miscellaneous items … Cost: To Follow  
7. Comstock has reviewed the approved change order process and we feel that the  
approval has no real facts to cutting prices. So, due to the project’s unknown  
inefficiency factor, we feel we have the right to go back and re-price each  
change.  
[143] Mr. Holmes prepared a summary of the meeting which Mr. Bailey reviewed during his  
testimony. The notes indicate that Comstock presented the following options:  
Re-estimate lump sum and stick with current contract, but revised amounts  
Convert to cost-plus  
Hybrid of above 2 options  
Finish as-is and litigate  
[144] The notes state that Comstock indicated they can and will finish the job with an October 6,  
2010 completion. However, Mr. Vecchio did not believe this was possible unless there were  
significant changes, i.e. project management.  
[145] Mr. Neis proposed the plan forward was for AMEC to review the re-estimate and provide a  
recommendation to Mr. Vecchio which would be presented to Mr. Bailey. Comstock agreed to  
provide its re-estimate to Mr. Neis for review.  
[146] Either at or following the meeting Comstock provided AMEC with five binders of  
documents in support of its claims.  
Mr. Vecchio indicates AMEC will provide an initial determination of Comstock’s claims  
[147] On June 15, 2010 Mr. Vecchio wrote to Mr. Quinn in response to Comstock’s letters dated  
April 16, 2010 and June 10, 2010. Mr. Vecchio referenced the documents provided by Comstock  
30  
and also noted that in Comstock’s April 16, 2010 letter it had recorded an expectation that a net  
delay to the project might be three months.  
[148] Mr. Vecchio wrote:  
..it is my intention to issue an initial Determination for your disputed items no later  
than Friday, June 18th, 2010. Following receipt and review of the remainder of your  
supporting documents and your demonstration of entitlement to compensation  
under the Contract I will prepare a final Determination of the items in dispute.  
[149] By correspondence the same day to Mr. Quinn, Mr. Vecchio delegated his authority to Mr.  
Neis. The delegation reads:  
Pursuant to Article 12.4 of Schedule “B” – General Conditions of the Contract, I  
am delegating my duties and powers under the Contract to Mr. Mark Neis, Claims  
Manager, Picadilly Project whose signature appears below with the exception of  
articles 1.16, 5.2, 12.4, 24.0, 49.0, 50.0, 51.0, 52.0, 53.0 and 56.0. Mr. Neis will be  
responsible for the negotiation of all claims and disputes under the Contract.  
[150] Mr. Neis spent approximately a week reviewing the information Comstock had provided at  
the meeting, and obtained electronic documents from Al Wilson, Comstock’s estimating manager  
and Primavera versions of schedules from Matt Semmens.  
June 18, 2010 schedule update  
[151] In the meantime, Comstock’s June 18, 2010 schedule update still showed October 6, 2010  
as the construction end date. According to the June 22, 2010 weekly meeting minutes, Comstock  
stated they were trying to finish early. The schedule was not accepted by AMEC. Comstock is  
recorded as stating that they were not willing to spend additional resources on the schedule if it  
was not acceptable. AMEC is recorded as stating that it could not accept the schedule without  
knowing the cost implications of that acceptance. A formal CIC was to be issued by AMEC,  
requesting cost implications.  
[152] The minutes note that the schedule was showing 80% complete, but included several  
activities showing 100% that had not been signed off by AMEC. A CIC was to be issued by  
AMEC with clarification of the requirements for 100% completion for items to be commissioned.  
31  
Mr. Neisreport  
[153] Mr. Neis completed his review. He forwarded a draft of his report to Mr. Bailey and Mr.  
Gingrich on June 18, 2010. On June 23, 2010, he signed his report and sent it on to Mr. Vecchio.  
In summary, Mr. Neis’ report indicated that Comstock may be entitled to compensation in relation  
to changes to construction drawings, specifications or other documents; lack of crane availability;  
the premium portion of overtime labour, and major acceleration. His initial estimate of value of  
Comstock’s claims was $5,466,609.92 (versus Comstock’s claimed amount of $26,552,459.20)  
and initial estimated entitlement was 51%. Mr. Neis calculated an initial determination value of  
$2,803,226.94.  
[154] With respect to an extension of time, Mr. Neis indicated Comstock had not provided  
supporting documents to request an extension of the completion date of the work required in the  
agreement, and in particular the contractor had not provided a schedule showing a cause and effect  
which impacts the critical path. However, he had considered the items in dispute and possible  
delays to the work and at the most, he could recommend a one month extension to the completion  
date, i.e. to June 30, 2010.  
[155] Mr. Neis prepared a draft of a letter from AMEC to Comstock, along with his report. The  
letter stated that AMEC was recommending to PCS that it make three payments of $1 million and  
was granting Comstock a one-month extension such that the new completion date shall be June  
30, 2010. The draft letter also indicated payments shall be made on evidence Comstock Canada  
Ltd. remains committed to completion of the work at the earliest possible date and a final  
determination shall be made for the claims once Comstock submitted full and final supporting  
documents for each of the claimed items.  
[156] Although Mr. Neis had been delegated authority for the negotiation of all claims and disputes  
under the Contract, upon submitting his report to Mr. Vecchio, he went off site for approximately  
three weeks.  
32  
Mr. Vecchio indicates AMEC is prepared to recommend PCS pay Comstock $2.8 million  
[157] On June 26, 2010 Mr. Vecchio sent a letter to Peter Semmens. He stated that the information  
provided by Comstock at the June 11, 2010 meeting was insufficient to provide a final  
recommendation to the PCS. However, in a gesture of good faith and subject to reduction and/or  
claw back dependent on the outcome of the complete assessment, AMEC was prepared to  
recommend to PCS additional payments of $2.8 million. No extension of time was offered.  
[158] Mr. Vecchio concluded:  
To be clear, payments of any amounts will not be made unless Comstock can  
provide appropriate support to substantiate its claim. It is anticipated that Comstock  
will continue to work under the existing contract terms including processing of  
claims, conducting work relative to any scope changes and executing the work in  
accordance with the agreed weekly work week. We await explanation of your  
current de-staffing, non-compliance to work submitted via change order requests,  
FWOs or site instructions and the logic to support your schedule submittal that  
indicates a completion date of October 6, 2010.  
We will be in touch with details regarding the additional information and supporting  
materials Comstock will need to provide in order that AMEC carry out the final  
review of your claims.  
