



COURT OF APPEAL FOR ONTARIO

CITATION: Bruell Contracting Limited v. J. & P. Leveque
    Bros. Haulage Limited, 2015 ONCA 273

DATE: 20150421

DOCKET: C57554

Feldman, Watt, and van Rensburg JJ.A.

BETWEEN

Bruell Contracting Limited

Respondent (Plaintiff)

and

J. & P. Leveque Bros. Haulage Limited and
Her Majesty the Queen in Right of Ontario, as represented by
    the Ministry of Transportation Ontario


Appellants (Defendants)

AND BETWEEN

J. & P. Leveque Bros. Haulage Limited

Respondent (Plaintiff)

and

Her Majesty the Queen in
    Right of Ontario
, Earth Tech Canada Inc. now doing business under the
    name of AECOM Canada Ltd., Bruell Contracting Limited and McAsphalt Industries
    Limited

Appellant (Defendants)

Ronald Carr and Fatema Dada, for the appellant

Jeffrey S. Percival, for AECOM Canada Ltd.

Charles Loopstra and Daron L. Earthy, for Bruell
    Contracting Limited

Tom Corbett and Marcia Oliver, for J. & P. Leveque
    Bros. Haulage Limited

Heard: June 17, 2014

On appeal from the judgment of Justice David J. Nadeau of
    the Superior Court of Justice, dated July 25, 2013, with reasons reported at
    2013 ONSC 1985 and additional reasons reported at 2013 ONSC 6676.

Feldman J.A.:

Overview

[1]

This action arose out of a road surfacing contract between the Ontario Ministry
    of Transportation (MTO) and the contractor, J. & P. Leveque Bros. Haulage
    Limited (Leveque). The contract was administered by the MTO and by Earth Tech
    Canada Inc., now AECOM Canada Ltd. (AECOM). AECOM was also the Highway
    Designer.

[2]

Between September 24, 2007 and October 1, 2007, Leveque and a
    sub-contractor, Bruell Contracting Limited (Bruell), constructed a double
    lift surface treatment on Hwy. 575 near Verner, Ontario. Shortly after
    completion, the surface treatment began to show signs of failure. The MTO
    required Leveque to remove the initial surface and reapply it, then refused to
    pay for that work.

[3]

The two liability issues at trial were (i) who bore responsibility under
    the terms of the contract in the event of a performance failure, and (ii) what
    caused the surface treatment to fail. The MTO alleged that Leveque was
    responsible because, although Leveque used materials specified in the contract,
    it did not test the compatibility of the specific products it sourced. The
    MTOs position was that the resulting incompatibility of the materials caused
    the failure.

[4]

The trial judge found that the contract was a method specification
    contract, under which the contractor was not responsible for performance
    failure provided it followed the contract specifications, which in this case Leveque
    did. He also found that the primary causes of the failure were high binder
    application rates prescribed by the MTO, weather, and the heavy truck traffic that
    MTO allowed on the road before the surface had fully cured. The incompatibility
    of the resurfacing materials used was at most a contributing factor. The trial
    judge rejected the opinion evidence of the MTOs expert witness, in part
    because he found improper conduct by counsel who instructed the expert and
    obtained his report. The trial judge also found that MTO personnel had acted
    improperly in a number of ways in their dealings with Leveque in regards to the
    remediation of the problem. The trial judge awarded full indemnity costs to
    Leveque because of his findings of misconduct by MTO personnel, including MTO counsel.
    He awarded mixed partial and substantial indemnity costs to Bruell. He also
    made the MTO responsible for AECOMs costs on a partial indemnity basis through
    a
Sanderson
order.

[5]

The MTO appeals the trial judges interpretation of the contract, his
    findings regarding the cause of the failure of the surface treatment, his
    findings of misconduct by the expert witness and counsel, and the costs awards.

