Court of Queens Bench of Alberta  
Citation: Maxim Excavating Ltd v Peace Regional Waste Management Company, 2022  
ABQB 351  
Date: 20220517  
Docket: 1203 15420  
Registry: Edmonton  
Maxim Excavating Ltd.  
- and -  
Peace Regional Waste Management Company and Northern Sunrise County  
Reasons for Judgment  
of the  
Honourable Madam Justice M.E. Burns  
[1] In April 2011, Maxim Excavating Ltd (“Maxim”) won a tender relating to the  
construction of three industrial waste cells for Peace Regional Waste Management Company  
(“Peace Regional”). The contract time was set for the period from May 15 to August 31, 2011.  
Maxim completed Cells 2 and 3 by November 10, 2011, and Cell 6 in the spring of 2012 and the  
three cells were put into use. Omni-McCann Consultants Ltd. (“OMC”) acted as the engineer on  
the project with its employee Royce Sather (“Mr. Sather”) being the engineer responsible for the  
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The cause of the delay in completion, who was responsible for the delay and what  
damages were incurred, if any, is at the heart of this action. Maxim sues for outstanding  
payments for the work completed plus excess costs arising from the delay. Peace Regional  
disputes the amounts claimed asserting that Maxim breached the contract and that it is entitled to  
set off charges arising from the delay and the breach of contract.  
The Contract  
The natural starting point for a dispute over payment of a construction contract and  
construction delay is the contract itself (“the Contract”). In this case the Contract includes  
several documents including:  
a. The tender documents,  
b. The Agreement,  
c. The General Conditions of the Contract (“GCs”),  
d. The Supplementary General Conditions of the Contract (“SGCs”),  
e. The plans and specifications with Addendums, and  
f. The bonds and certificates of insurance.  
As Peace Regional notes, the interpretation of contracts has evolved towards a practical,  
common-sense approach where the main objective is to determine the intention of the parties and  
the scope of their understanding: Sattva Capital Corp v Creston Moly Corp, 2014 SCC 53 at  
para 47 (Sattva). One must look at the actual language used in the written contract and employ  
the “cardinal presumption” that the parties fully meant what they said: Weyerhaeuser Company  
Limited v Ontario (Attorney General), 2017 ONCA 1007 at para 65.  
The written contract must be read “as a whole,” where the words are given their ordinary  
and grammatical meaning, consistent with the surrounding circumstances known to the parties at  
the time of formation of the contract: Sattva at para 47. The surrounding circumstances, or  
“factual matrix,” typically refer to facts concerning the genesis of the contract, its purpose, and  
the commercial context in which the contract was made: IFP Technologies Inc v EnCana  
Midstream and Marketing, 2017 ABCA 157 at para 83 (IFP). However, the surrounding  
circumstances cannot be allowed to overwhelm or displace the words of the agreement. Finally,  
the contract’s text must be read in a fashion that accords with sound commercial principles and  
good business sense. In the absence of evidence of a bad bargain, courts should not interpret a  
contract in a way that yields an unrealistic or commercially absurd result: IFP at para 88.  
I am mindful of the words of our Court of Appeal in IFP at para 89:  
In the end, contractual interpretation is not an exercise in second guessing what  
could have been included in a contract while discounting or dismissing relevant  
terms of a contract and uncontradicted contextual information. It is instead an  
exercise in determining what the parties objectively intended having regard to the  
entire written text, relevant contextual background and commercial context.  
Upon reviewing the Contract, it is not easy to overlook the many confusing and  
complicated issues that arise. The evidence is that Mr. Sather, as the engineer on the project,  
“cobbled” the Contract together. I use that term intentionally as it appears that each component  
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for the Contract is based on a precedent of one sort or another and cobbled together for the  
purposes of this particular project. This is problematic and becomes more so when the  
numbering in the Contract was clearly not proofread and there are several instances where cross  
references to one subsection or another are clearly wrong. Mr. Sather blames this issue on his  
administrative staff.  
However, generally I find that in this case the commercial purpose of the Contract is not  
difficult to discern - Peace Regional needed three waste cells built to standards as soon as  
practicable. I note that the terms of the Contract also contemplated that there would be  
unforeseen events that might require flexibility and, hopefully, agreement (see for example GC3,  
GC8, GC20). I agree with Maxim that these provisions contemplated times when the scope of  
work would change and that it is not commercially sound that there would be an expectation that  
the work would be done without pay or without adjustment to time for the Contract.  
With this consideration of the commercial purpose, I will consider the other issues before  
me and address any other contract interpretation issues in the context of that analysis.  
Assessment of the evidence  
[10] At trial, Maxim called two witnesses: Maxim’s owner, James Kratchkowski (“Mr.  
Kratchkowski”); and Aron Reeves, Maxim’s Project Manager on this project (“Mr.  
Reeves”). The Defendants called three witnesses: Mr. Sather, an OMC employee and the  
engineering lead on the project; Peter Thoma (“Mr. Thoma”), an officer of Peace Regional who  
took over when the CEO of Peace Regional passed away in the spring of 2012; and Art Sawatzy  
(“Mr. Sawatzy”), the General Manager of the Peace Regional Waste Management Corporation  
for eight years and who testified to a waste management contract with Plains Midstream.  
[11] In addition to oral evidence, the evidence at trial included a significant quantity of  
business and other records entered as exhibits, many by agreement.  
[12] I found each of the witnesses who testified before me on behalf of Maxim to be credible  
and mostly reliable, but the passage of time has definitely impacted some memories. With  
respect to Peace Regional’s witnesses, I find Mr. Thoma and Mr. Sawatzy to be credible and  
mostly reliable with the same concerns I had above relating to the passage of time.  
[13] However, I have quite a bit of difficulty with Mr. Sather’s evidence. He was qualified as  
an expert at trial as a witness with expertise involved in the events underlying the litigation but  
who is not a litigant: see Kon Constructions Ltd v Terranova Developments Ltd, 2015 ABCA  
249 at para 35. He was qualified based on his engineering qualifications as set out in his licence.  
[14] During his testimony, Mr. Sather often indicated that he did not remember but then  
proceeded to say what he thought was being looked for. He would indicate he had no specific  
recollection but then add something like, “One of two things would have happened”. He  
frequently used what I would call “wiggle-room” language such as “I take those to mean...”, “I  
presume they would be...”, and “I assume...” At times it appeared that Mr. Sather was guessing.  
In fact, at one point in cross examination, Mr. Sather was challenged that he was speculating, and  
he agreed. Often, the smallest of concessions had to be pulled out of him like the relative  
amount of rain between the summer and fall. He would concede nothing. I found that Mr. Sather  
was deeply entrenched in his view of events and committed to delivering to the Court whatever  
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information best supported his particular interest. I have difficulty finding Mr. Sather credible or  
[15] Mr. Sather was the engineer responsible for contract administration and the project. He  
assumed that duty through the Contract and through his professional engineering ethical  
standards. He had an obligation to administer the Contract in a way that was fair and reasonable  
to both sides of the Contract.  
[16] There is no doubt that in a construction contract where an owner has expressly given  
power or discretion over a matter to its engineer there is an implied duty on that engineer to act  
in good faith when exercising that power or discretion: Golden Hill Ventures Ltd v Kemess  
Mines Inc, 2002 BCSC 1460 at paras 662- 665 (Golden Hill). This duty of good faith is  
fundamental to every construction contract including this one.  
[17] The General Conditions under the Contract contain many examples of the obligations and  
roles of the engineer. In several of the Contract provisions, the engineer (OMC) is obliged to  
consider positions and attempt to come to a mutual agreement. This is often in the context of  
unforeseen events that might entail delay, changed work or other disagreements. For example,  
GC7 “Engineer’s Decisions” gives OMC considerable power and authority. It is qualified by  
requiring OMC to use the power under the Contract “to enforce its faithful performance by both  
parties hereto” (GC7, 1.0).  
[18] The evidence establishes that Mr. Sather’s loyalties lay squarely with those of Peace  
Regional in the administration of the Contract. He seemed incapable of considering Maxim’s  
side on any issue that arose. As identified by Maxim, a good example is where OMC approved  
payment, but Peace Regional did not want to pay so as a result Maxim was not paid. Once OMC  
determined that payment was appropriate OMC should have done whatever it could to have  
payment made. It was OMC’s responsibility “to enforce...faithful performance by both parties”.  
[19] The failure of OMC, through Mr. Sather, to act for the benefit of the project as a whole  
made the entire construction process much more difficult as many of the Contract provisions  
depend on the project engineer acting in good faith when determining what is reasonable in the  
[20] Given the difficulty inherent in reliability through the passage of time and the serious  
question of credibility I have with respect to Mr. Sather’s evidence, I rely heavily in this decision  
on the documents provided. Some of the facts set out below are taken from the parties’ closing  
submissions. Where the parties disagreed, the facts herein should be considered my findings  
based on full consideration of all evidence at trial.  