AMEC continues to seek schedule information from Comstock  
[159] On June 29, 2010 Mr. Bowes followed up on his email dated May 18, 2010 requesting from  
Comstock submissions regarding the schedule (three week lookahead schedule with no activity  
longer than 10 days; explanations of work not completed the previous week and remedial action  
planned; activities dependant on outstanding Engineering information, materials deliveries, or  
Owner information; compilation/distillation of the information contained in the Daily Reports for  
the previous week). He stated to Mr. McLellan that AMEC had yet to receive the contract  
deliverables requested.  
[160] Mr. McLellan replied the same day and reiterated his previous response that until Comstock  
received a change order for the letter delivered to AMEC in June, Comstock would be unable to  
submit the requested information.  
33  
No schedule update submitted for June 29, 2010  
[161] According to the June 29, 2010 weekly coordination meeting minutes, Comstock did not  
submit an updated schedule for that week. The minutes also note that the contractor was obligated  
to work a 50-hour week and was currently working five 8-hour days and was looking at working  
four 10-hour days starting the next week. Comstock stated they were awaiting a change order to  
continue the work for this contract and that all manpower and schedule issues would be addressed  
in a corporate letter to be issued to AMEC.  
Comstock responds to AMEC’s initial determination  
[162] On June 30, 2010 Mr. Peter Semmens wrote a 6 page letter to a number of people at AMEC  
and PCS including Mr. Bailey and Mr. Bailey’s superiors in response to Mr. Vecchio’s June 26,  
2010 correspondence indicating AMEC was prepared to recommend to PCS additional payments  
of $2.8 million.  
[163] Mr. Semmens indicated Comstock’s view that it was being led along by PCS into believing  
that PCS intended to try to resolve the situation and he reiterated Comstock’s view that AMEC  
was in a conflict of interest. He referred to the meeting between PCS and Comstock, without  
AMEC present, on May 21, 2010 and stated that Mr. Bailey suggested at that meeting three options  
for potential resolution:  
1. Call in a third party auditor to settle on a cost plus proposal with the negotiated  
fee.  
2. End the current contract and come to a settlement to date and continue to finish  
on a cost plus basis.  
3. Stay with the current contract and proceed with the claims via legal processes  
[164] Mr. Semmens also referred to the June 11, 2010 meeting at which Comstock submitted in  
excess of 2500 pages of documentation to support their claims (totaling over $25 million). Mr.  
Semmens went through what Comstock felt were deficiencies in AMEC’s response in providing  
the preliminary assessment of $2.8 million.  
34  
[165] At the end of the letter Mr. Semmens requested Mr. Bailey provide a written answer as to  
which of the three options as described at the May 21 meeting PCS wished to follow and a detailed  
response to its submissions on June 10.  
[166] In the interim Mr. Semmens asked that Comstock’s May and June draws be paid immediately  
with an additional $6 million to be credited towards claims resolution in lieu of the $2.8 million  
apparently suggested” by AMEC’s preliminary assessment.  
Notice of Default  
[167] On June 30, 2010 Mr. Vecchio sent Peter Semmens a Notice of Default of Contractual  
Obligations. It stated:  
This is notice of Comstock Canada Ltd.’s (the “Contractor”) default of the  
contractual obligations set out in the above mentioned contract, and is instruction to  
correct the default in the ten (10 ) Working Days immediately following the receipt  
of this notice.  
Specifically, with reference to the General Conditions of the Contract, GC 46.5.1,  
in the opinion of the Engineer;  
1. Contractor has failed, or is failing, to prosecute the work  
diligently.  
2. Contractor has failed, or is failing, to provide sufficient skilled  
and qualified labour and supervision.  
3. Contractor has failed, or is failing, to provide sufficient Plant or  
Materials or services.  
4. Contractor has failed, or is failing, to complete the work by the  
completion dates in the construction schedule.  
5. Contractor is performing the work in an inefficient manner.  
6. Contractor has failed to comply with the instructions of the  
Engineer with respect to the contractually required format and detail  
of the Construction Schedule [ GC 19.3.1] and the contents of notice  
of claims [ GC 47.6.1].  
[168] The Notice of Default concludes by stating:  
Comstock Canada Ltd. is hereby instructed to correct the defaults by July 15, 2010  
failing which PCS may, without prejudice to any other right of remedy PCS may  
have, suspend or terminate Comstock’s right to continue with the Work or terminate  
the Contract.  
35  
[169] Peter Semmens responded to the Notice of Default on July 6, 2010 with a 29 page letter.  
Among other things, he indicated that the Notice of Default contained insufficient detail and gave  
Comstock no direction on what items need to be specifically addressed.  
[170] Mr. Semmens then reviewed in detail Comstock’s claims and indicated Comstock believed  
it was entitled to at least a 10 month extension of time (net) and the projected total claim on a cost  
versus revenue basis was $25 million, in addition to amounts currently outstanding on the contract  
which Comstock put at $3.174 million. He requested an interim payment of $10 million and an  
extension of time from May to November 2010, failing which Comstock would commence legal  
proceedings within 90 days.  
No schedule update submitted July 6, 2010  
[171] The minutes of the July 6, 2010 weekly meeting note that Comstock did not submit a  
schedule update for the week. Comstock indicated it was waiting for Brian Guite to return to site  
before deciding how to proceed with the schedule.  
[172] On July 7, 2010 Mr. Vecchio wrote to Mr. Semmens reminding him that as per the contract  
Comstock was required to provide an updated schedule prior to the start of each weekly meeting  
and that in this regard the schedule submission was now late.  
Comstock submits schedule showing construction completion end date of October 29, 2010  
[173] On July 12, 2010 Comstock submitted a schedule dated July 9, 2010 showing a construction  
completion end date of October 29, 2010. In the cover letter, Comstock stated:  
As requested, attached herewith please find a copy of our updated schedule. Special  
attention is directed to the following items that cannot be determined or properly  
reflected in our updated schedule at this time. Namely:  
1. Despite numerous and repeated requested for change orders for  
extension of time to the original contract, we still do not have  
even a single day extension granted.  
2. Ongoing design and engineering changes prevent  
determinations of realistic completion dates. Please confirm  
when Comstock will receive this outstanding data.  
3. In excess of $4 Million for change orders have already been  
approved or certified and an additional $2.6 million are pending  
or outstanding. I.e. about $7 Million of changes, however not a  
36  
single day of extension of time has been granted to Comstock.  
Be also advised that such changes cannot be determined and  
properly scheduled until we receive the change orders and fair  
extensions.  
4. As of July 12, 2010 a few months after the original completion  
date, numerous RFI’s remain outstanding, which creates  
“Holds” on many work areas . Again it is not possible to properly  
reflect such belated and frustrating disruptions in our attached  
schedule.  
