Indexed as:

Maidstone (Township) v. Loosemore Excavating Inc.

Between

Corporation of the Township of Maidstone, plaintiff, and

Loosemore Excavating Inc., Henry Regts and Thames Valley

Engineering Inc., defendants, and

Simcoe & Erie General Insurance Company, third party

[1996] O.J. No. 2765

30 C.L.R. (2d) 62

65 A.C.W.S. (3d) 35

Court File No. 8844A/89

 Ontario Court of Justice (General Division)

 Windsor, Ontario

Zalev J.

July 8, 1996.

(76 pp.)

Building contracts -- Liability of builder -- Defective workmanship or design -- Remedial requirements by owner -- Professional occupations -- Engineers -- Negligence.

This was an action for negligence and breach of contract. The plaintiff municipality contracted with the defendant engineering firms to plan improvements to a drainage system. The construction contract was offered for tender by the municipality. Another defendant, Loosemore, was awarded the contract. The tender agreement required the winning bid to complete the contract within four months of being awarded the contract. Loosemore failed to complete the contract in the required time. There were also faults in the work. The defendant engineers supervised Loosemore's progress. Resident landowners filed complaints in regard to the work. The defendant engineers agreed that remedial improvements were necessary. The work was not performed. Loosemore claimed that the municipality raised the standard of work expected from them in after execution of the contract.

HELD: The action was granted. Loosemore contracted to perform work at a level that was superior to its actual performance. The defendant engineers were negligent in supervising the work. Loosemore and the engineers were required to pay for the remedial work that was required by meet the contract specifications.

Counsel:

Richard A. Dinham for the plaintiff.

James A. Leber for Loosemore Excavating Inc., and Simcoe & Erie General Insurance Company.

Raymond G. Colautti for the defendants Henry Regts and Thames Valley Engineering Inc.

INDEX

Page #

1.

History

3

2.

Council Meeting of May 16, 1988

15

3.

Peralta Report

20

4.

Action Against Loosemore

30

4.(1)	Credits to Maidstone & Damages
	Against Loosemore	33

5.

Counterclaim of Loosemore Against Maidstone

53

6.	Loosemore Crossclaim Against Regts
	& Thames Valley	59

7.	Plaintiff's Action Against
	Regts & Thames Valley	61

8.	Regts & Thames Valley Crossclaim
	Against Loosemore	72

9.	Regts & Thames Valley Third Party Claim
	Against Simcoe & Erie	72

[Ed. note: page numbers referred to on paper copy only.]

1     ZALEV J.:-- The plaintiff's claim is for damages against the defendant Loosemore Excavating Inc. ("Loosemore") for damages for negligence in the construction of the 4th Concession Drain improvements and Pump Station outlet works in the Township of Maidstone, and for damages against Loosemore for breach of its contract with the plaintiff dated the 25th day of March, 1987. The plaintiff also claims damages against the defendants Henry Regts ("Regts") and Thames Valley Engineering Inc. ("Thames Valley") for negligence in the design, planning and preparation of specifications and plans for the construction of the said drain improvements and Pump Station outlet works.

2     Regts and Thames Valley joined Simcoe & Erie General Insurance Company ("Simcoe & Erie").

3     (a) For a declaration that Simcoe & Erie is liable as guarantor under a performance bond issued on March 10, 1987 in respect of the said contract between Maidstone and Loosemore; and

4     (b) For contribution, indemnity and other relief over to which Regts and Thames Valley may be entitled to under the provisions of the performance bond.

5     The defendant Loosemore counterclaims against Maidstone for damages and crossclaims against Regts and Thames Valley for contribution, indemnity and damages.

6     The defendants Regts and Thames Valley crossclaim against the defendant Loosemore for contribution, indemnity and relief over.

7     This actions arises out of the work and construction in the improvement of the 4th Concession Drain in Maidstone Township. The defendant Loosemore is the contractor. The defendant Regts is an engineer and president and an employee of the defendant Thames Valley which carries on business as consulting engineers.

8     The defendant Loosemore carries on business as a general contractor. It is operated by William Loosemore and his wife.

1. History

9     The 4th Concession Drain is approximately 7 miles long, running southerly in the Township of Maidstone from the south shore of Lake St. Clair. It drains an area of approximately 3,500 acres of land, part of which is farmland and about 180 acres of which is residential land including the Town of Emeryville. The Drain was last repaired in 1967. It also serves as an outlet for other municipal drains. The Drain varied in size from the southerly end to the outlet at Lake St. Clair.

10     The Drain varied from south end to the outlet having a 1 metre bottom and 3 metre top at the south end and a 5 metre bottom and 11 metre top at Lake St. Clair. It had the mean grade of .105 percent.

11     The depth of the drain varied from a maximum of 3.3 metres to a minimum of 1 metre at the south end. The depth at Lake St. Clair was about 1.1 metre. A one in 100 year storm would cause flooding in the area of Highway 2 and the Town of Emeryville. In 1986 Lake St. Clair was at an 85 year high. The high water was causing problems on the lake shore and at drain outlets.

12     As a result, landowners in the area filed a requisition with the Township for the appointment of an engineer with a view to improving the Drain. The defendant Thames Valley was duly appointed and Thames Valley assigned the primary responsibility for the work to the defendant Regts.

13     Regts is a professional engineer who was responsible for general and engineering management of Thames Valley Engineering since 1974. Since 1962, he has prepared Drainage Reports under the Drainage Act for a number of municipalities in Essex and Kent Counties. He served as Drainage Consultant for the Township of Maidstone since 1976 and did over 120 projects in Maidstone. He was appointed Drainage Commissioner of Maidstone Township from 1981 to 1987. He graduated from the University of Windsor with a Bachelor of Science Degree in Civil Engineering in 1967. In 1968 he received a Master of Civil Engineering Degree with a specialty of research in hydraulics and hydrology soil mechanics and drainage.

14     An on site meeting was held on March 25, 1986 as required by the Drainage Act. The engineers prepared a preliminary report dated July 9, 1986, followed by a further preliminary submission dated October 14, 1986 and a final report dated October 16, 1986. The Township Council instructed the engineers to complete the work to reasonable economic standards and to let the landowners decide which way they wanted to go. The engineers also prepared plans and specifications.

15     The Reports recommended that:

(1) The dredging of 50 metres of the 4th Concession Drain with a bottom width of not less than 10 metres with side slopes at 2:1 to a bottom elevation of 174.00 for a distance of 50 metres beyond station 0 plus 00.

(2) That this dredged material and the excavation from Lilydale northerly to the lake be used for filling the land on the west side of the drain as well as raising up the area at the end of Lilydale around the pump station and also raising the berm along the east side of the drain.

(3) Construction of a gate structure with 4 large gates across the 4th Concession Drain just north of the Canadian National Railroad, together with a pump station housing two 40 HP electric pumps, each capable of pumping 12,500 US gallons/minute.

(4) The construction of several catch basins and outlets for the Lilydale drain west as well as for drainage of the lands to the east of this pump station.

(5) Berms to be constructed from the Canadian National Right of Way southerly to Highway 2 with a top elevation of not less than 176.75, taking care not to damage any fruit or decorative trees on the sides of the drain.

(6) South of Highway 2 to approximately Pierre Ave., that a small floating dredge be used to clean out the bottom of the drain and transport this material either upstream or downstream to suitable fill area for further disposal.

(7) Full cleaning and brushing of the Drain for the balance of its length.

(8) Because of the debris along the bottom of the 4th Concession drain and the ease of disposal of such material at the county landfill site, such material not be disposed of on the farmlands, but hauled by the contractor to the landfill site or such other site as he may acquire at his own expense.

(9) Replacement of a culvert located at Station 10 + 067 on lands owned by G. Fuerth.

(10) The cleaning out of all other culverts and bridges and the relaying of the culvert at Station 10 + 985 owned by E. McGuire and repair of its headwalls.

(11) A lake protection gate structure complete with pump works be installed as detailed on the plans. The purpose of the gates would be to allow larger storm flows to pass through the gates. It should be noted that the water will not flow through the gates until it reaches lake level at which time the gates can be manually opened. After a storm has passed, the gates can again be closed and the drain pumped dry by use of the automatic pumps.

(12) Installation of back water gates on several other sewer outlets.

16     It was the opinion of the engineers that this should substantially improve the drainage for the owners of land in the Emeryville area as well as the owners east and west of the Drain along Highway 2 and Lilydale Avenue, as far south as the Canadian Pacific Railway.

17     To adequately pump the Drain at peak flow would require a Pump Station beyond the reasonable capacity of the owners to pay for the same. It was the engineer's opinion that the pump they recommended would be adequate.

18     All of this was more particularly detailed on the plans and specifications.

19     The engineers estimated the cost of the improvements to be $240,305. Tenders were called for and 3 tenders were submitted:

Loosemore	- $234,591.75
Dean Construction	- $329,131.00
Hulst Town Construction	- $385,950.00

20     Regts had no previous knowledge of Loosemore. He made inquiries of Essex Regional Conservation Authority and Todgham and Case Limited with respect to Loosemore's reliability. There were no negative comments received. Although Loosemore had done other drainage works, it had no experience with a drain of this complexity.

21     Loosemore was essentially a family business operated by William Loosemore, his wife Elaine, their son James, and son-in-law Jim Bourassa. William Loosemore is in charge of all construction operations. He has been in the construction business since 1966. He is a licensed hoisting engineer, licensed to operate all kinds of motorized equipment for hoisting on drainage projects as well as excavators, drag lines and similar equipment. No other employee of Loosemore is licensed. Loosemore has two link belt drag lines, two excavators and three bulldozers.

