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WATER LEAK MANAGEMENT 101 – CONDOMINIUM BUILDINGS

By Denis Gagnon, P.Eng.  / Mar. 03, 2024

From pipe leaks and bursts, to window, façade and roof leaks, to HVAC system issues and sprinkler system malfunctions, water damage in condominium buildings remains a pervasive problem. In 2014, the Canadian Institute of Actuaries reported that 48% of home insurance claim payouts were related to water damages, ahead of fire and theft. Based on their 2018 cross-Canada survey of over 3,000 respondents, the Desjardins Group also found that water damage remains the number one cause of loss among homeowners. Yet, according to the same Desjardins Group survey, 43% of respondents weren’t aware of the potential sources of water leaks or how to prevent them. This article attempts to shed light on the issue of water damage related to water leaks in condominium buildings.

 

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Water Contamination Level and Extent of Damage

Responding to water contamination from leaks involves:

  • Classifying the water.
  • Implementing appropriate safety measures.
  • Performing cleanup and remediation to restore a safe and habitable environment.

Water contamination from leaks in condo buildings is typically classified by the source and nature of the water contamination, with each water source impacting the cost of remediation differently. Water contamination classification can help establish the severity of contamination and guide the appropriate response and remediation measures. In addition, water contamination classification helps assess the cost of remediation. Professionals generally classify the water source into the following three categories:

Clean Water – Clean or white water refers to water that does not pose an immediate health risk. Clean water typically originates from sanitary or hygienic sources like leaking domestic cold or hot water pipes, sink(s) or bathtub overflows, appliance malfunctions, rainwater and melted snow. While clean water may not contain harmful contaminants initially, it can become contaminated if left untreated or if it comes into contact with other materials.

Grey Water – Grey water contains some level of contamination that may cause discomfort or illness if ingested. This type of water may originate from washing machines, dishwashers, or clean toilet bowls. While it is not as hazardous as black water, proper handling and cleanup are necessary to prevent further contamination and potential health risks associated with grey water.

Black Water – Black water is highly contaminated and poses a significant health risk as it may contain pathogens, toxins, and other harmful substances. Sources of black water include sewage backups, flood waters, and water from sources with a high risk of contamination. Cleanup and restoration efforts for black water incidents require specialized training and equipment due to the severe health risks associated with exposure.

To minimize health risks and additional property damage, it is crucial that unit owners and building managers address water leak damages promptly and that professionals be engaged when dealing with contaminated water.

Causes of Water Leaks in Condo Buildings

Although water leaks and damage are not exclusive to condominium buildings, their occurrence in condominiums can have significantly more impact than in single-family dwellings. In fact, due to the vertical nature and design of condominium buildings, a water leak in a condo unit can negatively impact units adjacent to and below the affected unit. Water leaks in condo buildings can also impact the building’s common elements, shared utilities, and structural elements.

Water leaks and water damage can occur in high-rise and low-rise condominium buildings, and the potential risks of water damage may vary based on factors such as construction, location and maintenance. The causes of water leaks are often related to materials, installation, maintenance and operational issues. Some of the most common sources and causes of leaks affecting condominium buildings include:

Pipe Leaks and Bursts – Pipe leaks and bursts in domestic, storm, rain and waste piping in condominium buildings can significantly and negatively impact multiple building floors. The causes of pipe leaks in condominium buildings may be due to aging or corroding pipes, high water pressure, water hammering, freezing and thawing, poor design or installation, inadequate pipe support, improperly sealed, connected or soldered joints, pipe blockages and clogs, material defects, external damage, and lack of maintenance.

Roof Leaks – Because high-rise condominium buildings often have flat roofs, they are susceptible to water pooling and leaking through roof membranes, often leading to water infiltration into multiple units. Some of the more common causes of roof leaks include improper design, poor roof installation, lack of maintenance, bird or pest damage, aging roof materials, damaged flashing, cracked roof membranes, sealant deterioration, ice dams, structural movement, and water penetration at poorly sealed rooftop HVAC systems, vent pipes and skylights.