5. Our previous request for acceleration/overtime were not  
accepted or addressed; accordingly we cannot reflect such  
mitigated efforts into our schedule.  
In summary we reiterate the fact that it is not possible to prepare definitive or  
accurate schedules without fair, proper and reasonable design/engineering data,  
viz:  
1. Change Orders  
2. Final IFC drawings and revised IFC drawings  
3. Final IFC specifications and revised IFC specifications  
4. Reasonable and timely responses to RFIs  
5. Notice when final IFC data will be provided  
6. Confirmation of deleted scope of work  
7. Confirmation of any more additional scope of work  
We respectfully request your urgent provision to the above listed information so  
that we may be in a position to determine the true status for an accurate revised  
schedule. A detailed listing or holds, late RFI’s and outstanding change orders will  
be prepared and issued later this week.  
[174] The July 13, 2010 weekly coordination meeting minutes state: “hours have been added,  
percentage complete has dropped a bit, but Comstock states they are still trying to achieve this  
date [October 29, 2010].” The minutes do not indicate what percentage complete was showing on  
the schedule.  
[175] By letter dated July 16, 2010 Mr. Vecchio responded to Comstock’s July 12, 2010 schedule  
submission, stating:  
May we remind you that the purpose of the work schedule is to provide, along with  
three-week look-ahead schedules and daily, weekly and monthly reports, the  
information needed to plan the completion of the work.  
37  
AMEC has reviewed your listed “items” and finds that they are not relevant to the  
provision of an updated work schedule.  
Using the numbering system in your July 12, 2010 letter, we respond as follows:  
1. The completion date for the work has not been extended because Comstock has  
not provided a quantified request for extension of time for completing the Work  
that meets the requirements of GC 23.3 or that satisfies the conditions of GC 23.8,  
Critical Path Delays.  
2. The schedule can be updated based on the known Construction Documents at the  
time.  
3. The schedule can be updated based on the work to complete, which includes  
changes in the work. There is no need to wait for the finalization of Change Orders.  
4. The schedule can be updated to show the date that “holds” need to be removed  
for performance of that part of the work.  
5. The Contractor is obliged to take all steps to complete the work as soon as  
possible at its own expense unless directed otherwise by the Engineer.  
Consequently, AMEC does not accept that it is not possible to prepare an updated  
schedule of the work to complete. Comstock was notified on June 30, 2010 of its  
default of the Contract with respect to submission of schedules and Comstock is  
required to correct this default forthwith.  
[176] On July 16, 2010 Mr. Bailey responded to Comstock’s June 30, 2010 letter in which it had  
indicated it felt PCS was leading it on with respect to its claims. Mr. Bailey stated PCS’  
disagreement with Comstock’s position that PCS had agreed to a resolution of Comstock’s claims  
at the meeting on June 11, 2010, or that AMEC was in a conflict of interest. At the end of the letter  
Mr. Bailey referred to Comstock’s repudiation of the contract and misuse of without prejudice  
discussions at the June 11, 2010 meeting.  
[177] On July 17, 2010, Mr. Neis who had returned to site, wrote Mr. Bailey an email attaching a  
flowchart for termination of the CP-15 contract with Comstock. He stated:  
Our letter No.8.6.1 E156930-Ltr022 dated June 30th, 2010 alleges the contractor is  
in Default without specifying any specifics. However, to my knowledge the  
contractor’s methods of construction have been consistent throughout the entire  
contract.  
38  
Notwithstanding that the contractor’s performance has been pour and that the  
Contractor is unlikely to complete the Works by the end of October (without a  
substantial improvement in performance) more detail is required to terminate the  
Contract for default by the Contractor.  
I would also point out the following:  
i.  
“GC 46.2 Termination for Convenience” provides seven (7) days continued  
work and five (5) days to finalize the contract sum.  
ii.  
“GC 46.5.1 Termination for Default by Contractor” is effective  
immediately on issue of a Suspension or Termination Notice.  
As such, termination under GC 46.5.1 would enable Comstock to just walk away  
and leave everything!  
I have walked through the site yesterday and today. Completion by the end of  
October is possible but not the way the work is being executed by Comstock. I  
agree that changes need to be made to ensure completion in a timely manner.  
Schedule is submitted July 19, 2010  
[178] The final weekly coordination meeting took place July 20, 2010. The minutes indicate  
Comstock had submitted a schedule on July 19, 2010 and AMEC was reviewing it. Changes would  
be made and the finishing schedule would be submitted. Energization of the compaction plant was  
scheduled for August 20.  
[179] The minutes also indicate that Bill Sargent (Navigant) was in attendance on behalf of  
Comstock. Mr. McLellan testified that he was a “third party” scheduler that Comstock brought in  
because of all the complaints from AMEC. He was going to be involved in the finishing schedule.  
However no finishing schedule was prepared or submitted, as CP-15 was terminated on July 21,  
2010.  
The contract is terminated  
[180] With respect to the decision made by PCS to terminate the contract with Comstock, Mr.  
Bailey testified he had not wanted to terminate the contract in May 2010 when Mr. Fracchia was  
suggesting it, as starting with a new contractor always adds cost and time. However, by July 21,  
2010 no headway was being made with Comstock. He said he did not think Comstock had a clue  
how long it would take to finish the contract.  
39  
[181] Mr. Neis was delegated to deal with the termination. He invited Mr. Guite and Mr. McLellan  
to meet with him and Mr. Fracchia on July 21, 2010. Mr. McLellan and Mr. Guite attended the  
meeting and Mr. Fracchia handed them a notice of termination of CP-15 signed by Mr. Bailey, and  
asked that Comstock be off site by 4:30 p.m. that day.  
[182] The Notice of Termination states:  
We are writing further to AMEC’s letter of June 30, 2010 (No.8.6.1 E156930-  
Ltr022) providing notice of Comstock’s defaults of its contractual obligations. In  
consultation with the Engineer, we have determined that Comstock has failed to  
correct the defaults in the 10 Working Days following the receipt of that  
correspondence.  
Despite PCS and AMEC’s efforts to work with you, particularly over the past three  
months, you have failed to carry out the work in accordance with the provisions of  
the contract. Due to a number of such contract breaches, which continue to occur,  
we do not believe you have the ability or intention to complete your obligations  
under the contract in a timely and cost-effective manner. The fact that the schedule  
completion date has passed means that PCS will suffer significant losses which can  
only be mitigated by bringing the job to completion without further delay. In our  
view this can only be accomplished by terminating our contract and hiring a third  
party to complete the work remaining.  
Accordingly, PCS is terminating the Contract with Comstock in accordance with  
section 46.5.2 of the contract effective immediately.  
