T-665-79
Enconair Systems Ltd. (Plaintiff)
v.
The Queen (Defendant)
Trial Division, Smith D.J.—Winnipeg, February
27 and June 27, 1979.
Crown — Contracts — Plaintiff subcontracted to supply
and erect growth chambers in building under construction by
another contractor — Expenses allegedly to be borne by the
contractor for the building, assumed by the plaintiff
Whether or not plaintiff entitled to compensation for these
expenses — Alternatively, whether or not an order should
issue pursuant to Rule 327 directing the trial of an issue to
determine if plaintiff entitled to such declaration — Federal
Court Rules 327, 341.
This is a motion under Rule 341 for a judgment declaring
that, pursuant to the terms of sections 15 B.5.7 and 15 C.5.7 of
a contract, plaintiff is entitled to compensation from the
defendant for certain costs and expenses that allegedly were to
be assumed by the general contractor but actually were borne
by plaintiff, or alternatively, for an order pursuant to Rule 327
directing the trial of an issue to determine whether or not
plaintiff is entitled to such declaration. The question of liability
depends solely on who is meant by the term "General Contrac
tor" in those sections. The contract with which this action is
concerned (the second contract) is one under which plaintiff
undertook to supply and erect in place plant growth chambers
in a building being constructed by Poole Construction Com
pany Limited under a contract (the first contract) let by the
defendant.
Held, the motion is allowed. The general contractor and the
supplier referred to in the paragraphs in question cannot be the
same legal entity. In these paragraphs the word "supplier"
refers to the plaintiff. The term "General Contractor" as used
in these two paragraphs must mean the building general con
tractor, who would be in charge of the building site and of the
growth building during its construction. In all six places in the
contract in which the term "General Contractor" is used, it
means the general contractor for the building and not the
plaintiff. Although defendant's counsel cited several paragraphs
in the specifications to support his submission that the words
"General Contractor" should be interpreted as meaning the
plaintiff, such an interpretation would not be logical. Certain
subsections referred to were general requirements of the con
tract and would give way in the event of conflict with specific
subsections. Other subsections cited were not applicable to the
question before the Court. Plaintiff cannot compel Poole Con
struction Company Limited to compensate it for the costs and
expenses in question as that company is not a party to the
contract. Nevertheless, plaintiff was forced to do itself things
which Poole Construction Company Limited was to do pursu
ant to plaintiff's contract with the Crown, and so incurred
expenses in performing that contract that should have been
borne by the company. As it has no redress against that
company, plaintiff is entitled to be compensated by the Crown
for those costs and expenses.
MOTION for judgment under Rule 341.
COUNSEL:
John S. Lamont, Q.C. for plaintiff.
Sherwin Lyman for defendant.
SOLICITORS:
Aikins, MacAulay & Thorvaldson, Win-
nipeg, for plaintiff.
Deputy Attorney General of Canada for
defendant.
The following are the reasons for order ren
dered in English by
SMITH D.J.: This is a motion, under Rule 341
for a judgment declaring that, pursuant to terms of
sections 15 B.5.7 and 15 C.5.7 of the agreement
referred to in the statement of claim, the plaintiff
is entitled to compensation from the defendant for
the costs and expenses referred to in paragraphs
numbered 6 and 7 of the statement of claim, or in
the alternative, for an order pursuant to Rule 327
directing the trial of an issue to determine whether
or not the plaintiff is entitled to such a declaration,
or for such further or other order as may be just.
Rule 327 is as follows:
Rule 327. Upon any motion the Court may direct the trial of
any issue arising out of the motion, and may give such direc
tions with regard to the pre-trial procedure, the conduct of the
trial and the disposition of the motion as may seem expedient.
And Rule 341 reads:
Rule 341. A party may, at any stage of a proceeding, apply for
judgment in respect of any matter
(a) upon any admission in the pleadings or other documents
filed in the Court, or in the examination of another party, or
(b) in respect of which the only evidence consists of docu
ments and such affidavits as are necessary to prove the
execution or identify of such documents,
without waiting for the determination of any other question
between the parties.
The question of liability in this action depends,
on the evidence before me, solely on who is meant
by the term "General Contractor", as that term is
used in sections 15 B.5.7 and 15 C.5.7 of the
specifications forming part of the agreement
referred to in the statement of claim, which is an
agreement between Her Majesty the Queen, repre
sented by the Department of Public Works, and
the plaintiff.