HVAC System Issues – Heating, Ventilation and Air Condition (“HVAC”) systems in condominium buildings are complex systems having many components. Depending on the design and requirements of the system, various fluids, including water, brine, and glycol, are used in HVAC systems. Refrigerants and oil may also still be used in older HVAC systems. HVAC components vary based on the condominium building requirements but generally include heat pumps, air handling units, fan coil units, cooling towers, boilers, humidifiers, dehumidifiers, pumps, valves, piping and ductwork. Leaks in HVAC systems can be due to poor design or component installation, condensate drain blockage, faulty condensation pans, refrigerant leaks, poorly sealed ductwork, frozen evaporator coils, improperly installed or damaged insulation, faulty pumps and seals, excessive humidity, corrosion of components and piping, vibration and movement, and poor maintenance practices.

Sprinkler System Malfunctions – High-rise condominium buildings typically have sprinkler systems for fire protection, and malfunctions can cause unintended water releases. Common causes of water leaks from fire sprinkler systems include corroding metal pipes, fittings and components, freezing and thawing, mechanical damage, faulty sprinkler heads, water hammering, faulty valves, aging components, seal and gasket deterioration, improper installation or system modification, and lack of regular maintenance.

Window and Façade Leaks – Window and facade leaks in condominium buildings can result from various design, construction, and maintenance factors. The leading causes of window leaks in high-rise condominium buildings include poor window installation, damaged or missing sealant, inadequate flashing, cracked or damaged facade materials, defective window frames, faulty joints and connections, lack of waterproofing, material deterioration, building movement, and insufficient maintenance.

Basement Flooding – Condominium buildings may have basements prone to flooding, especially in areas with a high water table. Common reasons for water-related issues in the foundations and basements of condominium buildings include poor drainage systems, high water tables, cracked foundation walls, poor waterproofing, lateral pressure from soil, sewage line backups, surface water runoff, faulty sump pump systems, foundation settling or shifting, cracked basement floors, and plumbing leaks.

Appliance Leaks – Household appliances, including dishwashers, washing machines, water coolers, ice makers, water filters and water boiler tanks, can leak and cause water damage within condominium buildings. Common causes of appliance leaks include overloading of washing machines, clogged water and drain lines, defective or corroded fittings, seals and pumps, faulty pressure relief and bypass valves, frozen evaporator coils in air conditioners, damaged water softener resin tanks, worn-out seals, aging wax seals in toilet bowls, leaking toilet tanks or bowls, and aged seals and loose connections in faucets.

Preventative Measures and Maintenance

Although many water leaks are out of the control of condo owners and building management – like a toilet overflowing in a unit – many water damage claims can be prevented by taking proactive steps to reduce the risk of water damage. By adopting preventative measures, performing regular inspections and maintenance, and promptly responding to issues, unit owners and building management can help lower the risk of water damage in condominium buildings.

Unit Owners

Unit owners should begin by learning what water damage looks like. Unit owners should also learn how to identify and address potential sources of water-related problems and, in an emergency, know how to turn off the water. In addition, unit owners should learn how to invest in regular home maintenance. Simple steps to reduce the risk of water leaks and damages include:

  • Installing leak detection sensors, automatic water shut-off devices, and HVAC system switches.
  • Placing a drain pan under washing machines and flexible water supply lines.
  • Avoiding overloading washing machines.
  • Checking for corroded pipes and damaged hoses.
  • Checking dishwasher door seals.
  • Replacing aged water heaters and appliances.
  • Repairing or replacing leaking faucets and toilets.
  • Setting the heat at a minimum of 18° in units that serve as secondary homes or are unoccupied for extended periods.

 Building Management

Condominium building managers are the first line of defence against water-related building damage and play a crucial role in preventing water leaks in condominiums. Building managers should proactively implement leak prevention programs to reduce the risk of water leaks. Leak prevention programs may include:

Regular Inspection – Implementing a routine inspection schedule for all key areas prone to leaks, including roofs, windows, foundations, plumbing systems, and common areas. Maintaining a log of leakage occurrences can be very helpful in diagnosing the cause of leaks. Logs should include photos and information such as location of the leak(s), time of day and environmental conditions.

Maintenance Programs – Establishing a comprehensive maintenance program for plumbing systems, including regular checks for leaks, pipe integrity, and proper HVAC and fire sprinkler system functioning.

