Federal Court


Plaintiff had responsibility to understand full scope of project

Plaintiff brought action for alleged illegal improper termination of contact. Plaintiff was hired to perform hazardous material abatement and demolition work on decommissioned heating plant building located on Department of National Defence base. Public Works & Government Services Canada (“PWGSC”) was contracting authority and manager of project. Plaintiff was to perform work from December 17, 2001 to September 23, 2002. On August 9, 2002, PWGSC advised plaintiff that work completed to date was unsatisfactory and it issued written notice that it would take steps to take work out of plaintiff’s hands in six days pursuant to contract. PWGSC formally terminated contract on September 5, 2002. Contract was terminated as result of persistent concerns by PWGSC about plaintiff’s progress in demolishing building. PWGSC withheld $9,596 of plaintiff’s $80,000 security deposit for cost of re-tendering contract and paid balance of deposit to plaintiff’s creditors. Plaintiff sought damages for negligent misrepresentation and breach of contract. Action dismissed. Hazardous material survey that was provided with tendering documents was only meant to serve as guide. Correspondence between PWGSC and plaintiff made it clear that it was plaintiff’s responsibility to ensure that it understood full scope of project. There was no evidence that PWGSC negligently made representations that were untrue, inaccurate or misleading. Claim for negligent misrepresentation could not succeed. Evidence given by plaintiff to explain delays was inconsistent. PWGSC was justified in its concerns regarding delays. There were numerous delays that were primarily caused by plaintiff. Following deliberation and appropriate notice, PWGSC exercised its rights pursuant to contract to take work out of plaintiff’s hands and to terminate contract and it was entitled to do so. PWGSC was entitled to convert security deposit and withhold amount to cover its re-tender costs. Remainder of deposit was properly paid to plaintiff’s creditors pursuant to contract. There was no breach of contract by PWGSC. Plaintiff was not entitled to damages for costs associated with delays and standby time. Contract specifically stated that plaintiff was responsible for all such delay costs. Plaintiff was not entitled to payment for standby costs, testing expenses or payment for additional asbestos removal work, as there was no evidence to justify award. Plaintiff was entitled to payment of $5,500 for removal of caustic soda, as it removed caustic soda and was not paid for work. There was no basis to award punitive or exemplary damages.

Envireen Construction (1997) Ltd. v. R. (Aug. 13, 2013, F.C., Michael D. Manson J., File No. T-583-06) 232 A.C.W.S. (3d) 371.

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