This termination is without prejudice to any other right or remedy PCS may have.  
In order to effect an orderly transition, we ask that you please direct all future  
communications to the Mark Neis of AMEC. This would include requests for  
access to the site and inquiries regarding the return of equipment…  
Events after termination  
[183] The next day, Mr. McLellan met with Mr. Neis who advised that AMEC was hiring another  
contractor, Lockerbie and Hole, to remove tools from the site and return them to Comstock. Mr.  
Neis sent correspondence dated July 22, 2010 directing Comstock to vacate the site and outlining  
the transition process for returning tools and equipment to workers, returning files, etc. The same  
day Mr. Neis recommended that AMEC and PCS suspend all payments to Comstock under the  
contract.  
40  
[184] On July 26, 2010 Peter Semmens wrote Mr. Bailey in response to the notice of termination.  
He stated Comstock was disputing PCS’ ability to terminate it for cause and would proceed as if  
it was terminated for convenience.  
Completion of the project  
[185] Mr. Bailey brought AMEC in to assist with completion of the project. He testified PCS and  
AMEC determined it was best to do the completion work on a time and material basis because it  
would be difficult to finish the project on a lump sum basis, due to the risk on the completion  
contractor if the first contractor had made mistakes.  
[186] Tender documents were issued for the completion contract for the compaction plant  
mechanical, HVAC, piping, electrical and instrumentation work on a time and materials basis. The  
completion contract was referred to originally as CP-15A and later changed to CP-78.  
[187] An Invitation to Tenderers issued July 30, 2010, with a tender closing date of August 11,  
2010. It indicated work a tentative start date for the work of September 7, 2010. Construction was  
to be completed by late November or early December 2010.  
[188] The Scope of Work included in the tender documents stated at section 1.1:  
General Work Scope Description  
The contractor will complete the remaining work in the Compaction Plant in  
Mechanical, Piping, HVAC and Electrical and Instrumentation. The necessary  
Construction Drawings and Specifications will be provided to the Contractor by the  
Engineer. The Work will encompass an estimated 100,000 man-hours.  
Attachment A to this Scope of Work contains the original Scope of Work for the  
Compaction Plant which was issued on a lump sum basis and was only partially  
completed. This attachment is included for information only.  
[189] Three contractors were invited to submit bids: Lockerbie and Hole Eastern Inc.  
(“Lockerbie”), Lorneville Mechanical and Black & McDonald. Black & McDonald did not  
submit rates. Lockerbie had bid on the original tender for CP-15 and was doing other work in the  
compaction plant under a different contract. Lockerbie submitted a bid of $13,463,013.93  
41  
compared to Lorneville Mechanical’s bid of $14,574,480.83 to complete the work over 15 weeks  
with 150,000 manhours. AMEC recommended Lockerbie.  
Lockerbie is awarded completion contract  
[190] PCS and Lockerbie entered into contract CP-78 on August 19, 2010. The value of the  
awarded contract was $14,072,373.60.  
[191] Through a series of change orders, the estimated man-hours and the contract sum increased  
as Lockerbie performed the work. On December 14, 2010, Lockerbie estimated total man-hours  
to completion would be 236,140 direct and 13,600 indirect hours. This increased the contract sum  
by $8,348,005 as indicated in Change Order 6 for CP-78.  
[192] Change Order 9, dated February 11, 2011 revised manhours to 310,000 man-hours. This  
increased the contract sum by $5,885,719.02 to $29,031,363.85.  
Final Completion of the work occurs in July 2011  
[193] Lockerbie completed CP-78 on a substantial completion basis in April 2011. A certificate of  
final completion was issued in July 2011 with a final contract price excluding HST of  
$34,655,798.29.  
Financial Records  
a) Comstock’s financial records  
[194] Dennis Forlin, Comstock’s VP of Finance, gave evidence about Comstock’s financial  
records. These records, marked as Exhibit 25 volumes 1 to 5, were relied upon by Comstock’s  
expert, Mike Dean of PCCI in preparing his job cost variance analysis.  
[195] Mr. Forlin’s evidence satisfies me that these records were made in the regular course of  
Comstock’s business, are relevant to matters in issue and were made at or near the time of the  
event that they record, being the labour hours and costs incurred on CP-15. I therefore accept these  
records are admissible as evidence of the matters stated in the records pursuant to section 49 of the  
Evidence Act, R.S.N.B. 1973, c. E 11.  
42  
b) Comstock’s losses on project  
[196] I accept from Mr. Forlin’s evidence that Comstock’s records showed actual costs on CP-15  
were $50,757,902. Its original cost estimate, plus change order costs, totaled $37,103,342.  
[197] Mr. Forlin indicated Comstock had a revenue loss of $12,678,000, not including the  
outstanding MechanicsLien holdback amount and unpaid amounts for work completed in June  
and July 2010. The amount of the outstanding MechanicsLien holdback is disputed.  
c) Comstock’s Applications for Payment  
i) Comstock’s Application for payment for May 2010  
[198] On June 16, 2010 Mr. Breed certified Comstock’s Application for Payment for the month of  
May 2010. Comstock had submitted an invoice of $3,174,000.89 (total billing for the period of  
$3,304,529.82 less 15% holdback +13% HST). The amount was approved.  
[199] According to the information on the application, approved change orders as of May 31, 2010  
were $3,943,724.18 for a total contract amount of $40,222,694.53.  
ii) Comstock’s June 2010 application for payment  
[200] Comstock’s submitted an Application for Payment for June 2010 in the amount of  
$2,353,102.53 on June 26, 2010.  
[201] AMEC did not agree with the amount submitted. On July 21, 2010, Mr. Breed certified  
payment to Comstock for the month of June 2010 in the amount of $656,894 ($683,908.61  
inclusive of holdback). Ultimately, Mr. McLellan signed the certification for payment. Comstock  
has not been paid the amount certified.  
[202] Total contract change orders were at $4,210,071.00 for a total contract value of  
$40,489,241.91 with the June 2010 amount that AMEC certified for payment.  
43  
iii) Comstock’s July 2010 application for payment  
[203] Comstock’s application for payment for the period July 1, 2010 to July 31, 2010 is dated  
July 31, 2010 and is in the amount of $3,256,065.00 ($389,968.78 less 15% holdback plus 13%  
HST).  
[204] On September 13, 2010 Mr. Breed indicated $0 was certified for payment.  