There were, in fact, two contracts being carried
out at approximately the same time. The first was
a building contract let by the defendant, represent
ed by the Department of Public Works, to Poole
Construction Company Limited, to erect a build
ing, sometimes referred to herein as the "growth
building", for the Department of Agriculture, at
the City of Saskatoon. The second was a contract
under which the plaintiff undertook to supply and
erect in place, in the building being erected under
the first contract, eighteen plant growth chambers
of the walk-in type and ten plant growth chambers
of the reach-in type. It is the second contract with
which this action is concerned.
On the first page of this contract, dated July 8,
1977 the plaintiff is described as "Enconair Sys
tems Ltd., a body corporate whose head office or
chief place of business is in Winnipeg, Manitoba
(referred to in the documents forming the contract
as the `Contractor')." The contract is a lengthy
one, consisting of five documents, the last of which
consists of 64 pages of detailed specifications.
Throughout the contract documents the plaintiff is
referred to a great many times by the term "Con-
tractor". In the specifications it is referred to as
the "Contractor" twenty-one times, and is also
referred to as the "Manufacturer" eight times and
twice as the "Supplier".
Section 15 B of the specifications contains, in
nineteen pages, the detailed specifications for the
walk-in growth chambers, and section 15 C con
tains, in eighteen pages, those for the reach-in
growth chambers.
As indicated at the beginning of these reasons
the plaintiff is relying primarily on the provisions
of section 15 B.5.7 and section 15 C.5.7. Section
15 B.5.7 reads:
15 B.5.7 The General Contractor shall receive the equipment,
store safely, move crates to final location, using hoists or
winches as required without charge to supplier.
As this paragraph is part of section 15 B it
obviously relates to the walk-in growth chambers.
Section 15 C.5.7 is in exactly the same terms, and
as it is part of section 15 C it obviously relates to
the reach-in growth chambers.
The plaintiff submits correctly that the General
Contractor and the supplier referred to in each of
these two paragraphs cannot be the same legal
entity. Unquestionably the things the General
Contractor is required by these contracts to do will
involve costs, but none of these costs are to be
charged to the supplier. It is further clear to me
that in these paragraphs the word "supplier" refers
to the plaintiff. Reference to sections 15 B.1 and
15 C.1 will suffice to show that this is so. Para
graph .3 of section 15 B.1 describes the work
which the Contractor, i.e.: the plaintiff, is required
to do with respect to the walk-in growth chambers,
and paragraph .3 of section 15 C.1 describes the
work the plaintiff is required to do with respect to
the reach-in growth chambers. Except for minor
differences due to the different types of growth
chambers the two paragraphs are couched in simi
lar words. It is therefore necessary to quote only
one of them. Paragraph .3 of section 15 B.1 reads:
15 B.1 ...
.3 The work covered by this section includes, but is not
necessarily confined to the following:
.1 Supply and erection in place of fifteen (15) standard
height (80" growth height) walk-in growth chambers.
Weight of each chamber shall not exceed 4500 lbs.
.2 Supply and erection in place of three (3) extra height (96"
growth height) walk-in growth chambers, weight of each
chamber shall not exceed 5000 lbs.
.3 Supply and installation of two (2) portable 24 point
camless programmers.
.4 Supply and installation of all refrigeration required.
.5 Supply and installation of air cooled condensers on the
roof for the walk-in chambers.
.6 This Section shall be responsible for the supply and
installation in the correct location of all necessary anchor
bolts to securely fasten above air cooled condensers to struc
tural steel beams.
.7 Provide rubber in shear insulators under all bolts holding
down above Air Cooled Condensers if the motors in the
condensers are not resiliently mounted.
Since, by the terms of these seven subpara-
graphs the plaintiff is expressly required to supply
and erect or to supply and install everything called
for by the contract, the word "supplier" in sections
15 B.5.7 and 15 C.5.7 must mean the plaintiff.
To my mind it is also clear that the term
"General Contractor" as used in those two para
graphs must mean the Building General Contrac
tor, who would be in charge of the building site
and of the growth building during its construction,
and would therefore be the proper party to receive
and store, pending installation, equipment deliv
ered to the site by the plaintiff under its contract.
Sections 15 B.5 and 15 C.5 contain other provi
sions which confirm the foregoing conclusion.