22     Elaine Loosemore does all the office work and occasionally does light work in the field. In 1977 Loosemore did sheet piling and rock protection work on Walpole Island which involved the construction of two pump stations.

23     The Township accepted Loosemore's tender subject to the engineer's approval. Regts did approve and Loosemore was awarded the contract. The contract between Loosemore and Maidstone was in writing and signed March 25, 1987.

24     Loosemore's tender signed March 2, 1987 included its agreement to have the required equipment and labour at the site and to work continuously on the project (weather conditions permitting) within 3 weeks of the signing of the contract.

25     Loosemore also agreed to complete within 20 weeks of the signing of the contract.

26     The tender documents were deemed to be part of the signed contract.

27     Loosemore and the Third Party, Simcoe & Erie, a corporation authorized to transact the business of suretyship in the Province of Ontario executed a performance bond in favour of the Township in the amount of $234,935.75 with respect to the said contract.

28     Between May 8, 1987 and May 13, 1988, Thames Valley approved a number of extras. These were approved by Maidstone council, thereby increasing the contract price to $260,198.75.

29     Loosemore failed to complete the contract within the required 20 weeks. Ratepayers started calling the Township councillors. At first the council did nothing. At the beginning of 1988, council considered holding Loosemore responsible for the delay.

30     Regts had written to Loosemore on August 21, 1987 pointing out that it should have completed the project by August 25, 1987 and asking how much further time was required and he would take it up with the council.

31     Regts wrote again on September 4, 1987 pointing out that little good weather was left and urging Loosemore to get on with it.

32     On November 2, 1987 following his inspection, Regts wrote Loosemore pointing out a preliminary list of deficiencies and requesting that the work be completed as soon as possible.

33     On November 4, 1987, Regts notified the assessed owners that the drain had been excavated from its south end to Lake St. Clair and that most of the work was complete except for the pump station and some clean up and touch up work to be done. Following further complaints by the assessed owners as to the delay, Maidstone Council considered the problem at its meeting of February 15, 1988. The following motion was passed at that meeting:

"That Loosemore excavating's contract for the construction of the 4th Concession Drain and Pumping Scheme be extended without prejudice to March 15, 1988, provided that Loosemore Excavating pay all interest charges incurred and provided that he also be held responsible for all damages incurred due to the construction delay."

On February 17, 1988, the Township wrote to Loosemore quoting the said resolution followed by these words:

"It is of the utmost importance that this project be completed with the least possible delay as the agreement was signed March 25th, 1987 with a time of completion being 20 weeks. This means that the work should have been completed by August 26th, 1987 and this is allowing 3 weeks extra from the contract signing date. The Township of Maidstone has granted you many courtesies, in particular the extension of the contract to January 31, 1988. You have once again been granted a further extension by the Council of the Township of Maidstone, but this time it is an extension with conditions. Thank you for the prompt attention and co-operation."

34     However, Loosemore did not complete the project by March 15, 1988. One of the matters which caused some delay was the rupture of a watermain by Loosemore in the course of excavation on April 20, 1987.

35     On May 12, 1988 the Drainage Committee of the council met with the Township Clerk, Annette Drouillard, Loosemore, Drainage Commissioner Roland Pelletier, Regts and Rick Gritter, an engineer employed by Thames Valley who was assisting Regts in supervision of the work. On March 16, 1988, Regts wrote to Loosemore with a copy to the Township pointing out to Regts and the Township and its solicitor had been very patient and that the great amount of poor workmanship and poor clean-up was giving Loosemore a terrible reputation. Regts conceded in fairness that some of the work was satisfactory: (1) some of the drain excavation; (2) some of the brushing; and (3) some of the steel work.

36     The letter went on to say that it is essential for Loosemore if the Township agrees, to complete the work in a first-class workmanlike manner otherwise the work could not be recommended for acceptance by the Township.

37     The letter concluded:

"We would like to see you finished up and out of there and paid up.

Please take this warning to heart. We have no alternative but to recommend that the Township takes firm action with you. Whatever that may be will be up to them."

38     On May 4, 1988 Regts again wrote Loosemore setting out a list of major deficiencies.

39     The major portion of the work had been completed. The deficiencies list alleged was said to be clean-up and touch-up work as outlined in the deficiencies list. Loosemore promised to complete that week, weather permitting.

40     Further additional extras to the contract totalling $6420 were said to be included. The last of the items on the extra list was $1200 for extra work beyond Loosemore's share of the cost of lowering a watermain as agreed with the Township. Regts added that Loosemore owed a credit of $560 to the Township for two culverts where Loosemore had installed broken crock which was not according to the specifications. That reduced the extras to $580.

41     On April 20, 1987 during the course of excavation Loosemore severed a watermain, the property of the Town of Belle River. The letter concluded with notice of a final review meeting to be held at the Township offices on May 12, 1988 at 1:30 p.m. at which time the final progress certificate and a deficiency list were to be reviewed.

42     On May 12, 1988 there was a meeting of the Township Drainage Committee. The best evidence of what occurred at that meeting which I accept is the Minutes of the Meeting. A summary of the Minutes of that meeting taken by Rick Gritter follow.

43     The existing status of the drain was discussed along with a number of deficiencies estimated to cost $1100 to correct.

44     On reviewing the change orders it was noticed that the total contract to Loosemore was now $260,198.75.

45     In addition a hydro line was to be installed from Highway 2 to the pump station. As this was not part of Loosemore's contract the Township was to enter into a separate contract with Tucker Electric to install the line for $11,600.

46     As Loosemore had been paid $178,003.22 to date the balance then owing to it was $82,195.53.

47     The Township Clerk reported that damages of $9,355.26 in interest charges had been incurred to that date due to Loosemore's failure to complete on time. That figure did not include legal costs or extra engineering charges incurred.

48     It was agreed that William Loosemore be allowed to go before Council on May 16, 1988 to present any objections or counter-proposals concerning these additional charges.

2. Council Meeting on May 16, 1988

49     There is conflicting evidence as to what actually occurred at the meeting of council on May 16, 1988. William Loosemore testified that his wife had prepared a written list of the extras which they were claiming. No copy of such a document was produced by Loosemore or tendered in evidence. Exhibit 41 is a list of extras of a total sum of $10,144.49 which is the basis of Loosemore's counterclaim in this action. The evidence does not disclose if this is the exact information which William Loosemore claimed his wife produced at the meeting. He further testified that each councillor was given a sheet of paper setting out the list of extras claimed and that Mrs. Loosemore told the council what the company wanted. William Loosemore then went on to say that the councillors then went into a back room for about 20 minutes or half an hour following which Annette Drouillard came out of the back room with a sheet of paper. Mr. Loosemore's evidence according to Page 79 of the transcript of March 18, 1996 was as follows:

"... and so when we came with our bills, we thought we would get more than $9000."

50     Mr. Loosemore had immediately before that said that at the meeting of May 12, Annette Drouillard had told him that the Township's interest claim was $9000.

51     The transcript continues:

"... and at the meeting with - we gave to the - after we gave the sheets to the council they went back in the back room.

The Court:	Just a moment please
Mr. LeBer:	Sorry, Your Honour.

A: O.K. Your Honour, I - and, she said to me and my wife if you sign this piece of paper - I never read it because I don't read very well. And so - and, so it was stating that if I signed off of the waterline and the credit or the bills that I had that they would forget the interest and I couldn't sue for the waterline."

That is the end of the transcript.

52     Mr. Loosemore had before May 19, 1988 claimed $1200 from the Township for stone which Loosemore had supplied for the repair of the watermain damaged on April 20, 1987. He had also claimed part of the repair costs from Loosemore's liability insurer. The transcript of Mr. Loosemore's evidence continues:

"The Court:

Just a moment.

A. They couldn't - I couldn't sue for the waterline and they couldn't sue me for any more deficiencies.

The Court: What about the interest? What did she say about that?

A. And the interest - the interest also. Like, we were calling it a square deal and I could go home and forget about it and they would give me my cheque.

The Court:

You said it was a square deal.

A. They were - there was two or three small deficiencies left and they were keeping $5000 and we left the job - we left the council meeting that day feeling that we were complete square and were gonna get our cheque right away."

53     Mr. Loosemore never testified that he signed the paper which he said Annette Drouillard produced.

54     The Minutes of the Meeting have no reference to any such statement being made by Annette Drouillard. The Minutes read as follows with respect to the Loosemores. No resolution was passed to settle with Loosemore on the terms he claim in his evidence. The Minutes continue:

" Mr. and Mrs. Bill Loosemore attended before council regarding the 4th Concession Drain Improvements & Pumping Station.

Moved by Mr. Gauthier and seconded by Mr. Byrne that we hereby approve of change orders 1 to 5 for the repair and improvements to the 4th Concession Drain Improvements & Pumping Station Scheme bringing the final construction contract with Loosemore Excavating Inc. to $260,198.75. Carried

Moved by Mr. Gauthier and seconded by Mr. George that the interest charges assessed against Loosemore Excavating Inc. be dropped and that the Clerk be hereby authorized to sign the final release to Comiskey Limited, Insurance Adjusters, for the watermain repairs. Carried."

55     There is no evidence that, assuming such a paper was produced by Annette Drouillard, that Mr. or Mrs. Loosemore ever signed it or any other document requested by Maidstone.