Proper Construction and Installation – Ensuring the construction and installation of building components, such as roofs, windows, and plumbing systems, meet industry standards and best practices.

Waterproofing – Periodically investing in proper exterior surface and basement and foundation waterproofing to prevent water infiltration.

Landscaping and Grading – Ensuring the landscaping and grading around the building directs water away from foundations and that the drainage system is functioning effectively.

HVAC System Maintenance – Regular service and maintenance of HVAC systems to prevent leaks from cooling towers, riser pipes, air conditioning units, and associated components.

Sump Pump Maintenance – If applicable, periodically testing and maintaining sump pump systems to ensure they function correctly in case of flooding.

Pipe Insulation – Insulating pipes, especially those in unheated or exposed areas, to prevent freezing and potential bursts.

Emergency Response Plan – Developing and communicating an emergency response plan for water leaks and ensuring staff and residents know the proper steps to take in case of a water leak.

Education and Awareness – Educating residents about water conservation practices and the importance of promptly reporting leaks.

Tenant Education – Providing tenants with guidelines on properly using and maintaining plumbing fixtures and appliances to reduce the risk of water leaks.

Up-to-date Records – Maintaining up-to-date records of building systems, including plumbing, roofing and HVAC systems, to facilitate efficient and targeted maintenance.

Monitoring and Technology – If possible, installing water monitoring systems or leak detection technology to identify issues early.

Emergency Shut-Off Procedures – Ensuring that residents and staff know the location and proper use of emergency shut-off valves for water supplies.

Collaboration with Professionals – Working closely with qualified contractors, engineers, and other professionals to assess and address potential vulnerabilities.

By adopting a proactive and systematic approach to building inspection and maintenance, condo building managers can significantly reduce the risk of water leaks and damage. Regular inspections, preventative maintenance, and an emphasis on resident education can help mitigate water-related issues and leaks within condominium buildings.

Condo Flood Liability

When a leak or flood in a unit causes water damage to a lower or adjacent unit, the responsibility for the cost of repairs typically depends on the circumstances and the specific regulations outlined in the condominium building’s governing documents and bylaws. Responsibility for damage from a water leak can also depend on the terms of the rental agreement in the case of a rented unit.

Generally, the condo corporation’s insurance policy will cover repairs to structural elements, shared utilities and common areas, even when a unit within the building is the cause of the damage. If the water damage results from a common element failure, the corporation’s insurance will usually cover the cost of repairs. The corporation’s bylaws may determine the responsibility for the deductible, which can be shared among affected unit owners or borne by the unit owner where the leak originated.

If you are a condo unit owner, and in the absence of negligence or a specific bylaw making a unit owner liable for water leaks causing damage to your unit, you and your insurer are generally responsible for the cost of the water damage. You must also pay your insurance deductible.

It is advisable for both unit owners to promptly report water leak damages to the property management or condo board. Owners should also quickly report water leaks to their insurance companies, who can investigate the cause of the damage and determine liability based on the specific circumstances of the incident.

Legal advice may be sought to clarify responsibilities and rights in complex cases or when it is suspected that a party may have breached a statutory, regulatory or contractual obligation, technical standard or best practice during the installation, maintenance or operation of some of the condo building’s structural or mechanical elements.

THE ROLE OF THE FORENSIC ENGINEER WHILE EVALUATING A CLAIM

Denis Gagnon, BSc., P.Eng. / Jan. 07, 2024

The process of validating an insurance or legal claim is multi-faceted. Forensic engineers and expert witnesses use several engineering principles and methods to investigate and analyze incidents and failures that may form the basis of insurance and legal claims. These procedures generally include:

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Site Investigation(s) and Evidence Collection-Preservation: Site investigations can help in understanding and determining the cause of an incident or failure and the extent of the damage(s) or loss(es) related to a claim. During their on-site investigations, forensic engineers examine the location, gather physical evidence, and document the scene through photographs, sketches, and notes for subsequent analysis. The collection and preservation of evidence may include structural and plumbing components, mechanical, electrical and other equipment, documents, and other relevant artifacts.