Facts

[6]

Under Contract 2007-5182, awarded by the MTO to Leveque on June 19, 2007,
    Leveque and its subcontractor Bruell constructed a double lift surface
    treatment on 17.9 kilometres of highway in northern Ontario. The surface treatment
    was applied from September 24, 2007 to October 1, 2007. By October 10, 2007,
    there were visible signs of deterioration. When Bruell observed these problems,
    it ordered sanding of the highway surface in order to minimize damage, but the
    MTO directed that the sanding be discontinued.

[7]

Through a work directive, the MTO required Leveque to remove the surface
    treatment, which it did on November 18, 2007. Leveque completed the
    reapplication of the surface treatment in June 2008 under protest. The MTO
    refused to pay for the costs of the removal of the initial installation and for
    the second surface treatment, resulting in the action under appeal.

[8]

The contract documents are extensive. The parties called expert evidence
    on the issue of the characterization of the contract to assist the trial judge
    in interpreting the contractual terms with which the experts had familiarity.
    Leveques position was that the contract is a method specification contract,
    where the owner specifies every aspect of the project and the contractor
    performs exactly as specified. The MTO position was that the contract is a
    mixed specification contract with many performance elements, which
    allocated responsibility for the means and methods of the project and for quality
    control to the contractor.

[9]

The MTO relied on the General Warranty provision GC 7.17, which provides:

GC 7.17           General Warranty

.01   Unless
    otherwise specified in the Contract for certain materials or components of the Work,
    the contractor shall be responsible for the proper performance of the work only
    to the extent that the design and specifications permit such performance.

.02   Subject to
    the previous paragraph, the Contractor shall correct promptly at no cost to the
    Owner defects or deficiencies in the Work which appear prior to and during the
    period of (12) twelve months after the date of completion of the Work set out
    in the Completion Certificate or such longer periods as may be specified for
    certain materials or components of the Work.

[10]

The
    MTO also referred to GC 7.01.03, Control and Responsibility, which stipulates:

GC 7.01.03      Control and
    Responsibility

.01   The
    Contractor shall have complete control of the Work and shall effectively direct
    and supervise the work so as to ensure conformity with the Contract Documents.
    The Contractor shall be responsible for construction means, methods,
    techniques, sequences and procedures and for coordinating the various parts of
    the Work.

.02   The
    Contractor shall have the sole responsibility for the design, erection,
    operation, maintenance and removal of temporary structures and other temporary
    facilities and the design and execution of construction methods required and
    their use.

.03   Notwithstanding
    paragraph 02) of clause GC 7.01.03, Control and Responsibility, where the
    Contract Documents include designs for temporary structures and other temporary
    facilities or specify a method of construction in whole or part, such
    facilities and methods shall be considered to be part of the design of the
    Work, and the Contractor shall not be held responsible for that part of the
    design or the specified method of construction. The Contractor shall, however,
    be responsible for the execution of such design or specified method of
    construction in the same manner that the Contractor is responsible for the
    execution of the Work.

[11]

As
    explained at trial, surface treatments are applied in layers of binder and
    aggregate, which are then rolled in order to bond the emulsion and the
    aggregate together. The contract provided that the surface treatment would
    consist of spraying the highway surface with a binder or liquid asphaltic
    emulsion, specified as HF-150S, which was suited for late-season application,
    in combination with Class II aggregate.

[12]

The
    MTOs position was that the failure of the highway surface was caused by the
    incompatibility of the specific Class II aggregate that was chosen by Leveque
    and the specified binder. There was no compatibility test required under the
    contract. However, the MTO submitted that there was an implied term in the
    contract that the aggregate selected would be compatible with the binder.
    Therefore, Leveque was obliged to conduct testing on the products to ensure
    their compatibility, and their suitability for the purpose of the project, before
    using them. Because Leveque did not undertake any compatibility testing, the MTOs
    position was that Leveque was responsible for the failure under the General Warranty
    provision.

[13]

Subsequent
    testing showed that the binder and the chosen aggregate required the addition
    of an anti-stripping additive in order to be compatible. Leveque pointed to
    evidence that such additives were not approved by the MTO. In any event, the
    chosen aggregate and the binder were tested by the MTO and passed all the tests
    required by the contract specifications.