Breaches of contract and sources of delay  
[21] Construction delay litigation is, naturally, heavily dependent on the Contract at issue.  
Courts have considered actions on behalf of a contractor for delay recognizing that a delay can  
have cost consequences including:  
(i) delay or extended duration costs,  
(ii) impact or efficiency costs,  
(iii) acceleration costs, and  
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(iv) lost opportunity to earn profit.  
[22] Maxim seeks damages for unpaid contract work and for work that arises outside the  
Contract that was completed by Maxim at the direction of OMC. It asserts that the delays in the  
project were as a result of circumstances beyond its control or excusable delay.  
[23] Peace Regional is claiming set off damages for non-excusable delay.  
[24] The General Conditions of the Contract specifically addresses delay in  
1.00 If the Contractor is delayed in the performance of the Work by an  
act or neglect of the Owner, Engineer, or any Other Contractor or any  
employee of any of them, then the Contract Time shall be extended for  
such reasonable time as the Engineer may decide in consultation with the  
Contractor, and the Contractor shall be reimbursed for any costs incurred  
by him as a result of such delay.  
3.00 If the Contractor is delayed in the performance of the Work by labour  
disputes, strikes, lock-outs (including lock-outs decreed or recommended  
for its members by a recognized Contractors’ Association of which the  
Contractor is a member), fire, unusual delay by common carriers or  
unavoidable casualties, or without limit to any of the foregoing by any  
cause of any kind whatsoever beyond the Contractor’s control, then the  
Contract Time shall be extended for such reasonable time as may be  
mutually decided by the Engineer and the Contractor, but in no case shall  
the extension of time be less than the time lost as the result of the event  
causing the delay, unless such shorter extension of time be agreed to by  
the Contractor.  
5.00 No extension shall be made for delay unless written notice of the  
claim is given to the Engineer within fourteen (14) days of its  
commencement providing that in the case of a continuing cause of delay  
only one claim shall be necessary.  
(emphasis added)  
[25] The Supplementary General Conditions also contemplate late completion:  
Should the Contractor fail to meet the completion date given, the Owner shall be  
entitled to make deductions from payments due the Contractor as compensation  
for costs incurred by the Owner beyond the completion date. Such costs shall  
include but are not necessarily limited to, administration, bookkeeping and  
engineering costs. The completion date shall be as noted in the Agreement unless  
the Owner has agreed, in writing, to an extension of time for completion.  
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(emphasis added)  
[26] The evidence established that there was delay. Whether there was late completion  
depends on whether there are delays that are to be compensated by extensions to the Contract  
Time completion date.  
[27] Maxim asserts several sources of delay including:  
a. Berm work,  
b. Weather,  
c. Unsuitable materials,  
d. Changes to the cycle strategy, and  
e. Delays in testing gravel.  
[28] Peace Regional argues that Maxim must establish the following for each of the alleged  
causes of delay:  
a. The occurrence of an isolated and defined event which gives rise to a  
b. That the Contract treats the event as compensable entitling Maxim to both  
extra Contract Time and money;  
c. That Maxim complied with the notice requirements of the Contract;  
d. That the delay event is discrete and does not overlap with other delaying  
e. That Peace Regional is solely responsible for the delaying event; and  
f. That Maxim incurred costs or lost time or both as a result of the delaying  
Notice under the Contract  
[29] Before looking at the delays asserted, some consideration of the notice provisions is  
[30] Peace Regional argues that failure to give proper notice when required to do so disentitles  
Maxim to any relief. As noted above, the Contract deals with delay and the notice required in  
GC8, Article 5. The condition requires 14 days written notice of the claim to be provided to the  
engineer. The purpose of notice is to give the owner an opportunity to consider its position and  
take corrective measures and it is prejudiced by not being able to do so if notice is not provided.  
Further, written notice allows the parties to deal with problems as they arise rather than arguing  
about it afterwards. Specifically, Peace Regional argues that the case law clearly states that  
discussing a potential delaying event during meetings is insufficient and that meeting minutes or  
notes do not establish notice of a delay. Peace Regional argues that notice is a precondition to  
any claim for cost reimbursements or an extension of Contract Time. Failure to give such notice  
is fatal to any request for an extension of Contract Time or a claim for cost reimbursement.  
[31] Maxim argues that it complied with all contractual notice requirements because those  
notice requirements do not arise in a vacuum. Notice is only required when Maxim became  
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aware that there would be an issue requiring resolution relating to a delaying event. Maxim  
argues that this applies to every source of delay that has been raised.  
[32] While I will deal further with the issue of notice below on the sources of delay raised,  
generally, I find that Maxim's argument that they can only give notice once they were aware that  
there was a problem has merit.  
[33] In the circumstances of this case, I am concerned that Peace Regional (more specifically  
its engineer) routinely failed to comply with the Contract provisions and comes to this Court to  
insist the terms of the Contract be strictly applied to Maxim. It cannot have been the intention of  
the parties that Peace Regional can simply not comply with their own requirements under the  
Contract and insist on strict compliance by Maxim. For example, OMC repeatedly failed to  
deliver the notices of the site occupancy reports to the proper location or in a timely manner. The  
evidence establishes that site occupancy reports were not provided weekly but were provided  
whenever it appears Mr. Sather got around to them. Peace Regional cannot now suggest that  
Maxim must comply with notice requirements which are directly related to the timelines of the  
receipt of those very reports.  
[34] It appears by the actions of OMC that Maxim should also benefit from the relaxed  
compliance with the provisions of a complex contract that was drafted by OMC. I agree with the  
court in Golden Hill, at para 741, where it provides that:  
Canadian courts commonly reject noticedefences raised in construction cases  
based on a failure of the claiming party to comply with the technical requirements  
of the formal procedures in the contract recognizing that, on most construction  
projects the parties adopt less formal procedures more consistent with the realities  
of the construction project...  
[35] I find that this was the case here. The less formal procedures adopted by OMC and Mr.  
Sather are more consistent with the realities of the construction project, but these informalities  
must benefit all parties to the Contract.  
Sources of delay  
The Berms  
[36] The first delay asserted relates to berms. Mr. Reeves testified that at the beginning of the  
project it was apparent that there were berms of unsuitable material obstructing the project and  
that Maxim was instructed to remove them. Maxim argues that this was work outside the  
Contract and that working on the berms delayed the Contract. The work was paid as “forced  
account work” but Maxim argues that Contract Time should also be adjusted. Only one day was  
given in Contract Time but it took almost a week to do the work.  
[37] Peace Regional argues that the removal of the berms was not an extra to the Contract. Mr.  
Sather testified at trial that the berm removal was work included in Schedule 1(a) of the Contract  
as one can see the berms on the drawings. Peace Regional asserts that if the work cannot be  
compensated for outside the Contract, it cannot be a delaying event.  
[38] I find that Peace Regional’s position makes no commercial sense. Mr. Sather’s evidence  
at trial, when considered in context with what he actually did, is one example where Mr. Sather  
seemed determined to put his view of the best information possible before this Court to support  
the position taken in litigation. The documentary evidence establishes that Mr. Sather agreed to  
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pay for the berm removal as “forced account” work rather than on the unit rates set out in the  
Contract. The documents show that Mr. Sather directed his on-site supervisor to accept the berm  
removal as forced account work and it was noted in the relevant daily summaries that it was  
forced account work. If the berm removal was a line item it should have been identified as such.  
I find that it was paid as forced account work because it was outside the scope of the Contract.  
Further, Mr. Reeves testified that they were asked to do this work and the fact that it is at odds  
with their construction schedule and cycle strategy supports that conclusion.  
[39] Peace Regional argues that Maxim never raised a complaint due to this forced account  
work and it did not provide any written notice of delay or make a change request for more  
Contract Time as is related to clearing away the berms. Mr. Reeves testified that at the beginning  
of the project this added five additional days to the project that were being paid as forced account  
work. He further testified that it was not until he had the site occupancy reports seven weeks  
later, that he saw that they were not given day for day credit for the work, and they were charged  
site occupancy days. He testified that had he known they would not get day for day credit, they  
would not have done the forced work.  
[40] Having reviewed Mr. Heroux’s daily reports and Mr. Richard’s Construction Summary  
relating to the first week of work it is apparent that some other work was completed by Maxim  
during this week - i.e., it was not all forced account work. But I note that Mr. Reeves testified  
that the scraper and operator would have been used elsewhere during this period but for the  
forced account work and I accept this evidence. However, I am not prepared to find five days  
delay. I find three days delay that should be compensated with a Contract Time extension. With  
respect to site occupancy, I note that the work done during this week that was not forced account  
work means that Site Occupation Days may be counted in accordance with its definition as  
discussed below, except the first day which has been already acknowledged not to be a Site  
Occupation Day in Mr. Sather’s calculations.  