[205] However, information provided by AMEC in response to an undertaking given at  
Examination for Discovery by Mr. Roul indicates that at some point after termination AMEC  
determined work had been done in July 2010. AMEC determined the value of the work at  
$625,245.09 for the period July 1, 2010 to July 30, 2010. It is not clear that this was ever conveyed  
to Comstock by AMEC. It is not disputed that Comstock did not accept this amount, and no amount  
has been paid for work completed in July 2010.  
Payments to Comstock  
[206] Cornell DeWinter, senior accountant for Nutrien (PCS’ parent company) testified about  
PCS’ financial records. He testified PCS paid Comstock $31,396,728.31 (HST included) for work  
approved for payment up to the end of May 2010. This includes an amount that PCS says it paid  
to Comstock in error as it should have been held back as part of the MechanicsLien holdback.  
Payments to Lockerbie  
[207] Mr. DeWinter testified PCS paid Lockerbie and Hole $34,655,798.29 plus 13% HST for a  
total of $39,161,052.06.  
[208] I accept Mr. DeWinter’s evidence as to what PCS’ records show was paid on CP-15 and CP-  
78.  
COMMENCEMENT OF THESE ACTIONS  
[209] On August 3, 2010 Comstock commenced these actions. The proceedings were stayed after  
Comstock received creditor protection from the Ontario Superior Court of Justice on July 9, 2013.  
44  
[210] The Ontario Court approved an Asset Purchase and Sale Agreement dated November 28,  
2013 between HB Construction Company Ltd. and Comstock. As part of that Agreement, HB  
purchased this litigation. (This Court found in a prior hearing in these proceedings that HB  
Construction acquired this litigation as part of the purchase and sale agreement at no cost to it.  
That finding was not appealed and the plaintiff did not lead any evidence to the contrary at trial.)  
[211] This Court issued Orders to Continue dated February 27, 2014, by which these actions were  
continued with HB Construction Company Ltd. (formerly Comstock Canada Ltd.,) as plaintiff.  
THE PLEADINGS  
[212] Comstock’s Third Amended Notice of Action with Statement of Claim attached (“the  
Claim”) was filed with the Court on January 7, 2019. At paragraph 23, Comstock claims that PCS  
and AMEC actions resulted in a number of breaches as follows:  
As a result of the impugned conduct described in the preceding paragraph and  
throughout this amended statement of claim, Comstock states that:  
(a) PotashCorp breached the contract in several material respects;  
(b) further or in the alternative, PotashCorp committed, in its own right or through  
its agent AMEC, a series of repudiatory breaches of the contract;  
(c) further or in the alternative, PotashCorp breached the collateral warranties  
and/or conditions made which induced Comstock into the contract;  
(d) PotashCorp and AMEC made misrepresentations, in the alternative negligent  
misrepresentations, about material elements in the Project Documents and Contract  
which induced Comstock into submitting a lump sum bid and into entering into the  
Contract;  
(e) further or in the alternative, Comstock states that AMEC undertook tortious  
interference with Comstock's contractual relations and economic interests with  
PotashCorp by inducing breach of contract by PotashCorp;  
(f) further or in the alternative, PotashCorp wrongfully repudiated the Contract; and  
(g) further or in the alternative, PotashCorp and AMEC breached their respective  
duties to act in good faith including having AMEC continue in its decision making  
powers while it was in a clear conflict of interest and in an appearance of bias and  
further, purportedly terminating the Contract.  
45  
[213] Comstock states at paragraph 31:  
As a result of AMEC’s and/or PotashCorp’s breaches of the Contract,  
misrepresentations, negligent misrepresentations, breaches of duties of good faith,  
AMEC’s tortious interference in the Contract and breaches of collateral warranties,  
Comstock has suffered damages and incurred costs and expenses including, but not  
limited to, additional labour and supervisory costs, premium, shift and overtime  
costs, extended site overhead costs, equipment and material costs, for which AMEC  
and/or PotashCorp is/are, at law, responsible.  
[214] Comstock claims damages as follows:  
76.1 In or around the time of the purported termination described herein, there  
remained:  
(a)  
(b)  
(c)  
$656,894.22 (HST Included) owing to Comstock from Comstock’s  
June 2010 application for payment,  
$1,709,122.78 (HST included) owing to Comstock from  
Comstock’s July 2010 application for payment,  
$2,215,178.00 (HST included) in statutory holdback (up to and  
including the July 2010 application for payment)(after payment of  
$3,297,962 to subcontractors, which was made after this proceeding  
was commenced to settle lien claims),  
for a total of $4,581,195.00.  
76.2 In addition, Comstock claims the sum of $13,500,613.98 representing  
damages incurred as a result of the wrongful acts committed by AMEC and  
PCS…  
77. Comstock claims against  
(a)  
PotashCorp for:  
i.  
payment of the sum of $4,581,195.00 for breach of contract,  
as described in paragraph 76.1 above;  
ii.  
in addition to the foregoing, damages currently estimated in  
the amount of $13,500,613.98 for:  
(1)  
breach of contract and/or breaches of collateral  
warranties;  
46  
(2)  
(3)  
in the alternative, for breach of the duty to act in good  
faith;  
in the alternative for misrepresentation or negligent  
misrepresentation;  
iii.  
iv.  
in the alternative, on Comstock’s election, compensation  
currently estimated in the amount of $18,081,808.98 on the  
basis of quantum meruit for wrongful repudiation of the  
Contract or independent of the wrongful repudiation of the  
Contract.  
and/or in the alternative, compensation and/or restitution  
currently estimated in the amount of $18,081,808.98 for  
unjust enrichment;  
v.  
HST on any applicable sums; and  
vi.  
further, or in the alternative, a declaration that the Contract  
is void for uncertainty or in the alternative, voidable;  
(b) AMEC for:  
i.  
Damages currently estimated in the amount of  
$18,081,808.98 plus HST as applicable for:  
(1)  
tortious interference with the contractual relations  
and economic interests,  
(2)  
(3)  
in the alternative, inducing breach of contract;  
in the alternative, misrepresentation or negligent  
misrepresentation;  
(4)  
in the alternative, for breach of the duty to act in good  
faith;  
(c) Both Defendants:  
i.  
damages arising from the Defendants’ wrongful conversion  
of Comstock’s Personal Property (forming part of the  
$18,081,808.98 in damages claimed);  
ii.  
punitive and/or aggravated and exemplary damages;  
costs of this action on a solicitor and client basis;  
iii.  
47  
iv.  
v.  
interest pursuant to ss. 45 and 46 of the Judicature Act, R.S.N.B.  
1973, c. J-2, and/or the Contract, as well as any applicable taxes;  
and  
such further and other relief that this Honourable Court may deem  
just.  