[14]

Leveques
    position was that the early deterioration of the surface was caused by
    excessive application of the binder, as directed by the MTO; by wet and cool
    weather conditions, which extended the curing period of the surface; and by
    heavy truck traffic that the MTO allowed on the highway before the surface was
    cured, which led to the creation of potholes and deterioration.  Leveque
    submitted that the damage was exacerbated by the MTOs cancellation of the
    sanding ordered by Bruell and its refusal to impose a load restriction
    following the initial signs of deterioration.

The Trial Judges Reasons

(1)

Interpretation of the contract

[15]

The
    trial judge first addressed the issue of the proper interpretation of the
    contract. The MTO called expert evidence from Dr. Maher of Golder Associates Ltd.
    (Golder), whose expertise included all aspects of surface treatment projects
    including contract preparation. His evidence was that, although the MTO
    conducted quality assurance on the aggregate and the binder, it was the
    contractors responsibility to deliver a surface that met the performance
    requirements under the 12-month warranty provision. He also testified that
    there had been increased downloading of such responsibility on contractors in
    circumstances where they choose the aggregate themselves.

[16]

The
    respondent Leveque called evidence from David Peshkin, who was qualified as an
    expert in all aspects of road surfacing and on surface treatment contract
    document preparation. Mr. Peshkins opinion was that the contract was a method
    specification contract. His analysis was summarized in Leveques written
    closing argument, at para. 26, which the trial judge explicitly endorsed. That
    summary is not included in the trial judges reasons, but portions of it were
    provided to this court as part of the record.

[17]

Essentially,
    Mr. Peshkin explained that the difference between the two types of contracts is
    that the risk under a method specification contract is with the owner, whereas the
    risk is transferred to the contractor under a performance specification
    contract. The price of the latter contract will therefore be higher. Under the
    Leveque contract, the working variables, including the specified tools,
    emulsion, aggregate, equipment and instructions for surface preparation, were
    controlled by the MTO and AECOM. As Mr. Peshkin explained, this degree of
    control by the owner was inconsistent with a performance specification contract:
    an owner cannot retain control and at the same time hold the contractor
    responsible for performance  the two are mutually exclusive.

[18]

Mr.
    Peshkin compared this contract to other MTO road contracts. He concluded that,
    unlike other contracts, this one had no explicit surface treatment design
    requirement nor did it have a specific warranty or a requirement for
    compatibility testing, all of which would indicate that the contractor was responsible
    for performance. Similarly, the inspection tasks AECOM followed were consistent
    with a method specification contract rather than a performance contract.

[19]

Mr.
    Peshkin observed that the contract contained no explicit performance criteria
    to evaluate post-placement performance, unlike other performance contracts. Further,
    payment was based on the quantity of materials used, indicating that payment
    would be made upon compliance with the specifications. Finally, Mr. Peshkin highlighted
    other MTO contracts entered into in the same time period that incorporated
    performance specifications that were absent from the Leveque contract.

[20]

On
    the issue of the interpretation of the contract, the trial judge accepted what
    he characterized as the thoughtful, detailed and compelling analysis of Mr.
    Peshkin. The trial judge concluded that the warranty made the contractor
    responsible for proper performance only to the extent permitted by the design
    and the specifications.

(2)

Cause of the surface treatment failure

[21]

Having
    found that the contract allocated the risk of performance failure to the MTO,
    the trial judge went on to decide the issue of causation. Evidence adduced on
    this issue consumed much of the trial.

[22]

The
    trial judge began by discounting the expert opinion of Dr. Maher. Dr. Maher
    testified that the primary cause of the deterioration of the highway surface
    was the poor compatibility of the binder and the Class II aggregate that Leveque
    had sourced from the Beauparlant Quarry. The trial judge found that Dr. Mahers
    expert opinion was not very helpful for three reasons. First, counsel for the
    MTO was extremely influential in instructing Golder Associates pursuant to their
    retainer agreement and had tainted the fairness and independence of Golders
    opinion. Second, from his observation of Dr. Maher during his
    cross-examination, and perhaps due to such MTO manipulation, the trial judge
    was concerned that Dr. Maher was committed to advancing the MTOs theory of the
    case and had assumed the role of advocate. Third, the factual underpinnings of
    Dr. Mahers opinion were inconsistent with some of the facts that were proven
    at trial.