Analysis: The use of engineering principles, tools, and software to analyze the collected evidence can help while trying to determine the root cause of an incident. For instance, structural analysis, material testing, or failure analysis techniques are often employed to assess the integrity or performance of equipment and materials involved in a claim. The forensic engineer’s expertise can significantly assist in interpreting technical data and providing insights into the cause of an incident and the extent of the damage(s) or loss(es). Conducting tests or experiments to replicate conditions of failure related to a claim can also be beneficial and help validate hypotheses about the behavior of materials or structures under specific circumstances. In addition, collaboration with professionals from related fields, such as architects, geologists, metallurgists, or safety experts, can help provide a more comprehensive view while analyzing the validity of a claim.

Document Review: Examining technical documents, such as design plans and drawings, maintenance records, and specifications, can provide essential information for comparison and analysis and for determining if the incident aligns with the provided information. The document review process also typically involves reviewing laws, codes, technical standards, industry best practices and contracts to assess whether the parties met their statutory, regulatory, and contractual obligations.

Reporting: Summarizing findings and conclusions in a detailed, well-documented report is crucial. Presenting the observations, findings, analysis, and expert opinions clearly and understandably is essential for supporting the validity of an insurance or legal claim.

By combining the abovementioned methods and techniques, experienced forensic engineers and subject matter experts can be invaluable assets during the investigation of insurance and legal claims. Based on sound technical and engineering principles, forensic engineers can help validate a claim’s accuracy by evaluating evidence, providing detailed analysis and expert opinions, determining whether there may be third-party liability, and assessing the extent of damage(s) and coverage.

Finally, all claims, including insurance claims, should be investigated and treated as intended for the Courts, meaning with fairness, objectivity and non-partisanship while avoiding speculation and conjecture.

SITE DEMOLITION - CONTRACTOR LIABILITIES

By Denis Gagnon, BSc., P.Eng. / Mar. 22, 2023

In a 2022 Ontario Superior Court of Justice decision, the Court found that contractors and subcontractors owe a high standard of care at project sites. In Priestly Demolition Inc. v. Walsh Construction Company Canada (2022 ONSC 5071), the trial judge found that Priestly and Walsh failed to meet the high standard of care required during demolition work at the City of Toronto’s [the “City“] Ashbridges Bay Wastewater Treatment Plant [the “Plant“]. The case centred around the standard of care owed by contractors and subcontractors regarding unknown site conditions and liability for damages due to the subcontractors’ negligence.

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Background

In 2013, the City of Toronto retained Walsh as the general contractor for a project at its wastewater treatment plant. Walsh subsequently engaged Priestly as its demolition subcontractor to demolish the Odour Control Building [the “OCB“] at the Plant, which included the OCB’s Motor Control Center [the “MCC“] room.

The trial arguments centred around damages to an old duct bank and power interruption to the Plant’s digester tanks. The duct bank extended from an electrical power substation to the digester tank tunnels at the Plant while running under and supplying power to the MCC room of the OCB. The remainder of the duct bank cables provided power to the Plant’s digester tanks.

In the summer of 2019, Priestley began demolition of the OCB after the City confirmed to Walsh via a Shutdown Request Notification [“SRN”] that all services to the OCB had been isolated. However, unbeknown to Priestly, only the cables to the MCC room were disconnected. The remainder of the power cables inside the ductbank continued to provide power to the Plant’s digester tanks when the demolition began.

During demolition, Priestly’s operator encountered the old duct bank and severed several live cables leading to the digester tanks. The remedial work to repair the old duct bank and restore power to the plant cost Walsh $866,680.72. Although Priestly continued its work, they were not paid for all rendered invoices due to the damage done to the old duct bank. Priestly registered a lien for $390,953.95.

The Trial Decision

The Court found that Priestly breached the Subcontract, failed to meet the required high standard of care, and was negligent during demolition work. The trial decision was based on Priestly’s neglect to review the Subcontract drawings and existing utilities locates, obtain utilities locates to find, mark and protect the duct bank, confirm which duct bank cables were disconnected before demolition work began, and have a supervisor present while proceeding with demolition work. The trial decision was also based on Priestly’s failure to stop work when the duct bank was first encountered.

The Court also found that Walsh owed a high standard of care and that Walsh was negligent by failing to review Priestly’s demolition plan, ensure the duct bank was protected, and communicate its knowledge regarding the existence of the duct bank to Priestly. The Court assigned 85% and 15% of the fault to Priestly and Walsh, respectively.