These sections are respectively concerned with
erection and installation of the walk-in growth
chambers and the reach-in growth chambers.
Paragraph .3 of section 15 B.5 provides (that the
Contractor shall):
.3 Ensure sufficient pre-delivery notification to co-ordinate
with the Building General Contractor all scheduling of
installation.
When, four short paragraphs later, paragraph .7
of section 15 B.5 says "The General Contractor
shall receive the equipment, store safely, etc.", I
cannot think that the term "General Contractor"
means anyone other than the Building General
Contractor with whom "all scheduling of installa
tion" is to be co-ordinated. The final "clincher" is
found in paragraph .3 of section 15 C.5, which
corresponds, with respect to reach-in growth
chambers, with what paragraph .3 of section 15
B.5 says with respect to walk-in growth chambers.
Paragraph .3 of section 15 C.5 is in the same
words as paragraph .3 of section 15 B.5 with the
significant difference that instead of directing the
Contractor (plaintiff) to co-ordinate scheduling of
installation with the Building General Contractor
it directs such scheduling to be co-ordinated with
the General Contractor. As the two paragraphs
are concerned with precisely the same duty of the
Contractor it is clear that the terms "Building
General Contractor" and "General Contractor"
have the same meaning. There is no basis for
thinking otherwise.
The only place throughout all the contract docu
ments in which the term "Building General Con-
tractor" is found is in paragraph .3 of section 15
B.5 of the specifications (supra). The term "Gen-
eral Contractor" is found in three places in addi
tion to the three mentioned supra, viz. in subsec
tions .20 and .21 of section 1 A of the
specifications, which section sets out the general
requirements of the contract, and in subsection .17
of section 15 A of the specifications, which section
contains the general clauses and conditions appli
cable to the mechanical work of the contract
specifications.
Subsection .20 of section 1 A begins:
The General Contractor shall provide and maintain access and
operating space for the erection equipment of any contractor.
Surely, in this context, the words "General Con
tractor" must mean the Building General Contrac
tor and the words "any contractor" must refer to
contractors like the plaintiff. This conclusion is
made more certain by subsection .21, which, in
two paragraphs, directs that the contractor (plain-
tiff) shall:
.1 Co-ordinate the work of this- specification with the construc
tion of the Growth Building.
.2 Provide two (2) weeks advance notification of all deliveries
to the building site to the General Contractor for the building.
Finally, paragraph .2 of subsection .17 of section
15 A directs the contractor, in its first sentence to:
.2 Arrange with the General Contractor all sleeves and opening
sizes and location and make provision, if necessary, so as to
ensure such are suitable for all equipment.
Here again it is obvious that the term "General
Contractor" means the General Contractor for the
building. Thus, in my opinion, in all six places in
the contract in which the term "General Contrac
tor" is used, it clearly means the General Contrac
tor for the building, and not the plaintiff.
Counsel for the defendant submitted that in
sections 15 B.5.7 and 15 C.5.7 the words "General
Contractor" should, or at least could, be interpret
ed as meaning the plaintiff. As indicated above I
do not agree that such an interpretation would be
in any way logical. However, counsel cited several
paragraphs in the specifications in support of his
submission and I deem it desirable to consider
them.
1. Subsections .1, .2 and .3 of section 1 A.10 of
the specifications. This section is found among the
general requirements of the contract specifications.
The subsections require the contractor (plaintiff)
to:
.1 Deliver, store and maintain packaged materials
with manufacturer's seals and labels intact.
.2 Prevent damage, adulteration and soiling of
materials during delivery, handling and storage.
Immediately remove rejected materials from site.
.3 Store materials in accordance with suppliers'
instructions.
To begin with there are a few observations that
should be made with respect to these subsections.
Subsection .1 refers only to packaged materials
purchased from or supplied by manufacturers.
From other provisions of the contract it is clear
that the requirement that the manufacturer's seals
and labels be kept intact is designed to ensure that
the engineer or other owner's representative can
determine that the packaged items have been
made by competent reliable manufacturers. The
only relevance subsection .2's requirement to
"immediately remove rejected materials from site"
has to the issue of who is meant by the term
"General Contractor" is that it is the only place in
section 1 A.10 where the site is specifically
referred to. In subsection .3 it is obvious that the
word "suppliers" refers to the manufacturers.