The Weather  
[41] There is no doubt that there was a significant amount of rain at the worksite during  
construction. The disagreement arises over which days the rain prevented Maxim from working.  
Under the Contract, given that no one can control the weather, any delay caused by rain is non-  
compensable. The consequence of rain delay, per se, is with respect to Site Occupation Days and  
an extension of Contract Time.  
[42] But in addition, Maxim clarifies that the damages or compensation it seeks relating to the  
weather relate to the requirement by Peace Regional to perform work related to the weather but  
outside the scope of the Contract such as de-mudding, pumping and being on standby.  
[43] Again, Peace Regional denies that Maxim provided proper notice of the rain delays.  
Specifically, they argue that the notices provided do not meet the requirements set under GC8 as  
they failed to identify any discrete delaying events, they failed to ask for compensation or an  
extension in Contract Time, they failed to advise that a claim would be brought under the  
Contract, and any notices given were not within 14 days of the occurrence of the delaying event.  
[44] Maxim points out the rain delay is obvious. The weather was described as rain monsoons  
by the Chief Administrative Officer of Peace Regional at the time. A fax was sent by Mr. Reeves  
to Mr. Sather on July 7, 2011 - when he finally got the site occupancy reports - and he raises the  
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issue of site occupancy counting because of the rain and the work required of them. The fax  
notes that there were also discussions between Mr. Reeves and Mr. Sather.  
[45] Peace Regional argues that the faxes on July 6th and July 7th are not sufficient. They  
argue that Mr. Sather testified he had no recollection of ever receiving these faxes and does not  
recall discussing the issues described therein. Peace Regional argues that although the impact of  
the weather was discussed at various points throughout the project no written notice of delay was  
ever delivered. As noted above, I do not believe Mr. Sather. His memory is convenient. I find the  
faxes were sent and received as indicated and that they set out the discussions held. I find that  
this notice satisfies the Contract provisions given the partiesrespective conduct (i.e., the delay  
in sending site occupation reports that would alert Maxim to a problem) and the partiesapparent  
agreement to flexibility in compliance with strict contractual provisions.  
[46] I also note that Mr. Sather considered the rain delay and in fact extended the Contract  
Time. He originally calculated the rain adjusted completion date to be October 18th, 2011. On  
October 14th, 2011, OMC informed Maxim that it had revised its calculation of the completion  
date to October 20th, 2011. This shows that the notice provided to Peace Regional was sufficient  
for their Engineer to consider the delay and set out a position. The policy objectives of notice  
have been met.  
[47] Peace Regional notes that Maxim did not challenge or contest this new completion date  
or provide its own calculation with respect to extending the Contract Time for the rain suffered  
to date. Thus, Peace Regional argues that there was a mutual agreement on the October 18th,  
2011 date, as contemplated under GC8.  
[48] I find that at no time was there any mutualagreement reached regarding an extension  
of Contract Time as prescribed under GC8 Delays, Article 3.00. What OMC did through Mr.  
Sather is ask for a schedule and he said, if it's only the weather that is the issue, I think it's  
reasonable to assume that weather delays will just push the schedule back from whenever you do  
get started”.  
[49] Maxim argues that it did not obtain what it was entitled to under the Contract for an  
extension of Contract Time because beyond a few limited exceptions, OMC did not allocate any  
drying time to Maxim to halt the proverbial clocks of Contract Time and site occupancy. Given  
the monsoon-like rains and the evidence of Mr. Reeves with respect to the muddy conditions  
following the rain, I find that periods of drying were necessary and compensation by Contract  
Time extension is reasonable. In fact, the Contract contemplates such days in its definition of  
Site Occupation Days where it provides that unproductive days (after a rain while de-mudding or  
pumping) are not Site Occupation Days.  
[50] With respect to the extension of Contract Time as a result of weather, I have reviewed all  
the site reports, and the schedules provided by Mr. Reeves and Mr. Sather in the calculation of  
days lost to weather, in their respective opinions. I have calculated days lost to weather for the  
period up to the conclusion of Cells 2 and 3 to total 59 days plus 12 days for “drying” – more  
properly to reflect the fact that the very wet and muddy conditions delayed construction. GC8  
Article 3.00 provides that Contract Time must be extended by no less than these 71 days.  
[51] As discussed in further detail below, I find that the time between November 10, 2011,  
and May 23, 2012, is not to be counted as Contract Time as the parties agreed to delay the  
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completion of Cell 6 to the Spring of 2012. A winter break is not Contract Time or Site  
Occupation Days.  
[52] With respect to the period between May 23, 2012, and the completion of Cell 6 on June  
21, 2012, I find that there were 12 days of delay from rain and pumping/de-mudding.  
[53] With respect to compensation for work done outside the Contract due to dealing with the  
consequences of the rain, Maxim claims costs incurred including the cost of fuel, equipment,  
labour, room and board, etc. Maxim argues that the Contract made no provision for pumping  
water and Maxim was under no obligation to perform that work free of charge and these costs  
were incurred due to express directions given to Maxim to expedite the work.  
[54] Peace Regional indicates that the only promise to reimburse Maxim’s costs due to rain  
was for the mobilization of an additional 815 Packer which it agreed to pay for and was solely  
related to accelerating the completion of the work. There does not appear to be any dispute about  
the 815 Packer. The question remains as to whether Maxim can claim expenses relating to non-  
contract work that arose due to rain and whether notice provisions preclude that compensation.  
[55] The fact of the August 5, 2011 meeting shows the importance of the consequences of the  
rain delay to the parties. Peace Regional needed to get its cells completed as soon as possible.  
Maxim was limited in their contract work because of the muddy conditions and were being  
pressured to do whatever they could to de-mud and continue construction. The meeting was  
precipitated because of Mr. Kratchkowski’s communications with Mr. Sather that Maxim  
required compensation. Mr. Sather’s response that further compensation was unlikelywas met  
with Mr. Kratchkowski suggesting that Maxim stop the non-contract work, including de-  
mudding, to allow the sun to dry the site. This would surely have extended the delay due to rain  
even more. The meeting agenda, drafted by Mr. Sather, recognized that Maxim’s concerns  
needed to be addressed.  
[56] Mr. Sather’s notes from the August 5, 2011 meeting establish that compensation was  
discussed and Peace Regional agreed to consider compensating Maxim for the extra cost  
incurred due to weather related delays. The parties ended the meeting with Maxim tasked with  
providing information or a proposal to Peace Regional for consideration. No timeframes were  
noted and Maxim’s position is that those extra costs were unascertainable until the job was done.  
[57] Mr. Kratchkowski and Mr. Reeves both testified that Maxim was led to believe that those  
costs would be entertained and addressed at the conclusion of the work such that there was no  
problem or reason for them to give notice of a claim. Mr. Sather’s notes support those  
impressions. I find that the work was extra to the Contract, and is not compensation for delay per  
se. I do not find that Peace Regional agreed to compensate for the work but I do find that they  
cannot expect a contractor to do work at their insistence and not pay for it.  
[58] I find that in addition to recalculation of Site Occupation Days and contract extensions as  
contemplated in the Contract, Maxim is entitled to be compensated for the work they performed  
that was outside the scope of the Contract. As discussed above, an informal approach to the  
notice provisions applies and the evidence establishes that notice was in fact provided. The  
damages and the consequences to Contract Time are discussed below.  
(iii) Unsuitable Materials  
[59] Maxim argues that another source of delay and extra work on the Contract arose from  
excessive contaminated material requiring specialized sorting and handling. When excavating  
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Maxim was looking for clay that would be suitable for the clay liner. If the material was not  
suitable it would be moved to an unsuitable” or “junk clay” stockpile in a designated site. In this  
case much of the unsuitable material was also contaminated” meaning that the material had to  
be disposed of in other areas. The unsuitable material encountered on site was mostly old  
garbage from a previously constructed landfill and lead to a bucket by bucket, time consuming  
exercise to separate usable clay to ensure that sufficient suitable material would be available to  
build the clay liners. Maxim argues that the presence of this material ought to have been  
disclosed to Maxim at the time of bidding.  
[60] Peace Regional argues that the sorting and removal of unsuitable materials was always  
contemplated as part of the Contract to be performed by Maxim. It argues that the work was not  
an extra to the Contract and therefore it cannot give rise to a delay that would justify a change in  
the Contract Time nor a change to the Contract price. Further, even if unsuitable materials were  
an extra or a delaying event, Maxim did not request an extension or give notice of a delay within  
the time required by the Contract.  