[215] Comstock’s claim against PCS and AMEC for punitive and/or aggravated and exemplary  
damages were specified at trial to be $5,000,000. Comstock indicated in its closing arguments it  
was not pursuing a claim on the basis of quantum meruit or a claim for wrongful conversion of  
property.  
[216] PCS filed an Amended Statement of Defence and Counterclaim on January 8, 2019. PCS  
denies any liability for breach of contract or misrepresentation, breach of the duty of good faith in  
contractual relations or unlawful interference with economic interests. It claims that the contract  
specifically excludes any tortious liability on the part of PCS.  
[217] PCS claims a set off against Comstock as follows:  
105.  
The Defendant repeats the allegations contained in paragraphs 1 to 104 of  
the Amended Statement of Defence above.  
106.  
The Defendant pleads and relies on the Form of Tender whereby Comstock  
agreed to diligently and faithfully perform and complete the work for the lump sum  
value stated therein.  
107.  
The Defendant states that Comstock represented, through its Execution  
Plan, that Comstock would execute its plan and schedule to maintain and control  
the cost of the project.  
108.  
The Defendant pleads and relies on s. 55.1.1 of the General Conditions  
of the Contract:  
55.1.1  
the Work  
CONTRACTOR represents, warrants and guarantees that  
and all Materials, products, assemblies and goods  
and all components and parts thereof, supplied by CONTRACTOR  
and Subcontractors shall be free of defects and deficiencies in  
design, Materials and workmanship throughout the warranty  
period(s) stated herein; and, CONTRACTOR further represents,  
warrants and guarantees to make good any and all defects and  
deficiencies in the Work arising from the use of improper or  
48  
defective Materials or by reason of poor workmanship or  
inadequate design which may appear during the warranty period.  
CONTRACTOR is not relieved from this obligation by reason of  
the Certificate of Final Completion, final payment or anything  
contained in the Contract to the contrary.  
109.  
The Defendant states that Comstock carried out its work in a manner that  
resulted in cost overruns, project delays, and defects in the work.  
110. The Defendant states that Comstock has breached the Contract.  
111. The Defendant states that it has incurred damages due to Comstock's breach  
of the Contract.  
112. Therefore, the Defendant claims against the Plaintiff, as follows:  
i) Damages representing the incremental costs of retaining a new contractor to  
finish the work on the compaction plant;  
ii)  
Damages representing the costs to rectify deficiencies in Comstock's  
work; and  
iii)  
Interest pursuant to sections 45 and 46 of the Judicature Act. R.S.N.B. 1973.  
c. J-2 and/or the Contract.  
113. The Defendant pleads the damages and interest set out in paragraph 112 above  
by way of set-off in defence of the Plaintiff's claim, and the Defendant pleads and  
relies upon section 26 of the Judicature Act, R.S.N.B. 1973, c. J-2, including but  
not limited to subsections 26(4) and 26(5) and further pleads and relies upon section  
50.2 of the General Conditions of the Contract ("SET OFF BY OWNER").  
[218] AMEC filed its Second Amended Statement of Defence on January 7, 2019. AMEC denies  
any liability to Comstock, and argues that liability on the part of AMEC is specifically excluded  
under the contract.  
WITNESSES AND CREDIBILITY  
[219] The Court heard from 18 witnesses over 11 weeks, including the expert witnesses for the  
plaintiff and the defendants. This was a document-driven trial with well over 100,000 pages of  
documentary evidence tendered as exhibits.  
Factual witnesses  
[220] Comstock takes the position that none of the defendants’ witnesses were credible. The  
defendants take the position that most of Comstock’s witnesses lacked credibility.  
49  
[221] The factual witnesses for all parties had little independent recall of events. This is not  
surprising given that almost ten years had passed between the time Comstock was on the project  
and the trial itself. Most of the evidence-in-chief consisted of witnesses testifying to the contents  
of contemporaneous documents.  
[222] I do not reject the evidence of any witness outright. However there were areas of evidence  
from some witnesses that I did not find credible. Where it is relevant to my findings I will indicate  
the evidence I do not accept in my reasons.  
[223] Minutes of weekly coordination meetings between AMEC and Comstock were maintained  
by AMEC, and were circulated to attendees who had the opportunity to submit any revisions they  
felt were necessary. The CIC correspondence reflects the discussions on the issues as they arose  
at the time. Both the weekly coordination meeting minutes and the CIC correspondence were  
entered as exhibits on the agreement of the parties.  
[224] In light of the underlying frailties in all partiesevidence, where there are discrepancies  
between evidence of a factual witness and the above noted contemporaneous documents, I have  
deferred to the contemporaneous documents.  
The Expert Witnesses  
[225] Comstock retained Michael Dean of Pacific Construction Consultants Inc. (“PCCI”) as its  
expert witness. PCS and AMEC jointly retained Richard Fogarasi of HKA Global (Canada) Inc.  
as their expert witness.  
[226] On consent of the parties, the Court qualified both Mr. Dean and Mr. Fogarasi as follows:  
The Plaintiff’s and Defendants’ experts are qualified as expert in the analysis and  
quantification of construction claims, qualified to give opinion evidence,  
including in respect of the following:  
Schedule and delay analysis;  
50  
Labour productivity and deficiencies;  
Quantification of damages;  
Quantification and management of changes, including design changes;  
Contract management, construction progress and project delivery;  
as set out in their expert reports filed in these proceedings.  
Mr. Dean’s opinion  
[227] Mr. Dean’s expert report is dated December 2017. At page 6 of the report he sets out his  
mandate as follows:  
Both before and after termination, Comstock claims that it suffered significant  
losses as a result of circumstances outside of its control and which are the  
responsibility of AMEC and PCS. PCCI’s mandate (which is described in more  
detail below) was to assess and quantify these losses. As part of this analysis, PCCI  
has reviewed the Contract. Where appropriate, PCCI has referred to relevant  
portions of the Contract below. PCCI has not been asked to provide, and has not  
provided, its opinion with respect to any of the legal issues that are disputed  
between the parties, including the disputes with respect to the parties’ rights and  
obligations under the Contract.  
PCCI’s analysis encompasses Comstock’s entire performance. On the project from  
the commencement of its work in September 2009 through its termination in July  
2010. As discussed in this report and supported by the enclosed exhibits, PCCI has  
concluded that the issues identified by Comstock and discussed below caused  
compensable losses totaling $18,082,995.  
[228] Mr. Dean reviewed a number of documents that are listed at page 4 to 5 of his report  
including schedules, the contract, Comstock’s summary JCR, Comstock’s pay applications for  
May, June and July 2010, change orders, field work orders, purchase orders, photographs,  
correspondence between Comstock and AMEC and marked up plans.  