[23]

The
    trial judge concluded that he was attaching very little weight to most of Dr.
    Mahers opinions as a result of his instructing and manipulating client,
    preferring the thoughtful, independent, fair, objective and non-partisan
    expert opinion evidence presented by David Peshkin.

[24]

The
    trial judge then made the following findings on the issue of causation: 1) the
    incompatibility of the binder and the aggregate may have been a contributing cause
    of the deterioration, but was not a primary factor; 2) the MTOs decision to opt
    for surface treatment rather than the previously approved hot mix design, and
    its redesign of the project to a double surface treatment without external design
    or engineering input, demonstrated intentional risk-taking, unwise decisions,
    and a refusal to implement self-help options; 3) after the award to Leveque, the
    MTO created delay and was uncooperative despite the fact that the late-season
    application of surface treatment was known not to be optimal; 4) the specified binder
    application rates were too high given the cool late season temperatures and the
    heavy traffic allowed by the MTO on the highway, resulting in slow curing and bleeding/flushing;
    5) heavy truck traffic on or around October 10, 2007 caused or accelerated the
    deterioration of the treatment; 6) rain was another accelerating factor; 7) all
    of this led to the picking of the roadway; 8) because of the failure to sand
    and stop the traffic, the picking led to potholing and further deterioration.

(3)

Compliance with the contract

[25]

The
    trial judge also addressed the opinion expressed in the Golder report that
    there was an industry practice for contractors to conduct compatibility testing
    on prescribed materials before using them. Although that was the case in 2012, Dr.
    Maher acknowledged in cross-examination that he did not know whether it was standard
    practice in 2007. The trial judge found that [t]here was certainly no proven
    industry practice in September 2007 requiring contractors to conduct
    aggregate-binder compatibility testing. He concluded that in fact, Leveque
    would not have been permitted under the contract to carry out such testing and
    unilaterally add an anti-stripping agent. He also commented that the MTOs
    demonstrated attitude would likely have resulted in it denying any request by
    Leveque to add such an additive.

[26]

The
    trial judge concluded that throughout the project, the MTO had acted as if
    Leveque carried all of the risk, and therefore the MTO would bear no
    responsibility for the directions and decisions it took, when in fact, the
    opposite was true. The trial judge found that Leveque and Bruell met all
    specifications under the contract, and that any warranty by Leveque did not
    apply due to the contributory fault of the MTO  particularly in causing delay,
    specifying excessive binder application rates, failing to manage heavy truck
    traffic and refusing to permit sanding when the bleeding and flushing occurred.
    Finally, the trial judge found that Leveque and Bruell performed their work in
    a good and workmanlike manner and supplied materials that were fit for the
    purpose in accordance with the contractually prescribed requirements.

(4)

Misconduct by the MTO

[27]

The
    trial judge considered awarding punitive damages against the MTO because of its
    conduct, but ultimately declined, finding no separate actionable wrong  though
    he made reference to various misconduct by the MTO including patently
    inaccurate and false meeting minutes and material non-disclosure.

[28]

However,
    he did order full indemnity costs to Leveque. In separate reasons, the trial
    judge again impugned the conduct of both trial counsel in the litigation, and
    the MTO in its dealings with Leveque in remedying the problem. He found that
    the latter type of misconduct had been proven at trial, although he had not
    referred to it in the reasons for judgment. In his costs decision, he mentioned
     but did not explain  a cancelled Change Order, an improper press release and
    various threats of infractions, among others. Ultimately, the trial judge found
    the overall conduct of the MTO to be in bad faith, describing it as
    unconscionable, egregious and reprehensible. In those circumstances, he
    imposed what he acknowledged was a rare order of full indemnity costs in favour
    of Leveque.