[61] The tender form provides a unit price for Earthwork. For Cells 2 and 3, Earthwork  
includes excavate and stockpile (estimated 20,200 cu m). Material suitable for creating the clay  
liner was to be stockpiled. Earthwork also includes excavate and dispose in phase 4B (estimated  
20,100 cu m) which relates to material found that would be unsuitable for a clay liner. With  
respect to Cell 6, Earthwork includes excavate from cell and stockpile (estimated 600 cu m).  
[62] Maxim asserts that the issue here is that there was much more unsuitable material than  
anticipated. This meant that there was not enough suitable material for the clay liner, meaning  
Maxim had to sort through the excavated material to remove, bucket by bucket, the unsuitable  
from suitable clay in order to stockpile enough clay for the liners. Maxim argues there is no line  
item or unit price for the activity of separating suitable and unsuitable material.  
[63] The evidence confirms that there was much more unsuitable and contaminated material  
than anticipated. Mr. Heroux’s and Mr. Richard’s notes both document that “significant  
amountsof garbage were found resulting in the need to find additional areas in which to  
stockpile (separately) both unsuitable and contaminated material. The effect of this was that there  
was quite a bit less material for stockpiling to build the clay liners than expected.  
[64] With respect to notice I find that it was sufficient given the relaxed position of the parties  
relating to the time requirements of the Contract. The policy reasons for notice provisions were  
met as Peace Regional and OMC were well aware of the issue of unsuitable material and were  
actively dealing with the issue along with Maxim. Maxim’s position on this is not a surprise to  
Peace Regional.  
[65] Mr. Heroux and Mr. Richard started documenting this issue as early as June 1, 2011. Mr.  
Heroux’s notes confirm that Mr. Richard raised the issue that not enough suitable material was  
being stockpiled from the industrial Cells. As early as July 6, 2011, Mr. Reeves sent a fax to Mr.  
Sather indicating that Maxim did not agree that the time spent sorting and hauling the extra  
unusable material should be at Maxim's costs according to the Contract. It is apparent from the  
fax that the issue had been previously raised with the site superintendent, who had discussed the  
matter with Mr. Sather. Although not drafted as one might expect from legal counsel, the intent  
is clear. Maxim did not agree and the volumes encountered were causing delays in a project  
already delayed by weather. Mr. Reeves testified that he made a follow up phone call after the  
fax was sent.  
Page: 12  
[66] While Mr. Sather has no recollection of the fax or the discussions with Mr. Reeves, Bob  
Miles knew about the contaminated material in Cell 3 by at least July 14, 2011, because he  
discussed the need to plan around it with Mr. Sather. By July 25, 2011, it was apparent that the  
plan involved Maxim doing the work. The question is whether the work was contract work or  
extra-contract work.  
[67] Peace Regional argues that the work was not an extra to the Contract as the unit rates  
were full compensation for the work and that sorting materials and double handling was included  
in the unit rate. Peace Regional specifically points to the General Requirements of the Contract.  
If the work was within scope of the Contract and paid by the unit prices, it cannot give rise to a  
delay that would justify a change in either the Contract Time or the price.  
[68] Maxim argues that the work of sorting materials load by load was not included in the  
scope of the Contract. This is evidenced by the sheer volume of the material that had to be  
handled and sufficient liner material was only attainable through the load-by-load sorting.  
Maxim argues that the general accuracy of the composition of the soils and the estimated  
quantities represented under the Contract informed the parties’ commercial expectations in two  
distinct ways:  
a. First, the soil composition and quantities were tied to the passage of time,  
in the sense of enabling an assessment of how long the job would take. To  
the extent that more work takes more time, no contractor could reasonably  
expect to encounter much variance in these factors.  
b. Second, the Contract expressly provided for the job to conclude no matter  
what unforeseen contingency arose and that changes to both time and  
price were contemplated where such contingencies arose. There was no  
expectation that such work was to be performed free of charge.  
[69] Peace Regional is correct that the General Requirements in Part 1.0 provide that the price  
bid for various items of work is quite inclusive and arguably includes sorting and hauling of  
material. Part 2.0 specifically addresses incidental workand notes that there is no separate  
payment for incidental work. In particular, incidental workincludes work shown on the plans  
and drawings and referenced in the General Conditions, etc. Such work is part of the complete  
work unless specifically excluded. Part 3.0 provides that payment for excavating and stockpiling  
includes full compensation for sorting the material into separate stockpilesas well as  
excavating, etc.  
[70] I find that the work that was provided in separating load-by-load contaminated and  
unsuitable material from suitable material for the liners was not incidental work. It is one thing to  
expect that a load of material will be either placed in the suitable or the unsuitable pile as was  
contemplated in the Contract, but it is another to be required to sort the material load-by-load. I  
also note that the bid price is inclusive of many items, with a qualification that the bid price is for  
work constructed in accordance with the drawings and specifications”. This goes to Maxim’s  
argument that the volume of materials to be handled was outside any commercially reasonable  
expectations given the volumes provided in the Contract or in accordance with the Contract  
[71] Tender Form, page 2, para 2 provides:  
Page: 13  
Any estimate of quantities as provided by the Engineer is approximate and only  
for the purpose of assisting the contractor in determining the scope of work. No  
claim will be made because of any increase or decrease in the quantities.  
[72] Further, Article 5: Site Conditions in the Instruction to Tenderers provides:  
The tenderer is not entitled to rely on any data or information included in the  
Tender as to site or subsurface conditions or test results indicating suitability or  
quality or otherwise of site or subsurface materials for use in carrying out the  
construction of the work.  
I find these provisions do not apply to work that was not contemplated in the Contract.  
The work that was performed must be paid for and delay from that work must be taken  
into account.  
[73] With respect to delay, I find that the sorting began June 1 and continued to at least the  
end of July. I find that there were 16 Site Occupation Days for this period. Based on a review of  
the work site reports, I find that a reasonable period to extend the Contract Time for the work  
done is six days. The price paid for the work is considered below as part of the damages sought.  
Changed cycle strategy  
[74] After being selected as the successful tenderer, Maxim provided a construction schedule  
which included a cycle strategy to Mr. Sather on May 6, 2011, even before Maxim was served  
with the Notice to Proceed with construction, at Mr. Sather’s request. Mr. Reeves explained that  
their cycle strategy was how they would allocate resources and work the project such that  
material was only handled a minimum of times. The original strategy was to excavate Cell 6 and  
then use material from Cell 3 and possibly Cell 2 on Cell 6 for its clay liner. The strategy was to  
finish Cell 6 first then proceed to Cells 3 and 2.  
[75] Maxim argues that it was directed to change its priorities and its cycle strategy to  
expedite the work on Cells 2 and 3 as much as possible to accommodate Peace Regionals  
contract with Plains Midstream. Maxim argues that the costs associated with this direction, none  
of which were contemplated by the parties at the outset of the Contract, were solely attributable  
to directions provided by Peace Regional and OMC and give rise to compensation.  
[76] Peace Regional argues that the cycle strategy was not part of the Contract and that the  
cycle strategy was not reflected in the Contract schedules. Peace Regional indicates that Maxim  
chose to change its cycle strategy in the middle of the construction on its own, not at the  
direction of Peace Regional. Peace Regional argues that the cycle strategy was not changed in  
response to the Regions prioritizing industrial Cells 2 and 3 around July 14th, 2011.  
[77] Mr. Heroux, in his note of June 14, 2011, states that, first thing this morning we found  
out that the contractor's plans had changed. As of today the contractor is leaving the work in  
MSW Cell 6 until the end of the job. The reason for this is because so much material excavated  
from the industrial cells has been unsuitable for liner that the contractor is concerned there won't  
be enough clay in the industrial cells for the liner in Cell 2 and 3.”  
[78] I am not satisfied on the evidence that Maxim was forced to change its cycle strategy at  
the behest of Peace Regional at least not directly. It appears that Maxim had to change its  
strategy due to the unsuitability of the material being found in Cells 2 and 3, as just discussed.  
This forced Maxim’s hand, no doubt along with the requests of Peace Regional, and Maxim  
Page: 14  
made the choice to change its cycle strategy. As discussed above, Maxim will receive some  
Contract Time arising from sorting unsuitable material load-by-load and damages will be  
discussed below. This appears to be the root of the change and I am not prepared to provide  
further time or damages for the changed cycle strategy per se.  