[229] Mr. Dean prepared various “impact logs” to plot on graphs the impact of what he attributed  
as causes of Comstock’s delays on the work “as planned” versus “as built”. He also used  
proprietary software to create his “JCVA” ( Job Cost Variance Analysis) using Comstock’s payroll  
and other accounting records. His work product is listed at page 5 of the report.  
51  
[230] Mr. Dean testified that in addition to reviewing the documentation listed in his report, he  
also met with Mr. McLellan, principally, and to a lesser extent Rick Allison, who was Comstock’s  
electrical superintendent and Barry Glassford, Comstock’s lead electrical estimator.  
[231] In summary Mr. Dean is of the opinion that:  
Comstock was precluded from timely performance and completion of its work on or before  
May 30, 2010 due to AMEC and PCS responsible delays including:  
o AMEC’s late completion of the building shell and enclosure;  
o AMEC’s late supply of construction documents for the Project;  
o AMEC’s late, incomplete and ever–evolving design of the Project;  
o AMEC/PCS’ dilatory change order processing on the Project;  
o AMEC’s improper rejection of Comstock’s request to use manlifts in connection  
with its work on the project;  
o AMEC’s numerous material and equipment procurement problems relative to  
Comstock’s work on the Project;  
o PCS’ failure to timely provide permanent power for the Project.  
Termination of the contract for default was not supported by materials he reviewed.  
At the time of termination on July 21, 2010 Comstock had completed approximately 86%  
of its contract scope;  
As of termination Comstock had pending quotations for over $1.8 million in added costs  
to perform changed and added work, for which Comstock would not otherwise have been  
responsible and that would have been necessary to perform before the Project could be  
completed. This $1.8 million in pending changes would have further delayed completion  
of the work.  
Comstock requested time extensions from AMEC/PCS, and AMEC recognized entitlement  
to some of those extensions and these would have prolonged the Project beyond the  
completion date of the contract and beyond the date of termination.  
[232] Mr. Dean is of the opinion that Comstock suffered losses totaling $18,082,995.00 including  
HST for which PCS/AMEC are responsible.  
52  
Mr. Fogarasi’s opinion  
[233] Mr. Fogarasi’s report is entitled “Independent Review of Contractor Performance and  
Claimsfor contract CP-15 PCS Picadilly compactor project. Mr. Fogarasi’s report reviews the  
claims as set out in Comstock’s second Amended Statement of Claim, which was further amended  
after Mr. Fogarasi completed his report in April 2018. Mr. Fogarasi did not review Mr. Dean’s  
report before preparing his. Counsel did not provide it to him.  
[234] Mr. Fogarasi also reviewed the contract, and other documentation including Comstock’s  
claims submission summary, the RFI logs, minutes of weekly meetings, the daily reports, change  
orders, various correspondence, Comstock’s payment applications and the CP-15 Purchase Order  
revisions.  
[235] Mr. Fogarasi did not undertake a delay analysis. In his opinion Comstock’s scheduling  
practices, change management, organization and supervision of the work were deficient and  
prevented Comstock from being able to address its productivity issues and also prevented AMEC  
from being able to respond effectively to these issues.  
[236] Mr. Fogarasi is of the view that Comstock’s failure to follow the contractual requirements  
to obtain extensions of time and to support its claims for additional compensation preclude it from  
being entitled to any damages.  
[237] In the event that Comstock established entitlement to certain claims, Mr. Fogarasi prepared  
hypothetical calculations.  
Criticisms of the expert reports  
[238] Both sides say the other side’s expert was not credible, and submit that the Court should give  
little weight to the opposing expert’s opinion.  
[239] PCS and AMEC’s principal criticism of Mr. Dean’s opinion and report is that he started with  
the premise that Comstock had suffered losses at the hands of the defendants and focused on  
53  
quantifying those losses. They argue that he was not an independent witness but rather an advocate  
for the plaintiff.  
[240] Mr. Dean’s analysis relied on a number of assumptions regarding causes of delay that were  
not borne out by the evidence at trial. He did not attempt to quantify delay associated with any of  
the individual claimed reasons for delay, including early delay that he says Comstock was initially  
responsible for. As well, he relied mainly on Comstock’s own estimates in quantifying the “direct  
cost claims.” This impacts the weight the Court was able to give to his conclusions on liability  
and damages.  
[241] With respect to Mr. Fogarasi’s opinion and report, the plaintiffs criticize it for focusing on a  
claim that was no longer relevant at trial. However, Comstock did not amend its pleading until the  
eve of trial. Mr. Fogarasi’s analysis of many of the claims contained in the second amended  
statement of claim are relevant to the claim that was presented at trial.  
[242] The plaintiffs also submit that Mr. Fogarasi’s credibility is questionable because he made  
statements in his report that purported to give an opinion on schedules he had not reviewed at the  
time he wrote the report. Although he testified he had reviewed all the schedules, I have some  
concerns with Mr. Fogarasi’s evidence as it relates to the schedules.  
[243] Ultimately, having heard all the evidence and reviewed the reports in detail, I do not  
completely accept or reject either expert’s opinions. However where I prefer the evidence of one  
expert over another, or accept or reject part of an expert’s opinion I will indicate this and my  
reasons for doing so.  
ISSUES  
A.  
Liability  
Is there liability on the part of PCS/AMEC for delay resulting from:  
I.  
1. Late “notice to proceed”?  
2. Drawing revisions/design changes?  
a) Claim of breach of contract  
b) Claims in negligence  
54  
3. Failure to provide copies of IFC documents by September 14, 2009?  
4. Cladding/heat issues?  
5. Crane issues?  
6. Late access to areas of the compaction plant?  
7. Interferences from other contractors?  
a) Claim of breach of contract  
b) Claims in negligence  
8. Delays in change order processing?  
9. Late/defective equipment, materials, instruments?  
II.  
Did Comstock cause/contribute to its own delay through:  
1. Issues with productivity?  
2. Organization issues?  
III.  
IV.  
V.  
Were there other causes of early delay?  
Was the contract breached by a failure to provide an extension of time?  
Was Comstock dismissed without cause?  
1.  
Did PCS have grounds to terminate for default of the contract?  
a. Did Comstock fail to prosecute the work diligently?  
b. Did Comstock fail to provide sufficient skilled and qualified labour and  
supervision?  
c. Did Comstock fail to provide sufficient Plant or Materials or services?  
d. Did Comstock fail to complete the work by the completion dates in the construction  
schedule?  
e. Did Comstock fail to perform the work in an inefficient manner?  
f. Did Comstock fail to comply with the instructions of the engineer with respect to  
the contractually required format and details of the construction schedule [GC  
19.3.1] and the contents of the notices of claims [GC 47.6.1]?  