[29]

He
    also made a
Sanderson
order that the MTO, rather than Leveque, pay the
    costs of AECOM. He ordered the MTO to pay Bruells costs on a mixed partial and
    substantial indemnity scale, with the substantial indemnity scale commencing on
    the date of Bruells offer to settle that was rejected by the MTO.

Issues

[30]

This
    appeal raises the following issues:

1)

Did the trial judge make a reversible error in the interpretation of the
    contract between MTO and Leveque?

2)

Did the trial judge err in his finding that Dr. Mahers evidence was
    tainted by undue influence, and in his findings regarding the cause of the surface
    treatment failure?

3)

In the alternative, should Leveque have been required to contribute to
    the cost of the remediation?

4)

Did the trial judge err in his findings of litigation misconduct?

5)

If so, does the error affect the costs award? And were the costs awards excessive
    and unreasonable?

Analysis

(1)

Issue 1: Did the trial judge err in his interpretation of the contract
    and in finding that the warranty given by Leveque did not apply?

[31]

The
    appellant submits that the trial judge erred in finding that the contract is a
    method specification contract and that the warranty for performance of the work
    therefore did not apply. In particular, the appellant argues that the trial
    judge erred in his interpretation of the words or specify a method of
    construction in whole or in part in GC 7.01.03.03 and of the contractors
    responsibility for construction, means, methods, techniques, sequences and
    procedures in GC 7.01.03.01.

[32]

In
    its recent decision in
Sattva Capital Corp. v. Creston Moly Corp.
,
    2014 SCC 53, [2014] 2 S.C.R. 633,

the Supreme Court reconsidered the
    historical approach of treating contractual interpretation as a pure question
    of law. Rothstein J., speaking for the court, articulated the new governing
    approach as follows, at para. 50:

Contractual interpretation involves issues of mixed fact and
    law as it is an exercise in which the principles of contractual interpretation
    are applied to the words of the written contract, considered in light of the
    factual matrix.

[33]

As
    such, deference is owed to the trial judge on questions of contractual
    interpretation, subject to extricable legal errors including the application
    of an incorrect principle, the failure to consider a required element of a
    legal test, or the failure to consider a relevant factor:
Sattva
, at para.
    53, citing
King v. Operating Engineers Training Institute of Manitoba Inc.
,
    2011 MBCA 80, 341 D.L.R. (4th) 520, at para. 21.

[34]

In
    this case, expert evidence was called to assist the court in interpreting the
    contract. The expert evidence effectively formed part of the factual matrix, as
    it was proffered to educate the court about the types of contracts that exist
    in the road construction industry. Of course, the trial judge was not bound to
    accept the expert evidence. It was his task to interpret the contract  in
    particular, the obligations of the contractor and the scope of the warranty.

[35]

The
    trial judge reviewed the contractual language and considered the explanations
    of the expert witnesses regarding the operation of a method specification contract
    as compared to a performance contract in the context of highway construction
    and resurfacing. He concluded that the contract between the MTO and Leveque was
    a method specification contract.

[36]

The
    trial judge clearly preferred the evidence of the respondents expert, Mr.
    Peshkin, over the evidence of the appellants expert, Dr. Maher, and gave
    several reasons for this preference. He believed that Dr. Maher was influenced
    by counsel for the MTO. I will say more about whether counsel acted improperly
    later in these reasons. However, it was also the trial judges impression from
    the way Dr. Maher gave his evidence that he treated his role as an expert as
    that of an advocate for the MTO.

[37]

Further,
    the trial judge rejected Dr. Mahers evidence because certain facts proven at
    trial did not support the conclusions in his expert report, for example,  the
    condition of a parking lot surfaced by Leveque at the same time as the highway.
    In addition, the trial judge rejected Dr. Mahers description of the damage as
    a catastrophic failure over the full length and width of the placement, as
    the photographic evidence did not support such an expressive opinion.

[38]

The
    trial judge also focused on the reports conclusion that there was an industry
    practice for contractors to test materials for compatibility. As discussed
    above, when confronted in cross-examination, Dr. Maher acknowledged that although
    that practice existed in 2012 when he wrote the report, he did not know whether
    it existed in 2007, the relevant time when this contract was being performed.