Delays in testing  
[79] Maxim argues that OMC’s decision to do its own testing of material caused considerable  
additional delays in a project that was already behind schedule due to weather. Maxim asserts  
that OMC had no right under the Contract to reject the test results of JR Paine & Associates (“JR  
Paine”) and insist on its own testing. Specifically, Maxim argues that OMC’s conduct as  
engineer breached its duty of good faith by refusing to recognize that using its own resources to  
test the gravel was causing significant delays to Maxim and the project. In the end these delays  
were beyond Maxim's control. Maxim points to GC8, Article 1 that provides that if the  
contractor is delayed in the performance of the work by an act of the engineer, then the Contract  
Time shall be extended for such reasonable time as the engineer may decide in consultation with  
the contractor and the contractor shall be reimbursed for any costs incurred by him as a result of  
such delay. No agreement was reached, and the delays are compensable by an extension of  
Contract Time and reimbursement for costs.  
[80] Peace Regional argues that the testing conducted was appropriate and that the gravel  
supplied by Maxim’s gravel supplier was the problem and the cause of the delay on the project.  
OMC was not obliged to accept deviations from the Contract specifications. Further, Peace  
Regional argues that there is no evidence to prove that even if another firm would have tested the  
gravel that the turn around time or the test results would have been any different. If the turn  
around time was a delaying event, then Maxim should have given notice under the Contract but  
Maxim did not do so. The Contract did not expressly provide the turn around time for testing and  
Maxim never provided notice of this alleged cause of delay.  
[81] Section 01400, of the Contract, Quality Control, provides that “testing shall be carried out  
by an independent inspection firm appointed by the Engineer”. OMC interpreted that to mean it  
could appoint itself and do the testing. It chose to do so at its facilities in Edmonton.  
[82] Mr. Reeves testified that the same rain that made it impossible to work was affecting their  
subcontractor’s inventory. Rain on large piles of rock necessarily changes the composition of the  
pile by washing away the “fines” to the bottom. Given the already lengthy delays from weather,  
Maxim was seeking short turnaround time on the testing of the granular material and seeking the  
use of the local testing firm of JR Paine. In fact, Mr. Sather testified the method of testing was  
standardized such that JR Paine and OMC should have arrived at the same result.  
[83] The question then is whether there was a delay by using OMC in Edmonton and whether  
notice of the delay and claim was given by Maxim.  
[84] I do not have a lot of evidence with respect to the effect of the delays, although I am  
satisfied that there were delays. I have a May 13th email attaching a report from JR Paine  
indicating their turnaround can be within one day. The sample was dropped off May 12 and the  
results were available May 13. Likewise, a sample provided June 13 seems to have been  
processed within 24 hours. Mr. Reeves’ evidence is that JR Paine indicated it could turnaround  
the testing in 24 hours.  
Page: 15  
The evidence is that the samples were sent to OMC’s Edmonton office on a Greyhound  
Bus. Mr. Sather testified that the turnaround time was “3-4 days”. A sample dropped off on  
August 17th, 2011 was not completed until August 22nd (five days) through OMC's testing  
process. A sample taken September 7 was not processed until September 13 (six days). However,  
I do note another sample taken by OMC on August 25th was processed by the next day.  
Nonetheless, it is patently obvious that there was delay due to OMC using its Edmonton facility.  
[86] With respect to notice on this issue, in an August 24 email to Mr. Sather, Mr. Reeves  
raised concerns with respect to OMC doing testing and the consequential delays to the project.  
On August 30 he again raised the concern indicating that JR Paine was local and could run the  
tests right away. On that occasion he asked if OMC was going to do the testing how fast could  
the turn around be. Mr. Sather's response was that the turn around time would be three to four  
days subject to a courier's delivery time. I find that Peace Regional had notice and that there were  
delays attributable to the use of OMC processing the sample testing from its lab in Edmonton.  
[87] The delay caused by the decision to test from Edmonton is difficult to quantify. The one  
concrete example was where concerns of quality were raised on a Saturday (October 22) and  
testing results were not available until the Wednesday (four days). While alternate sources of  
gravel were sourced to avoid losing three days of production, there was delay that needs to be  
compensated. In addition to this example, I find that there were other times where delay  
occurred. I note there are at least two other samples of testing out of Edmonton. I find that a  
reasonable extension to Contract Time for the delay in testing is six days.  
Maxim Delays  
[88] Peace Regional argues that in addition to the delays that are asserted by Maxim, I must  
consider whether any of the delays are as a result of Maxim’s conduct and breaches.  
[89] Peace Regional argues that Maxims gravel supplier was a source of delay as discussed  
above. In addition, Peace Regional argues that Maxim had deficient resources dedicated to the  
job including incompetent crew members, malfunctioning machinery, and scheduling problems.  
They point to concerns reported on OMC's daily progress reports. Peace Regional argues that all  
of the above problems and issues were Maxim’s sole responsibility and they caused or at the  
very least contributed to the delay on the project. Peace Regional argues that the timing of many  
of these occurrences overlap with the events that make up Maxims delay claims against Peace  
[90] Maxim submits that Peace Regionals argument that there were concurrent delays  
attributable to Maxim should be precluded either for the purpose of assessment of damages or  
apportionment. Maxim argues that on a substantive analysis of these arguments they are not  
made out. The evidence is weak. The authors of the records on which those arguments were  
made were not called to give evidence and any evidence is an example of hearsay or double  
hearsay. Second, employee turnover is a regular occurrence in every industry, and it was not  
shown to result in a loss of productivity overall. Third, the reference to equipment and scrapers  
breaking down is misplaced in any event as the equipment was brought in specially to deal with  
the topsoil berms and was ultimately kept on the site to expedite the work at Peace Regionals  
request. Finally, in a general sense, equipment breaks down from time to time and it is also an  
anticipated and expected commercial reality factored into every job.  
Page: 16  
[91] My trial notes indicate that there were attempts by counsel for Peace Regional to raise  
issues of delay by Maxim. For example, Mr. Reeves was cross examined on Mr. Richard’s notes  
that a 627 scraper broke down. When asked if this resulted in a delay, Mr. Reeves testified there  
was no impact on the production schedule. When asked about the note that there were delays  
from a packer not being able to work in high gear, he admitted yes but noted this was because the  
packer cannot work in high gear when it is working in mud. He notes the cause of the delay was  
therefore the rain. Overall, this cross examination did not produce any evidence that Maxim and  
its resources were the cause of delay.  
[92] Mr. Heroux’s notes also mention times when, in his opinion, there were delay issues  
related to Maxim’s equipment and manpower. These notes were not put to Mr. Reeves in the  
same detail as Mr. Richard’s notes. I find that these notes are all hearsay as the report writer was  
not called nor could the comments be cross examined on any of the alleged issues. I recognize  
that these notes might arguably be a business record exception to hearsay as they were done in  
the usual course of a construction project, but I find that many of the comments are subjective  
and would still have been usefully cross examined on.  
[93] I find that Peace Regional has not proven that Maxim’s resourcing on the project  
(equipment and manpower) was a cause of the delays on the project.  
Cell 6 completion  
[94] Peace Regional also argues that Maxim is the reason why Cell 6 construction was  
abandoned until 2012. I disagree. The delay was largely caused by the weather and the fact that  
construction was pushed into the shorter days of the fall. As construction progressed it became  
less likely that Maxim was going to be able to complete both Cells 2 and 3 and Cell 6 before the  
winter season and freezing temperatures. Peace Regional acknowledges that it directed Maxim to  
focus on completing Cells 2 and 3.  
[95] The evidence establishes that on October 26, 2011, Maxim sought confirmation it could  
delay Cell 6 construction and that it would not suffer any cost penalties as a result. Maxim noted  
it was prepared to finish Cell 6 (or attempt to) if that was the direction by Peace Regional. On  
November 7th, 2011, Peace Regional confirmed its agreement that continuing construction of  
Cell 6 was no longer viable. However, Peace Regional expressly stated there would be no change  
to the schedule related to Contract Time. I find that the period between the end of the  
construction season in 2011 and the start of the season in 2012 was a winter break that is  
properly considered a weather delay for Contract Time calculation purposes. Otherwise, both site  
occupancy days and Contract Time were unchanged.  
Conclusions on delay  
[96] In conclusion, I find that there was delay which should have been compensated with a  
reasonable extension of Contract Time including with respect to the berms, the weather, the  
unsuitable material, and the choice by OMC to test material out of Edmonton. I will address the  
extension of the Contract Time below and deal with any damages that may arise.  
Extension of Time and Damages  
[97] Given the assessment of the delay above I must now calculate the Contract Time, the Site  
Occupation Days and the amount of any damages proven.  
Page: 17  
Contract Time  
[98] Maxim argues that “Site Occupancy” and “Contract Time” cannot be distinct concepts  
under the Contract as page three of the Tender Form made “Contract Time” subject to SGC5,  
which is “Duration of Work and Site Occupancy”. However, Maxim also notes that the closing  
provision of SGC5 provides that SGC5 “in no way negates or mitigates the conditions of GC8  
Delays...or SGC4 Late Completion”. Maxim argues that accordingly, the “reasonable time” and  
mutual decisionrequired under GC8, Article 3.00, informs all of SGC5, and affects all of  
Contract Time, Site Occupancy, and the price. On a common sense, whole contract basis, Maxim  
argues that Site Occupancy and Contract Time are therefore linked.  