2.  
3.  
Did PCS give Comstock clear Notice of Default?  
Was the contract fundamentally breached by Comstock?  
55  
VI.  
Other breaches claimed by Comstock  
1. Was there a breach of the duty of good faith that applies to all contracts?  
2. Did AMEC induce PCS to breach the contract?  
3. Are AMEC and/or PCS liable to Comstock for unlawful interference with its economic  
interests?  
B.  
Damages  
1. What damages is Comstock entitled to seek recovery of according to the contract?  
a. Disputed MechanicsLien holdback  
b. Unpaid amounts for work in June and July 2010  
c. Delay-related Claims  
i)Loss of productivity claim  
ii)Extended overhead claim  
d. Direct Cost Claims  
i) Claim for additional Material Handling and Piping Costs  
ii) Claim for ccosts for additional impacts on Change Order already  
provided  
iii) Claim for aadditional work performed by Comstock (not in original  
scope)  
e. Claim for added burdens on direct cost claims  
f. Claim for unpaid change order material  
g. Termination costs  
h. Profit of 5%  
i. HST  
2.  
3.  
PCS’ claim of set off  
a. Does PCS have a right of set off?  
Is Comstock entitled to punitive and/or aggravated and exemplary damages?  
C.  
Claims for Prejudgment Interest & Costs  
56  
LAW AND ANALYSIS  
A. Liability  
I.  
Is there liability on the part of PCS/AMEC for Comstock’s delay?  
[244] The contract contains detailed provisions regarding requirements for notice and requests for  
extensions of time arising from delay. These are set out at Appendix A to this Decision.  
[245] The parties disagree on the interpretation of provisions of the contract, as they relate to  
Comstock’s claims that PCS/AMEC are responsible for breaches that impacted its plan of work  
and caused its delay. The Court is guided by principles of interpretation as summarized by the  
Court of Appeal in J.A. MacFarlane Engineering Company Limited et al. v. Darcon Holdings Ltd.  
et al., 2016 NBCA 45 (CanLII):  
[23]  
Several principles of contractual interpretation apply in this case.  
Ambiguities in a contract should be resolved against the drafter: Algo Enterprises  
Ltd. v. Repap New Brunswick Inc., 2016 NBCA 35, [2016] N.B.J. No. 149 (QL),  
para. 42 per French J.A., writing for the Court. Rules of construction are applied to  
resolve ambiguity; they do not operate to create ambiguity where there is none in  
the first place. But the overall objective of contractual interpretation is to identify  
the true intent of the parties as expressed in the contract: Robichaud et al. v.  
Pharmacie Acadienne de Beresford Ltée., 2008 NBCA 12, 328 N.B.R. (2d) 205,  
per Drapeau C.J.N.B. paras. 18-19. In Sattva Capital Corp. v. Creston Moly Corp.,  
at paras. 57-58, the Supreme Court reiterated the interpretation of a written  
contractual provision must always be grounded in the text and read in light of the  
entire contract.  
[246] In Sattva, cited above, the Supreme Court of Canada stated the following:  
I now turn to the role of the surrounding circumstances in contractual interpretation  
and the nature of the evidence that can be considered. […]  
While the surrounding circumstances will be considered in interpreting the terms  
of a contract, they must never be allowed to overwhelm the words of that agreement  
(Hayes Forest Services, at para. 14; and Hall, at p. 30). 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  
57  
light of the entire contract (Hall, at pp. 15 and 30-32). While the surrounding  
circumstances are relied upon in the interpretive 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), 1997  
CanLII 4085 (BC CA), 101 B.C.A.C. 62).  
The nature of the evidence that can be relied upon under the rubric of “surrounding  
circumstances” will necessarily vary from case to case. It does, however, have its  
limits. It should consist only of objective evidence of the background facts at the  
time of the execution of the contract (King, at paras. 66 and 70), that is, knowledge  
that was or reasonably ought to have been within the knowledge of both parties at  
or before the date of contracting. Subject to these requirements and the parol  
evidence rule discussed below, this includes, in the words of Lord Hoffmann,  
“absolutely anything which would have affected the way in which the language of  
the document would have been understood by a reasonable man” (Investors  
Compensation Scheme, at p. 114). Whether something was or reasonably ought to  
have been within the common knowledge of the parties at the time of execution of  
the contract is a question of fact.  
[247] With respect to liability for delay, as stated in Twin Cities Mechanical & Electrical Inc. v.  
Progress Homes Inc., 2005 NLTD 134 (CanLII) at paragraph 52:  
The concept of delay, and its implications, which are pivotal to both liability  
(arising from breach of contract) and damages is set out at p. 5-14 and 5-15 by  
Goldsmith on Canadian Building Contracts:  
An owner is entitled to have his work completed within the time  
specified in the contract, or within a reasonable time if no specific  
time is provided for. A contractor who delays completion beyond  
such period is guilty of a breach of contract, and may be liable for  
substantial damages. A sufficient delay will enable the owner to  
terminate the contract.  
If a contractor anticipates that he will be unable to complete within  
the time specified, he may apply to the owner for an extension of  
time, and if such an extension is granted, completion within the  
period of extension is not a breach of contract. If the delay is due to  
the fault of the contractor, an owner is under no obligation to grant  
any extension of time for completion; and if such delay amounts to  
repudiation of the contract, the owner may terminate the contract for  
inexcusable nonperformance and have the work finished by others.  
Furthermore, a contractor who incurs additional costs as a result of  
his own delay is not entitled to recover such costs from the owner.  
If, however, the delay has been caused by the owner, or by someone  
58  
for whom he is responsible, he is not entitled to insist on completion  
on the original completion date, and in substance cannot refuse to  
extend the time for completion. Furthermore, he may be liable in  
damages to the contractor for the loss suffered as the result of the  
delay, unless the contract expressly excludes the right to such  
damages. But even when the delay has been caused by the owner,  
the contractor must still complete within a reasonable time, or within  
the period of extension granted by the owner.  
1) Is there liability for late “notice to proceed”?  
[248] Comstock says it planned to begin mobilizing August 17, 2009 but did not receive what it  
calls a “Notice to Proceed” from AMEC until August 31, 2009. PCS and AMEC deny there was  
such a thing as a Notice to Proceed or that Comstock was delayed because it was waiting for one.  
[249] Comstock did indicate in its execution plan it intended to begin mobilizing August 17, 2010.