Key Takeaways

This case highlights the importance of thorough document review, obtaining and understanding utilities locates, communicating and seeking clarification about the scope of work, and stopping work when unforeseen circumstances are encountered on project sites. This case also serves as a wonderful reminder to contractors and subcontractors that a failure to meet the required high standard and due diligence on project sites can result in substantial financial impacts.

ALL ABOUT NOISE - A GUIDE TO ONE OF THE MOST COMMON CONDO COMPLAINTS

By Mina Tesseris, P.Eng., LEED AP, LCCI and Denis Gagnon, BSc., P.Eng. / Oct. 18, 2023

Noise is a common complaint among occupants of residential condominium buildings. Resolving these complaints requires an understanding of how sound moves through a building and what are the obligations of a condominium when addressing the complaints.

Addressing Noise Complaints

Here are some of the common questions that may arise when a condominium faces a noise issue:

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How does the Ontario Condominium Act and its regulations address noise? The Ontario Condominium Act, 1998, and its associated regulations do not provide a strict definition of “noise nuisance.” However, they set out the framework for condominium governance and dispute resolution, including addressing issues like noise complaints.

How do the condominium declaration and rules address noise? The condominium declaration is a legal document that outlines the rights and responsibilities of unit owners and the condominium corporation. It may include provisions related to noise control or restrictions on certain activities. Condominium corporations can establish specific rules and bylaws that address noise-related matters. These rules may set acceptable noise levels, quiet hours, and procedures for handling noise complaints. Particular details may also vary depending on the individual condominium corporations’ bylaws, rules and declarations.

When is noise considered a nuisance? Noise is generally considered a nuisance when it interferes with a resident’s peaceful enjoyment of a unit. Common examples of noise nuisances include loud music, barking dogs, loud parties, and construction noise during restricted hours.

What are the primary considerations when a noise complaint is received? Balancing the interests of residents is essential. Condominium corporations must consider the rights of unit owners to use their property as they see fit while also ensuring that noise and other disturbances do not unduly disrupt the rights of other residents. The condominium corporation must also consider their declaration, rules and bylaws when dealing with a noise complaint.

What are the condominium’s roles and responsibilities in dealing with a noise complaint? Condominium corporations must enforce the corporation’s declaration, rules, and bylaws. These declarations, regulations and bylaws include addressing noise complaints and taking steps to resolve disputes. The condominium corporation may issue warnings, fines, or penalties for repeated noise violations.

How can a condominium manage noise complaint claims effectively? Clear communication between residents and the condominium corporation management is essential when addressing noise complaints. Residents should first try to resolve minor noise issues directly with their neighbours whenever possible. When noise complaints cannot be resolved, residents are encouraged to document and record the noise complaints and their dates and times and provide descriptions of the disturbances.

The condominium management should investigate noise complaints subjectively to determine their validity. The investigation of noise complaints may involve consulting experts, such as acoustics engineers. Alternative dispute resolution methods, such as mediation, should be used before resorting to legal action. Legal action through the Condominium Authority Tribunal (CAT) or the Courts may be necessary when all else fails.

Both residents and condominium corporations must be aware of the rights and responsibilities regarding noise nuisances, as outlined in the condominium’s governing documents and applicable bylaws. Legal advice and guidance from a lawyer experienced in condominium law may be necessary to navigate complex noise complaints effectively. It is, therefore, essential to consult legal counsel for advice tailored to specific situations that cannot be addressed by other means.

How Does Sound Move Through a Building?

Addressing a noise complaint requires identifying the source of the noise and how it moves through the building to reach the affected occupants. Sometimes, identifying the source of the noise can be difficult, especially if it originates from mechanical equipment. Sound moves through a building in two ways. It can transmit through the air and also through the building structure.

1) AIRBORNE SOUND

Airborne sound transmission refers to the propagation of sound waves through the air from one source to another. This type of sound transmission occurs when sound waves travel through the air and are detected by the human ear or other sound receptors. Examples of airborne sound include human conversations, music, television and radio, appliances, traffic, etc.