56     Regts was present at the Drainage Committee meeting on May 12. Regts testified that there was some discussion of a settlement with Loosemore at that meeting which the Drainage Committee would recommend to council. Regts testified that a settlement was made at the May 12 meeting which was to be recommended to council at its meeting of May 16. He further testified that the resolution was formally adopted by council on May 16. I find that no such resolution was passed. However, he did not say what the terms of settlement were. The motion carried at the council meeting of May 16, was a withdrawal only of the claim for interest charges, not any claim for deficiencies.

57     Joseph Byrne, one of the councillors, testified. He had no recollection of any discussion of any claims against Loosemore being dropped except the claim for interest. He also testified that the claim for interest was in consideration of Loosemore dropping its claim against Maidstone for its costs of repairing the watermain. As those amounts were about the same this seems probable.

58     Annette Drouillard is in Essex County and was not called to testify. Counsel for Loosemore submits that I ought to draw the inference that her evidence on this point would be adverse to the plaintiff. In the absence of any evidence that she has any recollection of this event I decline to draw such an inference. In any event, it is to be noted that Mrs. Loosemore was in the court house during this trial and she was not called to testify on behalf of the defendant Loosemore.

59     Mr. Byrne denied that at the May 16 meeting the relationship with Loosemore had been finally resolved, denied that the accounting had been basically completed, and denied that there was some finality to the accounting and the payments.

60     I reject Loosemore's evidence as to a settlement and I find that the only settlement which was made on May 16 was that recorded in the Minutes of council.

61     In any event, even if such words as alleged were spoken by Annette Drouillard and amounted to a representation, I do not find that such was made with the intention of inducing Loosemore to change its position nor do I find that it relied on such representation to its detriment. Even if made, there is no evidence that such was within the scope of her express authority.

62     Regts issued a Certificate of Substantial Performance under the Construction Lien Act on May 13, 1988 following which Loosemore was paid the balance of the hold-back except for $5000 which the Township retained. Following some additional brushing by Loosemore, Regts wrote to Maidstone on October 28, 1988 advising that he had inspected the drain on October 27 at which time the brushing and clean-up had been satisfactorily completed except for some clean-up which Loosemore had promised to complete to Township standards. Regts recommended release of the $5000 hold-back.

3. Peralta Report

63     Nick Peralta is a civil engineer who graduated from the University of Windsor in 1974 with a degree in civil engineering. He received his designation as Professional Engineer in 1976 and his designation as Consulting Engineer in 1984. For the past 13 years he has operated his own business, N.J. Peralta Engineering Limited, Consulting Engineers, whose primary work was in the drainage field. He has been involved in 14 pumping stations to date. In late December 1987 he was appointed Maidstone Township Drainage Superintendent. This position mostly involved the maintenance of the existing drains. It was the function of another appointee, the Drainage Commissioner, to oversee the actual maintenance work. The Drainage Commissioner in 1987 was Roland Pelletier. Pelletier was not an engineer. He was a carpenter by trade who ran a business as a contractor for three years, building custom homes until he went to work for the Township in May 1984 when he was appointed to five positions - Chief Building Official, Plumbing Inspector, Drainage Commissioner, Inspector of Tile Drainage and by-law Enforcement Officer. He continued in those positions until 1993. Before working for the Township he had no experience in drainage matters. His duties for inspection and supervision were: Attend pre-construction meeting. Meet with contractor at site to determine whether sufficient grade stakes still remain along the drain and direct consultant (whether re-staking necessary or not). Fulltime inspection during construction is preferred; however, for open drain improvements the Township Drainage Inspector should be required to provide periodic inspections. Each drain should be evaluated with a minimum of two inspections daily to verify and check the work completed (these inspections should include checking drain bottom grades and widths, and drain side slopes with the use of either a string level or automatic level. The Township Drainage Inspector should be in attendance on a fulltime basis when special items such as bridge structures and other like appurtenances are being constructed (these items cannot be properly inspected after their construction has already been completed). The timing of the inspections should allow for work to be performed between inspections. A daily log book on each drainage project should be kept by the Drainage Inspector which upon completion of the project, the log book is to be certified and sealed and be inserted into the drainage file for future reference (all items, discussions, inspections, meetings and other information pertinent to carrying out of the project should be documented for the duration of its construction). Act as a Township contact person and also drainage project liaison between consultant, ratepayers, contractor and Township Administration. Deal with the concerns of ratepayers on the drainage project. During construction, provide consultant with status of works completed and assist the consultant in the preparation interim payment certificates. Determine when substantial completion has been achieved on the project and schedule a final inspection meeting at the site. The Drainage Committee is to be notified in advance of the final inspection meeting. Attend final inspection meeting and review complete works in detail with both the contractor and the consultant including walking the complete length of the drain if necessary.

64     After his appointment Pelletier took a five day course at the Agricultural College to learn about drainage and tile drains. He also had some learning on the job by picking up information from the engineers, mostly from Regts.

65     Pelletier acted as the eyes of council on the 4th Concession Drain improvement project. He also acted as liaison between the affected landowners and Regts in sorting out the landowners' problems. Thames Valley had two other employees on the job assisting Regts - John Verkaik, an engineering technician, and Rick Gritter, an engineer. Pelletier said he also helped oversee the job. He walked the drain occasionally with Regts, but not on any fixed schedule, observing the excavation, water level and brushing. If he noticed that a tree needed to be cut down or the brushing improved he would tell Loosemore.

66     On May 5, 1989 the Township Clerk wrote Nick Peralta advising him that the councillors had passed the following resolution:

"That we hereby instruct our Drainage Superintendent, Nick Peralta to do the total assessment and report for the construction of the 4th Concession Drain Improvement and Pump Station Outlet Works with estimates of costs. Said assessments and report to be submitted on or before May 22, 1989 to the Drainage Committee and solicitor for whatever action may be authorized by council. That we hereby support the appellants of the 4th Concession Drain Improvements and Pump Station Outlet Works and further state that their appeal under Section 54 of the Drainage Act is hereby supported with engineering and legal services as may be authorized by council."

67     On May 5, 1989 the Township Clerk wrote to Nick Peralta setting out the two motions verbatim and instructing him to proceed with the assessment and report back to council with estimates of costs to be submitted to the Drainage Committee and solicitor before May 22.

68     Up to that point Peralta did not know of the appeal but was aware of the list of 23 complaints prepared by owners Emery and Laforet. The appeal was being taken by 100 owners on the basis of the Emery-Laforet list.

69     Peralta obtained and reviewed Regts original report of October 16, 1986 to council, the tender, the specifications and the design drawings. He then walked the whole length of the drain with Roland Pelletier and noted what he considered to be deficiencies. Peralta also reviewed the Emery-Laforet list and then checked to see if they were valid and discussed each item with Pelletier. Peralta then prepared a preliminary report for council. This was followed by his final report on May 22, 1989.

70     The report set out deficiencies in the following areas with particulars of each:

(1) Dredging north of Station 0+000.

(2) Drain excavation, Station 0+000 southerly to gate structure.

(3) steel piling wall.

(4) steel gate structure.

(5) pump station.

(6) Drain excavation and berm construction from C.N.R. to Highway 2.

(7) Drain excavation and berm construction from station 0+374 to Station 0+795.

(8) Drain excavation and brushing from Station 0+795 to Station 0+800.

(9) Drain excavation and brushing from Station 1+800 to Station 2+885

(10) Drain excavation and brushing from Station 2+885 to Station 8+865

(11) Drain excavation and brushing from Station 8+865 to Station 10+300.

(12) Drain excavation from Station 10+300 to Station 11+645.

(13) Provision for Armco flood gates on existing drain outlet pipes.

(14) Station 10+867 access bridge.

(15) Station 10+985 access bridge, corrugated steel pipe and end walls.

(16) Fences

(17) Tile outlets and wash-outs.

(18) Change orders.

71     Peralta's estimate for the cost of corrections was in the range of $68,000.

For Appeal to the Drainage Tribunal

72     After appeal to the Drainage Tribunal the appeal of the owners was first scheduled to be heard by the Ontario Drainage Tribunal on August 11, 1989. Regts first received notice of the hearing on July 21, 1989. Regts wrote to the Tribunal pointing out that he might not have enough time to investigate and prepare for the hearing by August 11. Regts then wrote to the Township Administrator requesting a copy of the 23 Emery-Laforet complaints as he had never received a copy before and advising that he might not have enough time to prepare for a hearing on August 11. Regts received a copy of the Emery-Laforet complaints on August 9, 1989. He received a copy of the Peralta report of May 22 on August 8, 1989.

73     Regts attended before the Tribunal on August 11, 1989 and requested an adjournment. The Tribunal also had an assessment appeal by the Lambiers on the list that day. It did not involve workmanship. The Tribunal proceeded to hear that appeal and then adjourned.

74     On August 16, 1989 Regts attended at the Township Office and met with the Administrator, John Farris, and picked up a copy of Loosemore's Performance Bond which he thought had a two year guarantee from the date of final payment. Regts also spoke to Mr. DeLuca, the Township Solicitor, and agreed that:

(1) They would meet with Mr. Peralta;

(2) Review his report, meet with Mr. Peralta and the Drainage Committee;

(3) Based on the decision of the Drainage Committee, contact Loosemore;

(4) Based on Item 3 contact the bonding company; and

(5) They would arrange to have the work done by Loosemore or someone else and go after the bonding company.

In so doing Regts was hoping to get the matter resolved.

75     Regts met on September 12, 1989 with Mr. Farris, Mr. Peralta, Mr. Dinham (an associate of the Township solicitor). Regts was surprised to hear that the Township was going to sue Loosemore and Thames Valley. The Emery-Laforet complaints were then reviewed. Regts was to meet with Mr. Peralta, the Drainage Committee, solicitors and Loosemore in order to try to resolve the matter. On October 22, 1989 Regts wrote Loosemore that the contract must be completed with all corrections by October 30, failing which he would notify the bonding company, have the work done by others and take legal action.