[99] While there is some logic in that analysis, I do not find that it changes the clear  
provisions in the Contract. In the Contract before me there are several provisions relating to the  
question of time and delay. Specifically, there is “Contract Time” and “Site Occupation Days”.  
While it is sometimes hard to distinguish between them because they are both connected to the  
concept of time and are affected by delay, they are different concepts, calculated differently with  
different consequences under the Contract. They cannot be conflated.  
[100] Nonetheless, Contract Time is troubling in this Contract because in the Tender Forms the  
Contract Time dates were set from May 15th, 2011, to August 31st, 2011. These dates were non-  
negotiable and the tenderers could not modify them. When the process did allow for the  
tenderers to bid Site Occupation Days this became problematic because of the Contract Time.  
Case in point, when Maxim bid with Site Occupation Days of 113 days the nature of time meant  
that even if they made the Site Occupation Days they would be offside the stated Contract Time  
because May 15th to August 31st is only 109 days.  
[101] This is what happens when a contract is cobbled together. Mr. Sather testified that he  
chose May 15 as a realistic time that the construction site would be ready for construction and he  
chose August 31 to allow some time post-construction so the owner could finish up work before  
winter. He decided 108 days was reasonable.  
[102] Does this mean that when Peace Regional accepted a bid with 113 Site Occupation Days  
that it also accepted an extension of the non-negotiable Contract Time? I find that it must have as  
this is the only commercially viable interpretation of the Contract. Time is time. If Peace  
Regional was prepared to accept 113 Site Occupation Days, it must also have accepted the  
Contract Time would be extended four more days. There is no evidence that Maxim was asked to  
reduce its Site Occupation Days to 109.  
[103] In addition to the extension due to the Site Occupation Days bid as found above, GC8,  
Article 3.00 states:  
If the Contractor is delayed in the performance of the Work by… any cause of  
any kind whatsoever beyond the Contractors’ control, then the Contract Time  
shall be extended for such reasonable time as may be mutually decided by the  
Engineer and Contractor, but in no case shall the extension of time be less than  
the time lost as the result of the event causing the delay, unless such shorter  
extension of time be agreed to by the Contractor.  
[emphasis added]  
[104] As found above the berms, the weather, the unsuitable materials, and the delays in testing  
were beyond the control of the Contractor and the Contract Time must be extended. In addition,  
Page: 18  
as noted above I find that the Contract Time was extended on October 20, 2011, when the parties  
agreed that Cell 6 would not be completed until 2012. This was mutually decided. Maxim asked  
that it be extended but noted it was prepared to finish if that was Peace Regional’s instructions.  
Peace Regional agreed to defer the completion to the spring of 2012. Subsequently the parties  
agreed (through Mr. Sather when he accepted the proposed work schedule) that the Cell 6 work  
would continue starting May 23, 2012, and Cell 6 was completed June 22, 2012.  
[105] I note that the Certificate of Substantial Completion for Cells 2 and 3 was issued  
November 10, 2011. The Certificate of Substantial Completion for Cell 6 was issued June 22,  
2012. The original Contract Time for completion was August 31, 2011. I find that Contract Time  
is reasonably extended by four days for the site occupation discrepancy discussed above. It is  
also extended three days for the berms. Rain delay results in a reasonable extension of 59 days  
for rain and 12 days for drying. Contract Time is reasonably extended six days for unsuitable  
material sorting and extended six days for testing delay. This is a total extension of 90 days. In  
addition, the period between November 10, 2011, and May 23, 2012, does not count as it relates  
to the winter break as agreed to by the parties. I calculate August 31, 2011, to November 10,  
2011, as 71 days. Then there is the winter break. The remaining 19 days for Contract Time runs  
from May 23 to June 11, 2012. Contract Time ended June 11, 2012. As noted above, the work  
was substantially completed June 22, 2012, being 11 days late.  
Site Occupation Days  
[106] Calculation of site occupation is found at SGC5. Site Occupation Days are whole  
calendar days. Calculation of the days starts with the first calendar day of the first disturbance of  
the work site. Every calendar day after that counts unless it does not. Assessment of calendar  
days end when the project reaches substantial performance. The following days do not count as  
calendar days and are relevant to this action:  
a. When the contractor schedules days off for his workers (to a maximum of  
eight a month);  
b. When the project is delayed due to weather; and  
c. When the project is shutdown for the winter.  
[107] A weather delay is where the contractor works less than half of a normal day because of  
the weather or the conditions resulting from the weather. Drying or fixing damages caused by the  
weather also do not count as a calendar day. A normal day is the average of the duration worked  
in the preceding five uninterrupted working days. Summer days and hours will be longer than  
fall days and hours.  
[108] On Progress Payment Certificate #10, OMC determined that Maxim had taken 118 days  
of site occupancy to complete the project and therefore deducted $7,500.00 from the final  
amount owing to Maxim. Maxim had selected 113 site occupancy days in its bid.  
[109] Peace Regional noted that during the project OMC issued site occupancy memos. At trial  
I heard that, according to Mr. Reeves, Maxim received the site occupancy memos from OMC for  
the first time July 7, 2011. These memos spanned the preceding seven weeks. Mr. Sather claims  
Maxim had received copies of these earlier, but there is no written record of these documents  
being sent to Maxim at its head office, by email or otherwise. There is similarly no record of  
Maxim receiving these documents at the work site, which Mr. Reeves denied ever happened. For  
the reasons I stated earlier, I accept Mr. Reeves’ evidence over Mr. Sather’s.  
Page: 19  
[110] The same day the site occupation memo was received, Mr. Reeves sent a fax objecting to  
OMC’s purported calculation of site occupancy. I find that this constitutes full compliance on the  
Maxim’s part with any contractual requirement to provide notice.  
[111] I find that Maxim never agreed with OMC’s assessment of site occupancy throughout the  
project. According to Maxim’s calculations, it took them 109 days of site occupancy to complete  
the project. Using the daily site reports and the construction summaries provided by Mr. Sather  
and Mr. Reeves I have calculated Site Occupation Days to be 107 days; however, for the purpose  
of determining this issue I will agree with Maxim’s calculation of 109 days meaning that rather  
than being penalized $7,500 on the final payment, Maxim should have been credited $6,000.  
[112] The burden of proof is on Maxim to establish damages. In in Webb v Birkett, 2011  
ABCA 13 the Alberta Court of Appeal noted, at para 62:  
As stated by Lord Goddard, CJ in Bonham-Carter v Hyde Park Hotel (1948) 64  
TLR 177 at 178:  
Plaintiffs must understand if they bring actions for damages it is  
for them to prove their damage; it is not enough to write down the  
particulars, and, so to speak, throw them at the head of the court,  
saying: This is what I have lost, I ask you to give me these  
damages”. They have to prove it.  
i. Production losses & original tender profit losses  
[113] Maxim seeks production losses of $354,752.12 and original tender profit losses of  
$217,557.64. The production loss claim is based on Maxim’s expected tender costs versus the  
actual costs to arrive at the production losses. The profit loss claim includes profits expected on  
Maxim’s original. The figure is directly from Maxim’s project management costing program and  
Maxim’s expectation at the tender stage as to what profit it would earn.  
[114] While I accept that Maxim had production losses and did not make the anticipated profit  
on this project, I am not satisfied that these damages flow from the contract damages claims I  
have accepted. I note that profit was part of the tender process i.e. it was expected if the unit  
price was paid, there would be a profit. The profit was never intended to be a cost plus profit  
calculation. The weather delays had a lot of impact on all parties but were not the exclusive  
responsibility of anyone. It is expected that there would be negative consequences for both  
parties arising from the extraordinary rains and delays. I am not prepared to award damages for  
production losses or lost profit on the basis proposed as it is undoubtedly largely from the  
adverse weather.  
ii. Equipment costs during rain and drying days  
[115] Maxim claims that due to the location and nature of the project, Maxim was unable to  
undertake any other work during the significant rain delays and drying days. Maxim asserts that  
at the instruction of Peace Regional and OMC, Maxim kept crews and equipment ready and able  
to perform work on the project throughout the periods of inclement weather.  
[116] I again find that damages for the rain delay, per se, are not the responsibility of Peace  
Regional. With respect to equipment being “trapped” on site, it is undoubtedly true that  
equipment sat idle. The rain caused that. The fact that the location was remote and made it  
Page: 20  
impossible to use the equipment for other purposes was no doubt part of the compensation  
bargained at the beginning of the project. All parties knew there would be rain, it was the  
quantity that was surprising.  