[39]

The
    trial judge was entitled to accept the expert evidence that he did on the
    characterization of the contract. I see no extricable error in his approach to
    the interpretation of the contract, or in his conclusion that the contract
    specified everything the contractor was to do. There was no basis to imply a
    term other than those explicitly provided. In fact, to imply a requirement for
    compatibility testing, or a requirement that the contractor ensure
    suitability, could have contradicted what was specified in the contract.

[40]

I
    therefore see no basis to interfere with the conclusion of the trial judge that
    the warranty provided by the contractor did not oblige it to conduct
    compatibility testing on the specified aggregate and the specified binder or to
    assume responsibility for any failure that was caused or contributed to by any
    incompatibility between those two materials, provided the specified materials
    and specified procedures for their application were used. As the respondents
    did use the specified materials and applied them in accordance with the
    contract specifications, the responsibility for any failure rested with the
    owner.

(2)

Issue 2: Did the trial judge err in his conclusion regarding the cause
    of the failure of the surface and in rejecting the evidence of Dr. Maher?

[41]

It
    was conceded that if the trial judge made no error in his interpretation of the
    contract or in his finding that the respondent Leveque was not liable under the
    warranty, it becomes unnecessary to decide the cause of the failure.

(3)

Issue 3: Is Leveque required to contribute to the cost of the
    remediation?

[42]

Similarly,
    the argument that Leveque should be held partially responsible for the failure
    of the surface treatment was premised on reversing the finding that the
    contract is a method specification contract. Again, in light of my conclusion
    on the first issue, it is not necessary to address this question.

(4)

Issue 4: Did the trial judge err in his findings of litigation
    misconduct?

[43]

The
    trial judge was highly critical of two aspects of the conduct of the MTO. One
    criticism involved the conduct of MTO personnel who dealt with Leveque in the
    supervision of the remedying of the surface treatment failure. The other was
    the trial judges disparaging view of the conduct of trial counsel, Mr.
    Weilenmann, in his dealings with the expert witness, Dr. Maher, and in relation
    to disclosure.

[44]

The
    trial judge did not have the benefit of this courts recent decision in
Moore
    v. Getahun
,
2015 ONCA 55, where
    the court discussed counsels proper role in instructing and preparing expert
    witnesses, as well as the question of whether draft expert reports and
    correspondence between counsel and expert witnesses must be disclosed. Counsel
    for the appellant sought, and all counsel were granted the opportunity to provide
    further written submissions to this court following the release of that
    decision while this appeal was under reserve.

[45]

The
    trial judges findings on improper influence in his reasons for judgment were
    repeated at paras. 17 and 18 of his reasons for costs:

In my Reasons for Judgment, I specifically addressed my finding
    from
the
trial that there is convincing evidence that
    Mr. Weilenmann was pivotal in
the
development of MTO
    defence strategies including being extremely influential in instructing Golder
    Associates pursuant to their Retainer Agreement.  Exhibit 37 is but one
    striking example. Exhibits 30, 34, 35, 36, 38, 40, 41 and 42 display much of
the
same. For all of
the
reasons
    submitted in paragraph 92(c) (i) to (vi) of
the

Leveque
Closing Argument, such MTO influence and suppression
    has definitely tainted any fair, objective and non-partisan opinion
    ultimately presented by Golder Associates.

I have determined, as a result of what I had witnessed during
    this trial, that MTO was quite improperly instructing and manipulating their
    supposedly fair, objective and non-partisan expert opinion as presented to
    this Court.

[46]

The
    exhibits referred to came from Golders litigation file, which was produced on request
    during the trial. The appellant now submits, based on
Moore
, that this
    file was privileged and need not have been produced. The respondents argue that
    the file was produced voluntarily without a court order and that any privilege
    was thereby waived. They submit that there is therefore no decision for this
    court to review.

[47]

In
    my view, the pertinent issue before this court is not whether the appellant can
    now claim privilege over the file, but whether the trial judge unfairly
    impugned the conduct of trial counsel.