76     The Tribunal had adjourned to October 25, 1989. It heard evidence on 4 days between October 25 and December 19. Regts retained counsel, Mr. Colautti. Regts and Peralta met for many hours on December 19 with a view to preparing a list of deficiencies to which they both agreed. Mr. Loosemore was present in the room and hovered around and was invited to take part but did not. He was not represented by counsel. A document was typed up reflecting the agreement between Regts and Peralta. It was examined by Mr. Colautti. Loosemore was invited to look at it but did not choose to do so. The typed document was filed with the Tribunal as the agreement of the two engineers and marked Exhibit 50. The landowners' complaints were annexed to that exhibit. Regts testified that he had not agreed to Tribunal Exhibit 50.

77     Tribunal Exhibit 50 is headed "Work that must be performed or has been performed (agreed to by Engineers - subject to acceptance after final inspection)".

78     Mr. DeLuca, the Township Solicitor, acted as counsel for the Township at the proceedings before the Tribunal. He testified the Tribunal wanted some consensus and that Exhibit 50 was developed after many hours of discussion between Mr. Peralta and Mr. Regts and they finally arrived at a final list of deficiencies which was typed up at the Township offices where the hearing was taking place.

79     The typed document was filed with the Tribunal as an agreement. Counsel for the defendant Loosemore and Third Party Simcoe & Erie, submitted that the Tribunal appears to have been misled with respect to Exhibit 50. I reject that submission. Mr. DeLuca is a lawyer of some 30 years experience. He is senior partner in his firm which had an ongoing retainer with the Township. I do not believe that he would have deliberately misled the Tribunal. I find that he did not mislead the Tribunal with respect to Exhibit 50 either intentionally or accidentally. Regts was represented at the hearing by Mr. Colautti. Mr. Colautti would most certainly have objected had Mr. DeLuca told the Tribunal that the document was agreed to by the engineers if such were not the fact. Mr. Colautti had examined the document before it was filed with the Tribunal.

4. Action Against Loosemore

80     The specifications which form part of the contract included the following terms:

"1. General Conditions

These specifications and accompanying plans and report contemplate the furnishing of all labour, materials, and equipment required for the performance of all operations, related to the repair and improvement of the 4th Concession Drain, together with the construction of a pump station and other outlet works at Lake St. Clair, said work being located in the Township of Maidstone.

2. General Description of Work

The work shall include the excavation and brushing and cleaning of the culverts in the drain from its lower end at Lake St. Clair being Station 0+000 to its upper end south of County Road 42 at the line between Lot 13 and 14 South Malden Road Concession. It shall include the construction of steel pile retaining walls near the outlet at Lake St. Clair together with a concrete slab, gates, pump station, together with berms, and erosion protection in this area, etc., together also with removal of several culverts and replacing the same with new corrugated pipes with new rubble and headwalls and such other work as detailed on the plans.

All of the work is more particularly set out in these specifications, plans, and drawings, is to be done in a first-class workman-like manner, complete in all respects, including the supply of all items herein and/or shown on the drawings, and/or which can reasonably be considered inferable from the contract documents for a complete and satisfactory installation. The contractor shall not claim any extra payment for inferable work nor for the extension of time of completion on account."

81     Evidence was given by Regts, the Project Engineer, and by Nick Peralta. Although their opinions differed in many details I find that all the work was not done in a first-class workman-like manner nor entirely in accord with the specifications, plans and drawings.

82     On November 2, 1987 Regts wrote Loosemore pointing out some 16 deficiencies and requesting Loosemore to pay a bit more attention to its workmanship. At the meeting of May 12, 1988 Loosemore was advised of further deficiencies following Regts' inspection on May 4th.

83     Peralta's report of his inspection of the project was thorough and detailed. It was submitted on behalf of Loosemore that Peralta had applied a new standard of performance much higher than that applied by Regts and that it was unreasonable.

84     It is apparent that Regts was not as strict in his judgment of the work as Peralta. However, the specifications set the standard of performance i.e. "first class". I do not believe that Peralta required a higher level of performance than that in all instances. Regts gave Loosemore some leeway. During the course of the project, for example, requesting the Township to extend the time for completion, delaying notification to Simcoe and Erie, and recommending the Township release the hold-back to Loosemore on William Loosemore's promise to correct Regts' list of deficiencies and complete in accordance with Township standards.

85     There was a conflict in the evidence given by Regts and Peralta as to the sufficiency of Loosemore's performance. It was apparent to me that Regts bore some animosity towards Peralta. In December 1987 Peralta replaced Regts as Township Drainage Superintendent. In his conduct throughout Regts occasionally seemed to side with Mr. Loosemore in his dealings with the Township. They had worked together on this project for over a year. I do not believe that Regts would have placed Loosemore's interests above his duty to the Township even if some camaraderie, which I do not think occurred, had developed arising out of their close association on the project. Regts was rather unhappy about Peralta's report going to council without first having been discussed with him.

86     Regts also testified that it was common practice in Maidstone to be somewhat lenient. This common practice, would have been his own practice on previous projects in Maidstone. I bear it in mind as well that as a defendant in these proceedings it may be in his own interest to minimize the fault on Loosemore's part.

87     In considering the weight to be given to Peralta's evidence I have to consider Peralta's position as successor to Regts who might want to show up Regts in order to ingratiate himself with the council and solidify his own position. While I found him keen in defending his own opinions I did not conclude that he was being over zealous in his opinions as to all of Loosemore's work.

4.(1) Credits to Maidstone & Damages Against Loosemore

88     Wherever damages are assessed or credits given to Maidstone with respect to the following items I have preferred Peralta's evidence that such items constitute deficiencies over any evidence to the contrary:

89     Peralta testified that Loosemore's work was deficient in a number of areas. I follow the item numbering in Exhibit 14.

90     Item 2a - Removal of temporary dam from drain. Soundings show something under water in this area. I accept the evidence that it is not sediment. Damages against Loosemore assessed at $7490.

91     Item 2d - Deficiencies in fill, drainage pipe etc. In Lilydale right of way. Credit Maidstone $2900.

92     Item 4a - Inadequate gate opening structures, devices and lifting apparatus. These were replaced by Regts at his own expense during the course of the Tribunal hearing. No expense was incurred by Maidstone. Damages assessed at nil.

93     Item 4b - Improper fence height on west side north of pump house. A new fence was installed at a cost to Maidstone of $3,049.50. Damages are assessed at the cost of replacement $3,049.50.

94     Item 4c - Installation of fence on west side south of pump house. Not required by plans or specifications. Tribunal ordered Maidstone to instal to protect from what it called a safety hazard. Therefore no breach of contract by Loosemore. Loosemore was not a party to the proceedings before the Tribunal and not represented by counsel. William Loosemore was present at the hearing but did not testify and was not given an opportunity to make submissions personally or by counsel. I see no basis for Loosemore's liability. Nothing allowed as damages for this item.

95     Item 4d - Replacement of deficient hollow pipe, tubing, handrails. These had to be replaced at a cost to Maidstone of $1,364.25. Damages assessed at $1,364.25.

96     Item 4e - Deficient catwalk, handrails. Replaced at no cost to Maidstone. Damages assessed at nil.

97     Item 4f - Installation of (hollow square) catwalk support at a cost to Maidstone of $668.75. Damages assessed at $668.75.

98     Item 4g and 5d - Installation of standard fasteners for catwalk. Costs to Maidstone of $2,399.29. Damages assessed at $1,399.29.

99     Item 5 - Structural improvement for south pump wall and floor grating in area south of pump at cost to Maidstone of $1,075.00. Damages assessed at $1,075.00.

100     Item 5c - Structural binding of removable sections of steel floor grating. Damages assessed at $100.

101     Item 5e - Installation of pump basin ladder. Cost of replacement to Maidstone $1,284. Damages assessed at $1,284.

102     Item 5f(i) - Vented soffits not provided. Installed by the Township but no evidence of cost. Damages assessed at nil.

103     Item 5f(iii) - Installation of particle board on interior instead of plywood. Credit Maidstone $125.

104     Item 5f(iv) - Roof leaks. These were caused by vandalism. Loosemore not liable.

105     Item 5f(vi) - Improper grading and back filling around pump house. Credit Maidstone $500.

106     Item 10e - At Station 8+172 reconstruction of bridge north headwall. The cost to Maidstone was $3,210. Damages are assessed sat $3,210.

107     Item 10f - Drain excavation through County Road 42. Cost to Maidstone was $1,926. Damages are assessed at $1,926.

108     Item 11c - Station 9+534 tile main improvements. The cost to Maidstone was $704.06. Damages are assessed at $704.06.

109     Item 14a and 14b - At Station 7+135 broken crock protection installed in place of intended wall material. The cost to Maidstone was $417.30. Damages are assessed at $417.30.