[117] That said, on days spent drying and de-mudding, the equipment was being used for  
purposes not anticipated in the Contract. As provided in GC2, the third sub-section 2.05, “It is  
not intended that the Contractor shall provide any work not covered or properly inferable from  
any of the contract documents”. Where the Contractor provided such work, it is entitled to be  
paid for it. I have no difficulty in finding that Mr. Sather and the on-site superintendent ordered  
the de-mudding and clean-up as part of the general push to get the project completed in spite of  
the torrential rains. Peace Regional is responsible for this cost.  
[118] However, the evidence I have on this point is difficult to extract. The evidence I have is  
the cost of having the equipment sit idle each rain day and I am not providing damages for that.  
The “drying days” some equipment was used but I cannot tell if that was to accomplish some  
work or was purely for de-mudding. I also have numbers for a generator, fuel, and a pump and  
hose. I did hear evidence that they were used for de-watering and do award damages for those  
items totalling $4,986.10.  
iii. Additional project management & administration costs from rain delays  
[119] Mr. Reeves testified that there were additional project management and administration  
costs due to the management of the rain delays. I am prepared to accept these come from the  
management and administration of de-watering, de-mudding and being on standby such that they  
are not the usual cost of a rain day during an unremarkable project season. Maxim claims  
$25,000 for Project Management and $12,000 for administration costs being 200 hours for each.  
Exhibit 7, Tab A-5 outlines the calculations. I accept that these are reasonable in the  
iv. Rain de-mudding and standby costs  
[120] Maxim claims that these items represent additional costs that could not have been  
anticipated and were incurred by Maxim due to rain delays. Maxim had to rent additional water  
pumps throughout the duration of the project in addition to using its own. The rain delays also  
created additional challenges with the site conditions and required Maxim to work into late  
October/early November, which could not have been reasonably anticipated. As a result, Maxim  
incurred additional costs to bring in or rent additional equipment. These costs represent overages  
that were not included in the bid price. The claimed costs include a Water Pump for $2,884.00,  
an 815 Packer for $23,000.00, Light Plants and Fuel for $3,878.30, a Cat Dozer and Operator for  
$8,332.50 and a Rock Truck for $12,194.15.  
[121] As with the production losses and profit losses discussed above, I find that the rain delay  
was a shared risk. The fact that these costs were not anticipated does not make them claimable.  
No one anticipated monsoon rains. Likewise, the need to extend the work into the fall is not  
something that can be claimed. That result was due to the rain. The losses incurred because of  
the delay per se are not recoverable. I am however prepared to give costs for the extraordinary  
expenses related to the delay including the water pump and the 815 Packer which was discussed  
between the parties and was sought at the request of Peace Regional for a total of $25,884.00.  
Page: 21  
v. Liner supplier additional weather delay charges  
[122] Maxim claims $29,062.50 for the amounts it paid to WTL to be on standby while waiting  
for the rain to end and the area to dry. Peace Regional argues that this is a coordination issue for  
which Maxim is solely responsible under General Requirements, Division 1, Section 01040.  
While this may be in the usual course (and I am not certain it is) in these particular circumstances  
the need to keep WTL on standby was necessitated by Peace Regional’s insistence (through Mr.  
Sather) that the cells be finished as soon as possible. The evidence established that, had WTL not  
been guaranteed this standby amount, they would have gone to different job sites and there was  
no guarantee when they would become available again. I find that these expenses were incurred  
at Peace Regional’s insistence and direction and they are payable in the amount of $29,062.50.  
vi. Liner supplier restocking for material overages  
[123] In addition to the standby charges for WTL, Maxim claims $1,618.96 as the supplier was  
unwilling to pay its employees to wait at a site being unproductive when there was other work  
they could do and material overages was part of the agreement to have them standby as long as  
there were invoices supporting this figure. I find these are payable for the same reason as the  
standby charge.  
vii. Tire repairs from scrap buried in Cells 2 and 3  
[124] Maxim claims costs of $7,274.92 for tire repairs on its rock trucks. Maxim was not  
expecting to run into steel material or waste buried just below the surface and as a result, the  
sides of the tires on its rock trucks were sliced and had to be repaired. Maxim claims these costs  
were incurred due to the inaccuracy of OMC’s Geotech/bore hole reports.  
[125] I am not prepared to award these damages. There was little evidence on this issue and it is  
not obvious to me that such material would not be found buried at a waste site. I also accept  
Peace Regional’s argument that these costs are included in the unit rates charged – having to  
replace tires is part of doing business.  
viii. Additional leachate material upcharge due to testing delays  
[126] Maxim claims $4,308.40 arising from the delays in waiting for leachate test results due to  
OMC’s refusal to use the nearby services of JR Paine. Maxim managed to bring in a small  
amount of material from another supplier to keep the project moving while waiting for test  
results from OMC. This figure simply represents the difference in cost for this product, which  
was an additional $2.00/tonne.  
[127] While I found delay as a result of the testing delay, it was Maxim’s choice to try to  
source elsewhere for the leachate material. I am not prepared to award these damages.  
ix. Additional living out allowance for fall 2011  
[128] Maxim claims $14,850 representing the additional living out allowance (“LOA”) costs  
incurred by Maxim due to delays in the project, which resulted in having to work shortened days  
in the fall of 2011. By November of 2011, the site was receiving just over eight hours of daylight  
as opposed to the 17 hours it was receiving in June of 2011. Based on Maxim’s calculations, it  
took an additional 33 days to complete the same work due to the shortened days. The figure of  
$14,850.00 was derived by multiplying 33 days by the tender price for the LOA for a crew of  
four, which was $450/day.  
Page: 22  
[129] I am not prepared to award these damages. The bulk of the delay was due to rain. The  
burden of that falls on both parties and Maxim cannot be compensated for this loss.  
x. Additional living out allowance for spring 2012  
[130] Maxim claims $28,191.58 representing the additional LOA from start to finish for crews  
on site to complete Cell 6 in the spring of 2012 using the LOA tender price and multiplying it by  
the number of days. For the reason above relating to the fall of 2011, I am similarly not prepared  
to award these damages.  
xi. Mobilization/De-Mobilization of 815 Equipment for spring 2012  
[131] Maxim claims $5000 in additional costs incurred by Maxim for the mobilization and  
demobilization costs for 815 packer and additional equipment that was brought to site for  
completion of Cell 6 in spring of 2012. Again, this is a consequence of the rain delay and is not  
xii. Site administration costs overruns to finish Cell 6  
[132] Maxim claims $51,000 for site administration overrun costs to finish Cell 6. As with the  
above costs this relates to the rain delay and is not recoverable.  
Back Charges  
[133] Peace Regional’s view is that Article 2.2 of the Contract provides that Maxim is liable to  
pay liquidated damages to Peace Regional for every day that the work remained incomplete  
beyond the Contract Time. This is further described by SGC4:  
Should the Contractor fail to meet the completion date given, the Owner shall be  
entitled to make deductions from payments due the Contractor as compensation  
for costs incurred by the Owner beyond the completion date. Such costs shall  
include but are not necessarily limited to, administration, bookkeeping and  
engineering costs. The completion date shall be as noted in the Agreement unless  
the Owner has agreed, in writing, to an extension of time for completion.  
[134] Peace Regional argues that Maxim failed to complete the Contract within the Contract  
Time as determined in accordance with GC8. Peace Regional has claimed a number of different  
heads of deductions against Maxim for its delayed completion including for engineering  
services, double handling of waste, and frost protection.  
[135] OMC deducted the following amounts from monies owed to Maxim based on SGC4, on  
the assumption that the Contract Time expired on October 20, 2011:  
Engineering Services Oct 21 to Nov 10, 2011 - $50,175.10  
Engineering Services May 14 to June 22, 2012 - $91,348.36  
Double Handling of Waste (as per PRWMC costs) - $133,690.00  
Frost Protection for 2011 constructed clay liner - $24,148.60  
Total Deductions for Cost Incurred - $299,362.06  
Page: 23  
Engineering services  
[136] The deductions for engineering services refer to the OMC professional consulting fees  
charged by Peace Regional after October 20, 2011. My concern with respect to these charges is  
that many of the engineering charges after the Contract Time would have been charges that  
would have been incurred in any event. The Contract does provide that Peace Regional is  
entitled to make deductions from payments due the Contractor as compensation for costs  
incurred by the Owner beyond the completion date”. Does this mean all costs or damages, i.e.,  
costs in excess of what would have been incurred if the Contract was performed on a timely  
basis? For example, the engineering required to get the government approval was engineering  
that was going to be dealt with whether the Contract was finished on time or not. I see no  
adjustment being made for this in the back charges. Interpreting this provision in its ordinary,  
commercially cognizant meaning, it must mean that the costs reference that cost otherwise not  
payable if the Contract was performed on time.  