[48]

In
Moore
, this court made clear that it is not only appropriate but
essential
for counsel to consult and
    collaborate with expert witnesses in the preparation of expert reports. Counsel
    must explain to experts their duties to the court, clarify the relevant legal
    issues, and assist experts in framing their reports in a way that is
    comprehensible and responsive to the pertinent legal issues in a case:
Moore
at para. 62. Normally, communications between counsel and the expert, as well
    as draft reports, will be subject to litigation privilege. Only if there is
    reasonable suspicion that counsel has improperly influenced the expert may
    production of notes and drafts be ordered.

[49]

In
    this case, the file was produced on request during trial. Though there may have
    been some uncertainty in the law regarding the scope of litigation privilege,
    this does not in itself call for appellate intervention to address what was
    essentially a voluntary disclosure. As I stated, at this point the issue is
    whether the impugned communications from counsel warrant the severe criticism
    levelled by the trial judge.

[50]

The
    trial judge referred to a number of exhibits that he viewed as examples of Mr.
    Weilenmann being extremely influential in instructing Golder. Exhibit 37 was described
    as a striking example. That exhibit is an email from Mr. Weilenmann to Dr.
    Uzarowski, another expert at Golder, dated August 12, 2010. It includes other
    emails from the MTO that deal with traffic volumes regarding the hauling of
    sand over the project. Mr. Weilenmann tells Dr. Uzarowski that he thought Golders
    experts should be aware of that information, that they may already have it,
    that they may or may not include it in their report, and that regardless they
    may be asked about it at trial.

[51]

This
    is clearly the type of input from counsel to an expert preparing a report that
    is contemplated in
Moore
as being appropriate. Counsel does not
    instruct the experts as to what conclusions they should draw from the
    information. Counsel leaves it to them to decide whether to include it in the
    report, but notes that it could be an issue at trial.

[52]

Exhibit
    41 is another impugned email from Mr. Weilenmann to Dr. Uzarowski. It refers to
    the fact that Mr. Weilenmann had circulated the draft report to MTO staff for
    comments. He notes that the comments, which he attached to the email, mainly
    involved typos. However, one suggestion, which he repeated, was to delete a
    quote from Irys Steblynsky, an MTO employee, who did not consider herself an
    expert on the subject matter of the quote. This email chain also included
    diaries of weather conditions for relevant times, which Mr. Weilenmann wrote
    will not change your opinion about the weather, only improve the data.

[53]

The
    trial judge appears to have been persuaded by, and to have accepted, the
    cogency of certain paragraphs of Leveques written closing argument that
    suggested that Mr. Weilenmanns conduct was improper. The portion of the Leveque
    closing argument that the trial judge referred to was provided on appeal,
    although it is not quoted by the trial judge. In relation to the weather
    diaries in Exhibit 41, Leveque argued in its closing submissions that MTOs
    influence on Golder was demonstrated by the suggestion that further
    information provided about weather will not change your opinion about the
    weather. Leveque seems to be suggesting that Mr. Weilenmann was effectively
    telling Golder not to change its opinion. However, in my view, a fair reading
    is that Mr. Weilenmann, having read the data, believed it would not change the
    experts opinion, but rather would provide further support for it. Similarly, counsels
    instruction to remove the quote by Irys Steblynsky from the report on the
    grounds that she was not an expert, which Leveque characterized in its closing argument
    as the deletion of quotes of Irys, appears to have been an exercise of
    judgment by counsel regarding the reliability of the report, not a deliberate
    suppression of information. I see no attempt by counsel to influence the
    experts.