110     Item 15b - Granular driveway surface was not provided. Credit to Maidstone $483.

111     Items 6a, 6b and 7c - Berm height deficiency. The plans call for these berms to be built to an elevation of 177.0 metres. At the time of Peralta's inspection in May 1989 these berm heights were up to 15 inches too low. I find that Loosemore built these berms to the proper elevation of 177.0 metres. The difference in elevation is the result of settlement of the earth in the berms. The plaintiff submits that settlement is a known problem and that it is the responsibility of the contractor to build the berms that they will settle to the required height. This seems unreasonable. How many years settlement must the contractor allow for? There is no guarantee in the contract for any length of time after completion. Counsel for Loosemore submitted that Regts is in the unique position of being aware of what his design contemplated. I agree with that submission. Regts testified that the berm heights were acceptable. He designed the whole project including the berm heights to protect the land in the area from any flooding which would result from once in 100 year storms and the highest historical level of Lake St. Clair. Peralta testified that the lower elevations constituted a deficiency even though only 15 inches below the elevation called for because the Township and the ratepayers who paid for the project did not get the protection they thought there were going to get. Peralta did not know why the design called for 177 metres. He had never discussed the matter with Regts. He guessed that it was to have the pumping stations a little bit higher than the protection. In this regard Peralta's guess was clearly wrong. I accept Regts' evidence as to his reason for designing the berms at 177 metres. Regts found the lower elevation acceptable to his design, I find that the variation is without significance. It is to be noted that the drain has functioned successfully without problems since the improvement project was completed some 8 years ago. I find the berm heights acceptable.

112     It would be appropriate here to quote from "The Canadian Law of Architecture and Engineering", Second Edition, by Beverley McLachlin J., Wilfred J. Wallace J.A. and Arthur Grant. In dealing with the interpretation of specifications and variations of the work at page 131 the learned authors say:

"For the purpose of insuring that the work is performed as required by the contract and specifications architects or engineers are often required to interpret the drawings and specifications. They must do so honestly and in an impartial manner, on the basis set out in the construction contract. They have no power to vary the contract or dispense with its conditions. However, in determining whether there has been reasonable compliance with the specifications, some tolerance is permitted."

113     The variation in elevation here has been accepted by the Project Engineer who designed the system. In my view the variation of some 15 inches as a result of natural settlement of the earth by compaction to that extent one year after completion of the work to the specified elevation is reasonable compliance with the plans. Peralta's opinion, based as it is on a false premise must yield to the opinion of Regts. In this instance the standard implicit in Peralta's opinion that the variation is a deficiency must be rejected as unnecessarily meticulous. I find that the variation in elevation of the berms is not a deficiency and that there is no liability on the part of Loosemore entitling Maidstone to damages.

114     Item 7b - Restoration of Ashton Berm. Mr. Ashton attended before the Tribunal and objected to the installation of the berm on his property. Loosemore did part of it and still had its forces on the property. A portion of the berm is completed and is higher than necessary. The portion of the berm not completed is of no significance with respect to the project as a whole. If there is any flooding it will only effect Ashton's property. Ashton was aware of the possibility of his land flooding. The absence of a part of the berm on his property is of benefit to prevent the risk of flooding in Emeryville. I prefer the opinion of Regts that this omission was acceptable. I therefore find that the omission of some berm on Ashton's property is not a deficiency. There is no liability on Loosemore entitling to Maidstone to damages for this item.

115     Items 6c and 7d - Installation of corrugated steel pipe with Flap Gates. The evidence as to whether or not any of these pipes were not installed by Loosemore is conflicting. Even if there are any which were not installed the evidence as to the number is unsatisfactory and unconvincing. I am not satisfied on a balance of probabilities that Loosemore failed to install any of these pipes. Damages are therefore nil.

116     Items 8a to 10c inclusive & Items 11a, & 12a - Brushing. The brushing done by Loosemore was satisfactory in the opinion of Regts and Pelletier. I note at Page 18 of the report of Regts to council on the drain dated October 16, 1986 which was the original report on this project under the Drainage Act and approved by council, Regts recommended that "all of the work be carried on to the specifications attached to the report and/or as common in the Township of Maidstone." Regts had substantial experience as a consultant engineer to the Township on drainage projects from 1976 to 1988. He did about 120 drainage projects for the Township as consultant engineer. He has an extensive knowledge of the standards for drainage projects which were common during the construction of the 4th Concession Drain Improvements.

117     Although Roland Pelletier had no academic qualifications he had on site experience in supervising and inspecting brushing of drains and his opinion as to whether or not brushing by a contractor is acceptable is entitled to some weight, although much less than of that given by Regts or Peralta. As well, he had knowledge of the standard for brushing in Maidstone Township. Both Regts and Pelletier felt that the brushing done by Loosemore was acceptable. Peralta disagreed. On this part of the contract Peralta set the standard too high - near the standard of perfection rather than a standard of reasonable performance, or if higher, the contract standard of performance "in a first class workmanlike manner". Regts was concerned about brushing which left any object or vegetation in the drain which would impede the flow of water in the drain. He also gave evidence as to the previous common practice in Maidstone with respect to brushing. It had been common practice in Maidstone before the 4th Concession Drain Improvements to be lenient with brushing. Trees were valued and if they were not in the way of equipment to clean the drain then those trees were left. If owners wanted to cut the trees for firewood they were permitted to cut down the trees themselves. It was not the intention of Regts to apply any new standard for brushing in the 4th Concession drain improvements. While Loosemore's brushing performance was not perfect it was reasonable and within the ambit of permitted tolerance. I find no deficiency in brushing entitling Maidstone to any damages.

118     Spraying - The specifications provided:

"The contractor shall exercise care that all brush and trees within the channel right of way are removed by close cutting and/or grubbing and all such brush and trees regardless of size and such close cut areas are to be sprayed with any effective approved herbicide spray as per manufacturer's instructions. The contractor is to take all the necessary precautions in application and allocation of spray materials."

119     I accept the evidence of William Loosemore and Donald Dulong that spraying was done. None of those who did the spraying were licensed to do so at the time. The plaintiff called Dr. William Brown in support of its case on this issue. Dr. Brown has a Ph.D. from the University of Minnesota Department of Horticulture. He was qualified as an expert on this issue. He examined the whole drain in company with Peralta and took a video of his observations on November 24, 1994 which was shown in the courtroom. He found that the cutting was perfectly satisfactory. In his examination with respect to the application of chemicals he was unable to say if the significant regrowth which he saw was the result of herbicide having been applied at all or insufficient herbicide having been applied. If the herbicide is applied properly almost immediately after cutting control is in the range of 75%. But if there is a delay of weeks in the application of herbicide after cutting control is only 50 to 60%. In this case it was 1%. He could not see any stumps that looked as if any herbicide had been sprayed. However, he did not go on to say that the stumps had not been sprayed.

120     Having found that the spraying was done, I find that the spraying was not effective as required by the specifications. I accept Dr. Brown's conclusion that it is probable that inadequate chemical was applied and/or the application was too long after cutting for absorption to take place. I find the cost of re-spraying to be $19,058.32 and I assess Maidstone's damages at that figure.

Power Supply to the Pump House

121     The pumps in the Pump House had to be powered by electricity. The closest source of electric power was at #2 Highway, a considerable distance away. In previous years necessary lines were brought in by Ontario Hydro. Charges for such installation had increased substantially over previous years. Regts felt the work could be done cheaper by a private electric contractor. Regts issued a change order to have the installation done by Tucker Electric. Maidstone Council awarded the contract to Tucker Electric and in due course was billed for $11,600 for installation of the line. Problems developed later with the overheating of the pump motors which caused them to shut off. Council then called in Bernard Meloche, a licensed electrician, to determine the cause of the problem. Meloche found that the hook-up done by Tucker Electric was improper and that was the source of the problem. I accept Meloche's evidence in this regard. Meloche corrected the work at a cost to Maidstone of $1,647.08. The problem with the pumps was caused by Tucker's faulty workmanship. Loosemore had nothing to do with this electrical work which was not part of its contract. The faulty workmanship described by Meloche was solely that of Tucker Electric. Loosemore is not liable for Maidstone's expense incurred in correcting Tucker Electric's work.

122     Item 20 - Concrete under the C.N.R. Bridge.

123     Item 23 - Welding - Evidence was given for the plaintiff by Jan Schepers who holds a Master's degree in civil engineering and is an expert in welding. Mr. Schepers testified that there were a number of defects in the welding which I need not list here as they are all set out in his report of November 10th, 1995 (Exhibit 4, Volume 2, page 436 and following). On the other hand Regts testified that all welding is satisfactory. In addition to being a civil engineer Regts has 3 year's practical experience as a welder. I accept his opinion that the same standard cannot be applied to welding done in the shop and welding done, as this was, in the field. I accept the evidence of Regts and I find that the welding was done satisfactorily. The damages on this issue are assessed at nil.

124     Item 20 - Concrete under the C.N.R. bridge. Regts had wanted the concrete to be poured to a depth of 6 inches. The plans and specifications only gave the area the concrete was to cover. William Loosemore asked one of the Thames Valley employees on the job to tell him what volume of concrete was required to fill the area to a depth of 6 inches so that he could tell the concrete supplier how many cubic yards of concrete to deliver. Relying on the figure given to him by that employee William Loosemore ordered the concrete accordingly. Loosemore's workers began by putting the concrete into a depth of 6 inches on the north side of the slope and worked towards the south. As the work progressed it became apparent that there was not going to be enough concrete to cover the entire area to a depth of 6 inches. William Loosemore asked Thames Valley's inspector on the job to verify that they needed more concrete. He was told that there was no more money. It should be noted that this part of the work had been authorized by Regts by a change order dated November 16, 1987 at a price of $10,700. Mr. Loosemore could have chosen to order more concrete and claimed it as an extra but apparently chose not to do so.

125     James Rodger, a civil engineer, and expert in concrete did an inspection of this work in May 1993. The purpose of the inspection was to evaluate the concrete lined portion of the drain under the C.N.R. bridge to determine the type, consistency and erosion potential of the native soils and to provide geotechnical engineering recommendations for any remedial erosion protection. In Rodger's opinion the concrete was placed on the drain channel for erosion protection purposes.