[137] As I have found that the Contract Time expired June11, 2012, only engineering services  
from June 12, 2012, to June 22, 2012, are recoverable. Further it is only services that were  
incurred because the Contract Time was exceeded.  
[138] Maxim argues that OMC's extra engineering costs for Cell 6 were within the original  
budget for that Cell and so no damages have been established. I have gone through OMC’s  
invoices to Peace Regional in detail and based on a Contract Time expiry of June 11, 2012, I find  
that there were engineering services costs incurred because of the delay in completion. I find that  
damages for costs incurred past the Contract Time are $17,625 exclusive of GST, not the  
$91,348.36 claimed.  
Double handling of waste  
[139] The charges for the double handling of waste referred to the industrial waste that had to  
be stockpiled in November because the industrial cells were not complete rather than being  
placed in cells upon arrival as is typical. The waste had to be stockpiled on a temporary basis on  
a biodegradable pad and then was hauled into the industrial cells once they reached substantial  
completion. This work was tracked via multiple invoices and transaction reports.  
[140] OMC’s budgetary information disclosed that OMC was overbudget to October 20, 2011,  
by almost $60,000, which Mr. Sather confirmed at trial was attributable to the same rain that had  
affected Maxim.  
[141] Peace Regionals double handling of material that was accepted knowing rain had delayed  
their ability to receive it, was self-inflicted harm.  
[142] These are damages arising from rain delay. It is not the responsibility of Maxim. Both  
parties bear the burden of the monsoon rains. This is Peace Regional’s burden.  
Frost protection  
[143] Maxim was back charged a total of $32,745.60 for its “refusal” to place straw on the  
partially completed liner for Cell 6. Peace Regional argues that Maxim had a specific obligation  
to protect the liner from the winter elements and failed to meet this responsibility even though it  
was repeatedly informed of this requirement. Maxim informed OMC on November 18th, 2011,  
that laying down straw to protect the clay liner in Cell 6 was, in its professional opinion,  
unnecessary and that it would simply rework or replace the clay liner in the spring. However, on  
Page: 24  
the advice of OMC, Peace Regional did not accept inaction to be a viable protective measure.  
OMC and Peace Regional arranged for the straw to be placed.  
[144] This issue is another of the areas where I find Mr. Sathers evidence unreliable and  
incredible. I accept the evidence of Mr. Reeves with respect to this incident. OMC acted  
unreasonably and in bad faith by demanding that Maxim protect the clay liner for Cell 6 but at  
the same time refusing to provide any further information or direction on how to do so to OMC’s  
satisfaction. Either Mr. Sather should have given his opinion or advice to ensure any winter  
protection met his standards or he should have let Maxim do what they wanted leave it and re-  
work it. As noted by Maxim the need for straw protection was not a consequence that was  
foreseen by anyone. Under the Contract, Maxim had control of the work and the site. They were  
prepared to live with the consequences.  
[145] Time revealed that Maxim’s position was valid as it was cheaper for Maxim to rework  
any damages of the Cell in the spring (as they were directed to do by OMC) than the cost of  
applying the straw. The decision to apply the straw in the circumstances was Peace Regional’s  
choice and their responsibility. There should be no back charges for this work.  
Conclusion on costs incurred beyond Contract Time  
[146] In the result I find that there were valid back charges for exceeding the Contract Time  
under the Contract for a total of $17,625, which was appropriately deducted from the amounts  
payable on the Contract.  
Changes to Progress Payment Certificate Amounts  
[147] In addition to its claim for damages, Maxim claims that it was not paid the amount that  
was contracted for under the Contract. At trial Peace Regional admitted that it still owes  
$139,769.34 to Maxim on the Contract according to its own calculations. In addition, Maxim  
claims that the excavated and stockpiled amounts were being changed by OMC after the amounts  
were certified. The result is that they were not paid all amounts due for the total work performed.  
[148] Progress Certificates were issued by OMC monthly. OMC would certify amounts for  
which unit prices were provided under the Tender. These are amounts due and payable to Maxim  
for work they completed in the prior month. The dispute arises where OMC certified amounts  
and then lowered those amounts in subsequent Progress Payment Certificates (“PPC's”).  
[149] Peace Regional argues that although quantities have been approved by OMC along the  
way through the issuance of various PPCs, the payment for work done including the volume of  
excavations and the site of the stockpile will be based on the final size and dimensions of the  
stockpile. Peace Regional asserts that the final PPC issued by OMC reflected the “final position”  
of the various items in the payment certificates as provided for in the Contract and that payment  
was approved by OMC based on the wording of the Contract referencing “final position in the  
stockpile”, in their interpretation.  
[150] Maxim does not dispute that the size of some of the stockpiles have decreased, but they  
argue that the reason these stockpiles had to be reduced was due to the need to use clean  
stockpiled material since so much unexpected garbage material was found on site. That use did  
not negate the fact that the materials were stockpiled to begin with, a Tender Form line item that  
attracted payment.  
Page: 25  
[151] The Contract Specifications in Part II at Section 01025, Part 3 provides that the “volume  
of material excavated and stockpiled will be measured in cubic metres in its final position in the  
stockpile (fill volume). This is in contrast to the measurement of the volume of material  
excavated and disposed of in Phase 4B where it will be measured in cubic meters in its original  
position (cut volume).  
[152] It is apparent from a plain reading of these provisions that the language is intended to  
distinguish between two different ways of measuring how much earth is moved. One can either  
measure the size of the pile of earth created (fill volume) or measure the size of the hole left  
behind (cut volume). The provisions do not support an argument that no matter how much earth  
was moved the contractor is only paid for the final measurements.  
[153] OMC are professional engineers and Maxim was entitled to rely upon the accuracy of  
their certificates. The monthly certificates were intended to reflect the amount of progress and  
the work completed each month. It is expected that when something is certified by a professional  
it means that whatever is certified is correct. There is no basis in the Contract for OMC to have  
withdrawn or reduced amounts that had been previously certified.  
[154] In two cases, OMC certified payment for excavated and stockpiled quantities which it  
later reduced, leading to a lower overall job cost.  
[155] OMC certified the volume of material excavated and stockpiled by Maxim from Cell 6  
and Maxim was paid for the quantity that had been certified in PPC#4. The certified quantity was  
reduced subsequently. The quantity certified in PPC#4 was 15,600 cu/m and in PPC#10, this  
quantity was reduced to 4,486.42 cu/m, a difference of 11,113.58 cu/m, which is equal to a  
payment deduction of $30,784.62 (11,113.58 x $2.77).  
[156] The certified quantities for excavating and stockpiling materials from Cells 2 and 3 were  
also reduced from the amount that was certified and that Maxim was paid for in PPC#4. In  
PPC#4, the amount excavated and stockpiled was certified as 31,319 cu/m. In PPC#10, that  
amount was reduced to 20,934 cu/m, a reduction of 10,385 cu/m, which is equal to a payment  
reduction of $43,097.75 (10,385 x $4.15).  
[157] The total amount that was improperly deducted is $73,882.37.  
[158] At trial Peace Regional admitted that did not pay the sum of $139,769.34 from amounts  
properly due and owing to Maxim. In addition, there was a holdback related to Cell 6 in the  
amount of $24,587.88. There was no defence or justification for its failure to release this  
holdback other than Mr. Sather suggesting that paperwork such as statutory declarations may not  
have been completed. OMC can advise of the paperwork required and upon provision of the  
holdback must be released to Maxim. Therefore, this amount is also properly owed to Maxim.  
[159] The amounts to be paid to Maxim by Peace Regional are as follows:  
Outstanding payment  
Cell 6 Holdback  
Payments due from altered certificates  
Site occupancy days adjustment  
Page: 26  
Equipment costs drying  
De-mudding costs  
Liner Supplier  
Less damages for exceeding Contract Time ($17,625.00)  
TOTAL $294,047.19  
Plus interest from July 10, 2012 being the date of PPC#10.  
[160] If the parties are unable agree on costs, they shall provide written submissions to me,  
within 45 days after the release of this decision. Submissions are to be limited to 3 pages. In  
addition, a draft Bill of Costs plus copies of relevant offers are to be attached as appendices.  
Heard on the March 1 to 11, 2021 and March 24 26, 2021.  
Final written arguments provided to the Court by June 11, 2021.  
Dated at the City of Edmonton, Alberta this 13th day of May, 2022.  
M.E. Burns  
Matthew Pruski & Balraj Deol  
Rackel Belzil LLP  
for the Plaintiff  
Paul Stocco & Nathaniel Brenneis  
Brownlee LLP  
for the Defendant  

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