[54]

The
    other email exhibits that the trial judge refers to are equally innocuous. In Exhibit
    34, another impugned email, Golder is told by Mr. Weilenmann: You are not
    permitted to contact Miller [Paving] directly to find out more information, as
    this is inappropriate in the circumstances of this litigation. Miller Paving was
    a subsidiary of another company that had been a party to the litigation at one
    stage, which the appellant argues is why it was considered inappropriate to
    contact them directly. In its written argument, Leveque cites this instruction as
    an example of Mr. Weilenmann trying to exert improper influence over Golder,
    describing it as the Weilenmann directive that Golder is not to speak to their
    client Miller Paving during their investigations. This submission suggests
    something nefarious which is not borne out by the email. In fact, the expressed
    concern regarding propriety demonstrates that Mr. Weilenmann was aware of his
    ethical obligations and was attempting to abide by them.

[55]

In
    my view, there was no factual basis for the allegations by Leveque of
    impropriety by Mr. Weilenmann in his instructions and dealings with Golder in
    the preparation of the expert report. The trial judge was unimpressed with Dr.
    Maher for other reasons, having heard his testimony and observed him under
    cross-examination. The trial judge was also concerned about the attitude
    displayed by MTO staff in their dealings with Leveque throughout. However, the
    extension of his criticisms of Dr. Maher and other MTO staff to the conduct of
    trial counsel in his dealings with the experts does not withstand scrutiny.
    Counsels reputation for integrity is a precious commodity, not to be impugned
    without a clear, substantiated basis. In my view, the evidence in the record
    that the trial judge relied on is benign and is no basis to impugn trial
    counsel.

[56]

I
    note that the trial judge was also critical of the MTO for non-disclosure and
    suppression of evidence, as well as the patently inaccurate and false
    meeting minutes. He did not specify the non-disclosure that he was referring
    to or who was responsible for it. On appeal, the respondent advised that the
    trial judge was referring to non-disclosure of information regarding heavy traffic
    loads carried over the surface treatment on October 10 and 11, 2007, although
    Leveque became aware of this information before trial. Although the trial judge
    impugns the conduct of the MTO in respect of non-disclosure, without clear
    findings, the trial judges reasons are not sufficient to permit this court to
    address any issue pertaining to non-disclosure. With regard to the false
    meeting minutes, this misconduct was not attributed to trial counsel and this
    court has not been asked to revisit the trial judges findings on this issue.

(5)

Issue 5: Costs

[57]

The
    awarding of costs is a discretionary matter that attracts considerable
    deference on appeal, unless the trial judge makes an error in principle or the
    costs award is plainly wrong:
Hamilton v. Open Window Bakery Ltd.
,
    2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27.

[58]

MTO
    objects to the quantum of costs awarded to Leveque and Bruell as being
    unreasonable, submits that a number of offers to settle made by the MTO were
    not considered, and argues that the trial judge erred in awarding the
Sanderson
order which rendered the MTO responsible for AECOMs costs, the quantum of
    which is not disputed.

[59]

The
    trial judge was clearly very concerned about the conduct of the MTO throughout,
    and was satisfied that the award of costs should adequately reflect his
    concerns and disapproval. Although the amounts awarded are very high, I see no
    basis in law or principle to interfere with the orders made on these grounds.

[60]

However,
    one ground of appeal merits intervention. The trial judge ordered full
    indemnity costs against the MTO in favour of Leveque on the basis that MTOs
    misconduct was unconscionable, egregious and reprehensible and constituted
    bad faith. Because part of the misconduct that influenced the trial judges
    full indemnity costs award was the alleged misconduct attributed to trial
    counsel, a finding which has been set aside on appeal, the award of costs at
    the full indemnity level no longer rests fully on findings supported by the
    record. Based on that error, I would grant leave to appeal costs and reduce the
    quantum of costs payable to Leveque by 20% to reflect an award of substantial
    indemnity costs, rather than full indemnity.

Conclusion

[61]

I
    would dismiss the appeal, grant leave to appeal costs, allow the appeal against
    costs by reducing the amount of costs payable to Leveque by 20%, and otherwise
    dismiss the appeal against costs. I would order the costs of the appeal to the
    respondents fixed at $20,000 for Leveque and $15,000 for Bruell inclusive of
    disbursements and HST.

Released: KF APR 21, 2015

K.
    Feldman J.A.

I
    agree. David Watt J.A.

I
    agree. K. van Rensburg J.A.