126     Rodger noted that erosion was occurring in some areas. It was his opinion, which I accept, that should further erosion occur the integrity of the retaining walls for the bridge abutment retaining walls could be put in jeopardy.

127     The exposed concrete was manually sounded for the presence of voids and/or holes. Two auger holes were put down to measure the thickness of concrete and the nature and consistency of the native soils.

128     The concrete on the east slope was in fair to poor condition. There were several medium wide cracks. In one area the crack was 6 inches x 16 inches exposing the soil underneath. The upper portion of the north end of the east slope was undermined to depths of 1 inch to 9 inches and contained a number of voids and openings exposing the underlying soil. Large areas of the upper portion of the east slope were voided with gaps present between the concrete lining and the underlying soil. Spot testing of the thickness of the concrete showed thickness as low as 2 inches in some areas. Inspection of the west slope showed similar conditions with concrete thickness down to one half inch. Concrete at the base of the channel was in fairly good condition except in one area.

129     Soil erosion was evident in the south end of the channel slopes. It was Rodger's opinion that ongoing erosion is of concern since significant erosion can adversely affect the bridge retaining walls. Remedial erosion protection was therefore recommended in the upper portion of the channel slopes. Rodger did not say that the problems were caused by any act or omission of Regts. Rodger outlined three possible methods of protecting from further erosion. The first is the removal and replacement of the existing concrete. A geotextile fabric and a six inch layer of granular "A" material would be necessary under the concrete. This would be the most expensive method of correction. The two alternative methods would be cheaper. Rodger's account to the Township for his services was $2,671.13.

130     Maidstone claims the sum of $8,560 for the remedial work and $2,671.13 for Rodger's account. Counsel for Maidstone submitted that $8,560 was the cost of correction following the cheapest of Rodger's three recommendations for correction. Pannunzio quoted $8,560 for the C.N.R. bridge work but I am unable to relate the particulars of Pannunzio's quotation to any of the three recommendations. Although Peralta testified that Item 2 of Pannunzio's tender (Exhibit 4, Volume 2) is the remedial work ordered by the Drainage Tribunal with respect to the concrete under the C.N.R. bridge that does not accord with my reading of Pannunzio's tender. In any event the Tribunal did not specify how the work was to be done. Of the three different methods of remedying the defects the cheapest method only involved removal of the upper 4 feet or so of the concrete from the embankment slopes, covering the area with a geotextile covered with rip-rap material comprised of 4 to 6 inches of durable stone. The evidence does not disclose which of Rodger's three recommendations became Pannunzio's quotation.

131     With respect to liability counsel for Loosemore submits that as a high pressure hose had been used to expose the voids and cracks for Rodger's inspection and that such could have undermined the slab if it had been directed at a spot for a while. He also submits that the defects, if any, arise out of the failure of the Township to provide the funds necessary to pour 6 inches of concrete. In my view these arguments fail. There is no evidence that the defects described by Rodgers are the result solely of the insufficient depth of the concrete. I am satisfied on a balance of probabilities that the defects in this area resulted from Loosemore's failure to do the work in a good and workmanlike manner.

132     As Maidstone has failed to establish on a balance of probabilities that the expenditure of $8,560 will result in the most reasonable solution in the circumstances and not one of the two more expensive it is open to me to disallow any claim for the remedial work. However I allow Rodger's fee of $2,671.13. I assess total damage against Loosemore on this issue at $2,671.13.

133     Item 13(i) to (vi) inclusive - Flap Gates at the End of the Tile Mains Not Installed. I find that six such flap gates were not installed as required. The cost of replacement was $428 each. I assess the damages at $2,568.

134     Maidstone also claims reimbursement for the accounts of Peralta and its solicitor, DeLuca, which it alleges were incurred as a result of Loosemore's failure to complete the project properly. Peralta's accounts are in block and include truck, mileage, disbursements and miscellaneous expenses in the global figure for services without separate figures for those amounts. The accounts do not give any indication of time spent whether by qualified engineers or other personnel nor are any hourly rates or any other method of calculation of the global figures given. The amount claimed against Loosemore is only in relation to remedial work. That amount was billed at $42,982.28. The Peralta accounts must be viewed on a quantum meruit basis. No evidence was called to support the reasonableness of these charges. In contrast, the account submitted by Rodger names each person involved with each person's job description, number of hours worked and hourly rate. Disbursements were set out separately. Although Maidstone has paid the Peralta accounts that does not automatically entitle Maidstone to recover the entire amount from Loosemore. Maidstone is only entitled to recover such amount as is reasonable.

135     With respect to Mr. DeLuca's account I have taken into consideration that he was called to the Bar in 1965 and is senior partner in his firm. In his account each item of work gives particulars of the time involved. Total hours were 54. His hourly rate of $200 is reasonable. Maidstone is entitled to recover his account of $10,800 from Loosemore.

136     In summary the total damages assessed against Loosemore are as follows:

Removal of Temporary Dam

7,490.00

Improper Fence Height North of Pump House

3,049.50

Replacement of Hollow Pipe, Tubing and
Handrails	1,364.25

Hollow Square Catwalk Supports	668.75
Standard Clip Fasteners		1,399.29

Structural Improvements for South Pump Wall

1,075.00

Structural Banding of Removable Sections of
Steel Floor Grating	100.00

Pump Basin Ladder

1,284.00

Stations 8+172 Headwall

3,210.00

Drain Excavation County Road 46 Bridge	1,926.00
Station 9+534 Tile Main Improvements	704.00

Station 7+135 Broken Crock Protection

417.30

Spraying

19,058.32

C.N.R. Bridge Concrete	2,671.13
Flap Gates Tile Mains	2,568.00

DeLuca Account

10,800.00

Total

$57,785.54

Credits Owing to Maidstone are:

Lilydale Ave. Deficiencies

2,900.00

Installation of Plywood in Place of
Particle Board	125.00

Grading and Filling Around Pump House

500.00

Granular Driveway Surface

483.00

Total

$4,008.00

As Loosemore has been paid in full it must pay $4,008 to Maidstone in addition to the damages.

5. Counterclaim of Loosemore Against Maidstone

137     Loosemore has filed a schedule setting out particulars of its counter-claim in the total sum of $10,144.49. I shall deal with it in the order of the items set out in its schedule (Exhibit 41).

138     (a) West Wall Tie Back Claim - $500. This was not approved by Regts. Installation was not necessary. This item is not properly claimed as an extra. The amount claimed is reasonable.

139     (b) Lowering Watermain Claim - $2,844.34. In April 1987 while excavating Loosemore damaged a watermain. I find that this was the result of its own negligence in failing to obtain the correct information as to the location of the water line from the appropriate utilities office. The specifications provided as follows:

"14. Responsibility of Damages to Utilities

The contractor's attention is drawn to the possible presence of utilities on this project. It is the contractor's responsibility to contact utility companies for information in regard to existing utilities, and to exercise the necessary care in construction operations, or take other precautions to safeguard the utility company from damage. The cost of all damages to utilities both overhead and underground caused by the contractor's operations shall be borne by the contractor."

140     Although the plans erroneously show the location of the main the contractor was contractually required to contact the appropriate utilities authority. Regts wrote to Loosemore about one month before the main was damaged reminding Loosemore to contact Bell Telephone and other utilities for the location of their lines. The effective cause of damage was the failure of Loosemore to confirm the location of the water main.

141     As it turned out the Water Board at this time wanted to have the main lowered at the same time as the main was being repaired. Loosemore did most of the repair and lowering of the main. The utilities authority would not permit Loosemore to fit the water line together as its policy was only to allow contractor Lloyd Clickner to do such work. Loosemore arranged for Clickner to fit the line together and paid Clickner $2,431.85. The evidence does not establish on a balance of probabilities that Loosemore's payment to Clickner was the result of lowering the main as opposed to repair work resulting from Loosemore's negligence.

142     Loosemore submitted particulars of the damage to its liability insurer dated July 21, 1987 and July 28, 1987. Mr. Loosemore testified that this was an estimate although it certainly appears to be a bill. It sets out a list of dates from April 29, 1987 to July 31, 1987 (which is after the date of the documents) showing that the number of men/hours and machine/hours each day together with the respective hourly rates and a dollar total for each day. The July 28, 1987 document ends "balance $5,415.00". Loosemore eventually settled the claim against its insurer for $4,955.66. Loosemore submitted a bill to Maidstone dated July 18, 1987 for "lowering water line on the 4th Concession Drain 3 feet deeper and 38 feet long. Due $9,000".

143     Maidstone had agreed to pay and did pay Loosemore $1,200 for supplying stone for the water main work. I find that Loosemore's claim for lowering the water main is suspect. No break-down of the $9,000 claim was given in evidence. No time records were produced to support the claim. Mr. Loosemore did not give any evidence as to how the global figure of $9,000 was arrived at. He claimed that the records were all destroyed and thrown out after the drain project was finished which was the usual procedure of the company when it finished all its contracts. He made no effort to give more information as to Loosemore's lowering costs by using the figures submitted to his insurer as a guide or an aid to his memory. I allow the sum of $8,000 as a fair and reasonable cost of lowering the water main. From this I deduct the sum of $1,200 paid for the stone and $4,955.66 recovered from his insurer, which deductions its counsel made in calculating its entitlement for this work. The net result is $8,000 minus $6,155.56 which equals $1,844.44.

144     (d) Ring Beam Claim $1,497.15 - Loosemore encountered difficulty in installing piling for the walls of the pump well. In order to correct its faulty work and put the walls back in line additional support was necessary. Regts designed a beam for this purpose which Loosemore installed. This expense arises out of Loosemore's failure to correctly install the piling. Had it done so in the first instance this expense would not have been incurred. Such expense must be borne by Loosemore. It is not recoverable from Maidstone as an extra.