It must be remembered that these subsections
are general requirements of the contract. If there
is a conflict between what is provided in them and
the subsequent specific provisions in sections 15
B.5.7 and 15 C.5.7 the specific provisions must
prevail. It may be that sections 15 B.5.7 and 15
C.5.7 are intended to be read together with subsec
tions .1, .2 and .3 of section 1 A.10 as meaning
that for the period between the delivery of ma
terials to the site and their use in erecting and
installation of the growth chambers, the obliga
tions imposed on the plaintiff by the said subsec
tions to keep the manufacturer's seals and labels
intact, to store the materials in accordance with
the manufacturer's instructions and to prevent
damage, adulteration and soiling thereof, are
transferred to the General Contractor. As the
building contract between Her Majesty and Poole
Construction Company Limited is not before the
Court on this motion we do not know whether that
contract contains any provision to the same effect.
2. Section 15 A.9.6.
Section 15 A.9 contains seven paragraphs of
general clauses setting out the liability of the
contractor (plaintiff) in connection with the
mechanical work of the contract. Subsection .6
reads:
.6 Assume responsibility for the condition of all material and
equipment supplied under this section and provide all necessary
protection for same.
What I have said with respect to subsections .1,
.2 and .3 of section 1 A.10 applies equally to this
subsection.
3. Section 15 A.20.
This is another section of the general clauses
concerning the mechanical work of the contract.
Subsection .1 reads, in part:
.1 Protect all equipment during and after installations ....
This subsection relates to the period "during and
after installation". Sections 15 B.5.7 and 15 C.5.7
relate to the period prior to installation. This
subsection .1 of section 15 A.20 has no relevance
to the question we are concerned with.
4. Subsection .5 of Section 15 A.25.
Counsel gave considerable emphasis to this sub
section, which reads:
.5 Where there are two or more interpretations that can be
taken from the specifications or the drawings in regard to
materials, equipment or layout and clarification is not obtained
from the Engineer, then this Contractor shall consider the most
costly of the alternatives to apply in his tender and no allow
ances will be made or considered if his estimate and tender
have been based on the lesser.
In my view it can be argued that this subsection
applies only to what is said in the specifications
and portrayed in the drawings about what ma
terials and equipment are to be used and what the
layout shall be, and does not apply to services like
the movement or storage of materials and equip
ment. Even if this argument is not entitled to
succeed, the subsection cannot be held to defeat
the plaintiff's claim, because in my opinion there is
only one meaning that can logically be accorded to
the term "General Contractor" as that term is
used in sections 15 B.5.7 and 15 C.5.7 of the
specifications, i.e.: that it means the General Con
tractor that is to construct the growth building
under the first contract, viz. Poole Construction
Company Limited. Therefore the subsection is not
applicable to the question before the Court on this
motion.
The plaintiff is entitled to a declaratory judg
ment that it is entitled to compensation from the
defendant, pursuant to sections 15 B.5.7 and 15
C.5.7 of the specifications forming part of the
agreement between the parties, for the costs and
expenses incurred by the plaintiff by reason of the
refusal of Poole Construction Company Limited to
receive at the site the plant growth chambers,
together with incidental equipment and materials,
to store the same safely and to move crates con
taining the same to final location, all of which
were to be done by Poole Construction Company
Limited, without charge to the plaintiff. The plain
tiff relied on the said sections 15 B.5.7 and 15
C.5.7 in making its tender. As Poole Construction
Company Limited is not a party to the contract
between the plaintiff and the defendant, the plain
tiff cannot compel that company to compensate it
for the costs and expenses in question. The defend
ant has not required the company to compensate
the plaintiff for the costs in question. There may
be no provision in the contract between Her
Majesty and the company that obligates the com
pany to do the things, the failure of the company
to do which has occasioned the costs and expenses
for which the plaintiff is seeking compensation. Be
that as it may, the plaintiff, having been forced to
do itself the things which the company was to do
pursuant to sections 15 B.5.7 and 15 C.5.7 of the
plaintiff's contract with Her Majesty and by so
doing having incurred costs and expenses in per
forming that contract which by the contract should
have been borne by the company, and having no
redress against the company, is entitled to be
compensated by Her Majesty for those costs and
expenses.
The amount of the costs and expenses cannot be
dealt with on this motion. There will therefore be
an order directing an issue between the parties to
determine the amount of compensation to be paid
by the defendant to the plaintiff.
The plaintiff is entitled to the costs of this
motion.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.