145     (e) Automatic Oiler Claim $1,863.00 - The specifications called for automatic oilers for the electric motors in the pump house. William Loosemore failed to appreciate that these were not included in the supplier's quotation except at additional cost. He failed to add the extra price to Loosemore's tender and ordered the motors without realizing his mistake. Mr. Loosemore asked Regts to authorize them as an extra which Regts quite properly refused to do. This claim is without merit. The amount claimed was reasonable as the cost from the supplier was $1,500 plus G.S.T.

146     (f) Pump Vandalism Claim $3,400 - After the pump house was completed and went into operation a vibration problem began in one of the electric motors. Loosemore called in Sass Manufacturing Limited of Chatham, supplier of the motors, to diagnose the problem. Sass removed the problem motor and took it back to Chatham for inspection. However, they could find nothing wrong with it. Loosemore's workers assisted Sass in the removal. On the return of the motor from Chatham, Loosemore's workers re-installed it in the pump house at which time they found a tire stuck in the pump well. The pump house was equipped with a screen to keep any debris from floating from the drain into the pump well. That well had been pumped dry when the screen was installed and there was no tire in the well at that time.

147     It is Loosemore's position that the tire was thrown into the pump well by vandals and that it was not responsible for any resulting expense. Maidstone's position is that the tire floated into the pump well because the screen had not been properly installed. I find that vandalism of all sorts was an ongoing problem in all the areas of this project, particularly in and around the pump houses. In the absence of evidence as to the exact nature of any screen deficiency and its size which could support an inference that the tire if it could float, was of a size capable of getting past the screen. I find that it is more likely than not that the tire was thrown into the pump by a vandal or vandals. As the screen extended to the bottom of the drain I am unable to understand how a tire moving down the drain could get past it. Mr. Loosemore was present when Sass personnel were at the pump house. He also had two of his workers present, not to do any work, but merely to act as witnesses. Loosemore claimed $1,400 for its own labour plus $2,000 paid to Sass for a total of $3,400. Mr. Loosemore testified that the labour involved was 3 men x 24 hours each at $25 per hour. That works out to labour costs of $1.800. In my view the presence of two witnesses in addition to Mr. Loosemore was unnecessary. A reasonable amount for this claim is $2,600 made up of $2,000 paid to Sass plus 24 hours for Mr. Loosemore at $25 per hour.

148     (g) St. John Payment Claim $40 - In August 1988 Mr. Loosemore was asked by Regts to go back to the drain and do further brushing on the St. John property. Mr. Loosemore agreed and went to the St. John property with his equipment where he was met by Mr. St. John. St. John refused to let Mr. Loosemore on the property unless he got paid $40. St. John had a reputation for ejecting unwanted persons from his property with a shotgun. Loosemore felt he had no choice but to pay. He phoned the Township and was told it was alright to pay the money. He then paid St. John $40 and got a receipt. He then did the brushing requested. In these circumstances, fairness dictates that Loosemore be reimbursed. I allow this on the counter-claim.

149     Loosemore is entitled to judgment on the counter-claim for the following:

Water Main	1,844.44
Pump House Vandalism	2,600.00
St. John	40.00
Total	4,484.44

6. Loosemore Crossclaim Against Regts and Thames Valley

150     The only basis for the crossclaim for contribution and indemnity for any amount for which Loosemore might be liable to the plaintiff is pleaded as follows:

"17. This defendant states that it completed all of the work in a good and workmanlike manner in accordance with the plans and specifications provided to it by the plaintiff. This defendant further states that all of its work was inspected and approved by the co-defendants who were responsible for ensuring that this defendant's work was completed in accordance with the plans and specifications in a good and workmanlike manner.

18. This defendant states that it had performed work and services above and beyond that provided for in the aforesaid agreement as set out in paragraph 13. This defendant further states that all of the items referred to in paragraph 13 were directed by the co-defendants."

151     Paragraph "13" mentioned above in the crossclaim reads as follows:

"This defendant states that on or about March 25, 1987 it entered into an agreement with the plaintiff wherein it agreed to make improvements to the 4th Concession Drain and Pump Station outlet works in the Township of Maidstone. The amended contract price was $260,188.75".

The tenor of the crossclaim seems to be - if we did not perform the contract in a good and workmanlike manner it is because the engineers did not supervise us properly and approve our work when it was deficient. In my view this proposition is contrary to reason.

152     I find that Loosemore's failure to complete the work in a good and workmanlike manner was entirely due to its own shortcomings and inability to do so. This was a large and complex project which Loosemore lacked the skill and capacity to complete properly. Its work was below standard in the many areas I have already discussed in dealing with the plaintiff's claim. In short, in undertaking this project it bit off more than it could chew. For example, when it got into difficulty in construction of the pump house Regts had to suggest that Loosemore get advice from more experienced contractors and also designed a solution. The engineers were entitled to expect that anyone bidding on this project had the expertise necessary to carry it out. It was not the function of the engineers to teach Loosemore how to do the work. Regts made every reasonable effort in person, by phone and by letter to try to get Loosemore to improve its performance and to correct the deficiencies. That he was unsuccessful was no fault of his or Thames Valley. The crossclaim is dismissed.

7. Plaintiff's Action Against Regts and Thames Valley

153     The statement of claim alleges that these defendants were negligent or in breach of their agreement with the plaintiff in 6 ways set out as particulars:

"A. Failure to properly design the drain improvements required;

B. Failure to properly supervise and inspect the workmanship of the Defendant, Loosemore to ensure that the work was completed in accordance with plans and specifications and in a good and workmanlike manner;

C. Failure to make necessary design changes to ensure that the drain improvements were proper;

D. Designing gate opening structure, devices and lifting apparatus which were inadequate to safely lift the gates;

E. Failing to properly design the system in order that the outlet pipes were of proper construction and material to enable the flap gates to be installed.

F. Failing to properly design the pump well and structural framing for the support of the pump house and interior and exterior floor grating."

154     The plaintiff's claim against these defendants is restricted to averments of negligence and negligent performance of contract. No evidence was tendered by the plaintiff to allege that Regts and Thames Valley have breached their contract with Maidstone in any other way.

155     Counsel for these defendants submits that the standard of care to be met in all aspects of drainage work is set out in Section 11 of the Drainage Act which provides as follows:

"The engineer shall, to the best of his skill, knowledge, judgment and ability, honestly and faithfully, and without fear of, favour to or prejudice against any person, perform the duty assigned to him in connection with any drainage works and make a true report thereon."

156     Both Regts and Peralta agreed that this was the applicable standard of care. Counsel for these defendants relies on the words "to the best of his skill, knowledge, judgment and ability" as supporting the view that the standard of care is subjective. In the view I take of this case it is not necessary to decide if the standard under Section 11 is subjective or objective. Mr. Colautti further submitted that an engineer acting pursuant to his duties imposed upon him by Section 11 including construction of the works, in exercising his function as an engineer, acts in a judicial or quasi-judicial capacity.

157     The duties of an engineer under the Act are many in addition to the design and construction of the drain. He must file a report with the Municipal Council. The report must include the estimated cost of the work, an assessment of the amount or proportion of the cost to be assessed against every parcel of land and road for benefit, outlet liability and injuring liability, and allowances, if any, to be paid to the owners of land affected by the drainage works. Considering the scheme of the Act, in my view, it is only in these latter functions which affect the rights and costs of owners that the engineer acts in a judicial or quasi-judicial capacity. In designing the drainage works the engineer acts only in a technical capacity.

158     In any event, regardless of the capacity in which the engineer is functioning, it is his duty to act impartially.

159     Dealing firstly with Section 11 of the Drainage Act I find that Regts performed his duties and responsibilities honestly and faithfully to the best of his skill, knowledge, judgment and ability without fear of favour or prejudice against any person. He exercised his best judgment impartially throughout.

160     The work in question involved a long and complex drainage system. There were many ratepayers with strong opinions assessed. There was a change in the councillors between the start and finish of the project and there was a contractor whose work may not have been the worst Regts had seen. It was certainly nowhere near the best. That said, Regts got the best performance of the contractor that the contractor was capable of giving. In the midst of these conflicting interests, Regts worked hard to arrive at a fair balance with honesty, integrity and impartiality. No inference to the contrary may be drawn from the Tribunal's order that he pay costs of $1,500. The Tribunal erred in making such an order without notifying Regts of an intention to do so and not giving him an opportunity to make submissions on that issue. To make such an order in those circumstances was a denial of natural justice.

161     Assuming that the engineer's standard of care is objective, the engineer owes a duty to exercise the skill, care and diligence which may be reasonably be expected of a person of ordinary competence measured by the professional standard at the time. The engineer is to be judged by the professional standards prevailing at the time the work was done, not by what may be known or accepted at a later date or what may be seen only with the benefit of hindsight. There is a distinction to be drawn between an error in judgment and negligent misconduct - see McLachlin, Wallace and Grant, Canadian Law of Architecture and Engineering, Second Edition at pages 101 and 102.

162     The plaintiff has failed to call any admissible evidence to express any opinion that the engineering standard of care fell below the standard of competence of professional engineers.

163     Two civil engineers testified for the plaintiff as to deficiencies in the work performed by Loosemore. Neither were asked and neither offered any opinion that any act or omission on the part of Regts and/or Thames Valley in any way fell below the standard of care with respect to the allegations of negligence against them. Neither said that any of Maidstone's damages were caused or were contributed to by Regts or Thames Valley. Rodger gave evidence as to the problems he observed in the concrete work under the C.N.R. bridge. He was not asked and did not venture any opinion as to whether or not those problems arose out of the design, the insufficient thickness of concrete or the engineer's supervision of the work. Again, so far as design is concerned the drain has continued to function in the way in which it was intended to do without any problem for the past 8 years.

164     B. Failure to properly supervise and inspect - In his report to council on October 16, 1986 Regts outlined his cost estimates for the various parts of the project. Regts estimated $1,500 as engineering fees for letting and superintending and if necessary restaking. Regts did not allow for very many site visits. In the past the only inspection was on completion of the project. Regts was not in the beginning asked to provide for detailed onsite inspection. His report was approved by council. Regts told council it was a fairly complex project taking 4 or 5 months to complete. He also told council that Thames Valley probably ought to do daily inspection. However, council did not require that and felt they could handle it through their own inspector, Pelletier, who lived nearby in Emeryville. Having made that decision Maidstone ought not now to be allowed to complain about the lack of frequency of Thames Valley's supervision and inspection. As I noted before Thames Valley assigned John Verkaik, an engineering technician, and Rick Gritter, an engineer, to do onsite supervision and inspection. Exhibit 34 is list of days on which the two were onsite. In addition Regts was onsite from time to time on the way to and from jobs in Windsor. Approximately 44 of Verkaik and Gritter's written reports were tendered in evidence. It must also be borne in mind that cost was a consideration in the design and carrying out of this project. Funds were not unlimited and council had to answer to the assessed owners who, I infer, were interested in keeping the cost and their assessments as low as possible. Regts had the financial interests of the owners in mind. He opted for pump motors with a smaller capacity when he found cheaper models which would perform adequately. He also saved money by using a private contractor to do the electrical hook-up instead of Ontario Hydro whose charges he considered to be excessive.

165     The law with respect to supervision and inspection is summed up in McLachlin, Wallace and Grant, Canadian Law of Architecture and Engineering, Second Edition, at pages 126-128:

"Unless the contract between the architect or engineer or owner provides otherwise, the architect or engineer must supervise the work and inspect it sufficiently often to ensure that the project is being constructed in conformity with the plans and specifications and the contractor's contractual obligations. Failure to discharge this duty may render the architect or engineer liable to the project owner for damages.

This duty of supervisions does not mean the architect or engineer should tell the contractor how the work is to be done; That is normally the contractor's prerogative. Similarly, it is the contractor's duty to build the project in accordance with the plans and specifications and to see that all stages of the work have been properly executed. The architect's or engineer's duty is to the owner. What is contemplated supervision as the owner's representative to ensure that the resultant product accords with the stipulated design. Careful supervision may also assist the architect or engineer by lessening the chance that the design will be blamed for a deficiency resulting from improper construction procedures.

Architects and engineers are required to exercise reasonable care, skill and diligence in supervising the work entrusted to them. On the other hand, they do not guarantee that every departure from the design will be noted and corrected, only those that reasonable supervision will disclose.

The level of supervision required is such as will enable the architect or engineer to certify that the work of the contractors has been executed according to plans and specifications to the extent that reasonable supervision will disclose such to be the case. The more extreme the consequences and the greater the risk, the higher the duty of care. The supervising architect or engineer must give the project such attention as the nature and difficulty of the work reasonably demand...

Architects and engineers are not obliged to supervise everything done on the site. They cannot be constantly at the project, supervising each detail. However, at a minimum they, or someone representing them, should be in attendance for critical phases of the work and should inspect important aspects of the work before they are hidden from view."

166     It is to be emphasized that council chose to have Pelletier undertake the major weight of the responsibility for supervision and inspection. Not unreasonably, Loosemore's low standard of performance would call for more frequent and more detailed inspections by Pelletier. However, council must have been aware of Loosemore's low level of performance from the deficiency list filed by Regts, the failure of Loosemore to complete in 20 weeks and the damage to the watermain. It was open to council to reverse its previous decision, suspend Pelletier from this task and request Thames Valley to increase its supervision and inspection. Council, however, did not choose to do so.

167     Having regard to Loosemore's performance, I find it likely that no amount of increased supervision and inspection would have improved the level of its work.

168     In determining the standard of care on this aspect regard must be had to the respective responsibilities of the Township Inspector and the consultant under Maidstone's Drainage By-Law 3699-89. Regts relied, and was entitled to rely on the ongoing information received from Pelletier.

169     A review of the evidence called by the plaintiff relevant to each of the six allegations of negligence reveals no evidence to support the allegations. Peralta did an inspection and assessment of the entire project after completion.

170     A. Failure to properly design the drain improvements. Peralta was silent as to this allegation.

171     B. Failure to properly supervise and inspect. Peralta said nothing in examination in chief. Regts testified later as to the extent of supervision and inspection. Regts testified as to the standard of the Township and asserted that he had met it. Peralta later testified in reply. He was not asked if the inspection or supervision met the professional standard of care, nor did he volunteer any opinion on the topic.

172     C. Failure to make necessary design changes to ensure that the drain improvements were proper. There was no professional evidence in these terms and no professional evidence that such fell below the appropriate standard of care. In the absence of such evidence I am unable to make a finding of negligence.

173     D. Design gate opening structure, devices and lifting apparatus. Peralta made no criticism of the design, but of the construction. However, Regts had them removed and replaced at his own expense. I infer from this act a consciousness of design error on the part of Regts and an admission of the same. However, as the Township suffered no loss as a result, no damages are recoverable against Regts nor against his employer Thames Valley.

174     E. Failing to design the system in order that the outlet pipes were of proper construction. There was no professional evidence in these terms and no professional evidence that such fell below the appropriate standard of care. In the absence of such evidence I am unable to make a finding of negligence.

175     F. Failing to design the pump well and structural framing for the support of the pump house and exterior and interior floor grating. There was no professional opinion that such fell below the appropriate standard of care. I am unable to make a finding of negligence on the evidence.

176     In my view the plaintiff has failed to prove any negligence on the part of Regts or Thames Valley. The action against them must be dismissed.

8. Regts and Thames Valley Crossclaim Against Loosemore

177     Having found no liability against these two defendants, there is no basis for any claim over against Loosemore for contribution or indemnity. This cross claim is dismissed.

9. Regts and Thames Valley Third Party Claim Against Simcoe & Erie

178     Mr. Colautti submitted that Simcoe & Erie is bound to perform Loosemore's work in the event that Loosemore failed or refused to perform it and that if Loosemore is bound to complete any deficiencies then Simcoe & Erie, as surety, is also bound.

179     Loosemore is described in the bond as principal, Simcoe and Erie is described as surety and Maidstone is described as obligee.

180     The contract provides that Loosemore and Simcoe & Erie are held and firmly bound unto the Corporation of the Township of Maidstone as:

"...Obligee, in the amount of -- two hundred and thirty-four thousand, nine hundred and thirty-five -- 75/100 dollars (S 234,935.75) lawful money of Canada for the payment of which sum, well and truly to be made the Principal and the Surety bind themselves their heirs, executors, administrators, successors and assigns, jointly and severely, firmly by these presents.

Whereas, the Principal entered into a written contract with the Obligee dated the ... day of ..., 19.. for fourth concession drain improvements and a pumping station outlet. In accordance with the Contract Documents submitted therefore which are by reference made part hereof and are hereinafter referred to as the Contract.

Now, therefore, the condition of this obligation is such that if the Principal shall promptly and faithfully perform the Contract then this obligation shall be null and void; otherwise it shall remain in full force and effect.

Whenever the Principal shall be, and declared by the Obligee to be, in default under the Contract, the Obligee having performed the obligee's obligations thereunder, the Surety may promptly remedy the default, or shall promptly

(1) complete the Contract in accordance with its terms and conditions or

(2) obtain a bid or bids for submission to the Obligee for completing the Contract in accordance with its terms and conditions, and upon determination by the Obligee and the Surety of the lowest responsible bidder, arrange for a contract between such bidder and the Obligee and make available as work progresses (even though there should be a default, or a succession of defaults, under the contract or contracts of completion, arranged under this paragraph) sufficient funds to pay the cost of completion less the balance of the Contract price; but not exceeding, including other costs and damages for which the Surety may be liable hereunder, the amount set forth in the first paragraph hereof. The term 'balance of the Contract price,' as used in this paragraph, shall mean the total amount payable by the Obligee to the Principal under the Contract, less the amount properly paid by the Obligee to the Principal.

Any suit under this Bond must before instituted before the expiration of two (2) years from the date on which final payment under the Contract falls due.

The Surety shall not be liable for a greater sum than the specified penalty of this Bond. No right of action shall accrue on this Bond, to or for the use of, any person or corporation other than the Obligee named herein, or the heirs, executors, administrators or successors of the Obligee."

181     Firstly there is no evidence that Loosemore was ever formally declared in default by Maidstone, although it was threatened. Secondly, Regts and Thames Valley are strangers to the bond. Neither is a party to the bond. Neither has any right to sue under the bond at common law - Dunlop Tyre v. Selfridge [1915] A.C. 847. Neither was entitled to any benefit under the bond nor was there ever any intention of the parties to give either Regts or Thames Valley any benefit under the bond. Under the terms of the bond only Maidstone has a right to sue on it. For whatever reasons, Maidstone has not chosen to do so. That does not give either Regts or Thames Valley any right to do so. In any event neither Regts nor Thames Valley are liable in damages. They therefore have no claim over for contribution or indemnity. The Third Party action is therefore dismissed.

ZALEV J.

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