Airborne sound can travel through building components such as walls, floors, windows, and doors and can also travel through openings, gaps, or penetrations in these components. The ability of building components to block or attenuate airborne sound is an essential consideration in architectural and acoustic design.

Various soundproofing techniques and materials can reduce airborne sound transmission between spaces. These techniques include adding insulation within walls or ceilings, using double or triple-glazed windows, sealing gaps in cracks, employing acoustic barriers and isolators, and using sound-absorbing materials like acoustic panels and ceiling tiles.

Sound Transmission Class

Sound Transmission Class (STC) is a rating system used to classify the resistance of building partitions, including walls and floors, to airborne sound transmission. For example, at an STC rating of 25, soft speech can be understood through walls or floors. At an STC rating of 50, normal speech is not audible. An STC rating of 65 signifies superior soundproofing.

The STC rating is not specific to the type of building material (e.g., wood or steel). Instead, the STC rating evaluates the overall sound transmission resistance of the system as an assembly of materials. STC ratings typically apply to various types of building construction, including wood-framed buildings. The higher the STC rating, the better the assembly’s ability to reduce airborne sound transmission.

Below are some general STC ratings for common wall and floor constructions found in wood-framed buildings. Wood-frame buildings are light, so they tend to transmit more low-frequency noise than most building assemblies made of heavier materials. For example, a wood frame wall will typically transmit more low-frequency noise than one constructed of concrete. Wood-frame buildings

have wall and floor assemblies constructed of multiple elements, which are susceptible to changes or errors in their installation in the field. They also have discontinuities that create flanking paths for sound to bypass or “short-circuit” the solid portion of the assemblies. As a result, the STC rating assigned to the assembly is a theoretical rating that may not be achieved in practice.

Wood-Stud Wall with Drywall on Both Sides: A typical wood stud wall with drywall on both sides may have an assigned STC rating in the range of 30 to 45, depending on factors such as wall thickness, insulation and the quality of the construction.

Double-Layer Drywall: Adding a second layer of drywall on one or both sides of a wall can significantly improve sound insulation. This may achieve assigned STC ratings in the range of 45 to 60 or higher, depending on the specific configuration.

Insulation: The use of acoustic insulation within wall or floor cavities can further improve STC ratings by reducing sound transmission through the assembly. The effectiveness will depend on the type and thickness of insulation used.

Specialized Wall Assemblies: In some cases, specialized wall assemblies, such as staggered stud walls or resilient channels, may be employed to achieve higher assigned STC ratings. These assemblies are designed to minimize sound transmission.

Floor-Ceiling Assemblies: For floors in wood-frame buildings, similar principles apply. The combination of subflooring, joist spacing and sealing materials can be used to achieve specific assigned STC ratings.

2) STRUCTURE-BORNE SOUND

Structure-borne sound is distinct from air-borne sound. While airborne sounds travel through the air, structure-borne sounds generated by impact or mechanical equipment can transmit vibrations through building structures.

Impact noises occur when an object contacts a structural element. The impact force causes vibrations that propagate through the building materials and are heard as noise in adjacent areas. Footsteps and furniture movement on the floor are examples of impact noises.

Often, structure-borne noises are generated by mechanical equipment and systems, and are often felt or heard in adjacent places. Typical mechanical equipment leading to structure-borne sound transmission includes HVAC systems, elevators, garbage chutes, generators, industrial machinery, pumps and motors, commercial kitchens, and fitness equipment.

Various measures can be taken to mitigate structure-borne sound transmission from mechanical equipment, such as isolation, acoustic barriers, decoupling, soundproofing, and regular maintenance. Mitigating structure-borne sounds may require different approaches than those used for mitigating airborne sounds.

Impact Evaluation Class (IEC)

IEC is a classification system that assesses the potential for structure-borne sound transmission in building elements, like floors and walls. This classification is particularly relevant in the context of sound insulation and acoustic design in buildings and to evaluate how well the building component or construction assembly can mitigate the transmission of impact sounds.

IEC comprises several categories, often denoted by letters (e.g., IIC, ICC, IBC). The exact categories and naming conventions may vary depending on the specific standards or guidelines used in a particular region. For example, the impact insulation class (IIC) is commonly used to measure floor-ceiling assemblies’ impact sound insulation performance. The IIC rating represents the ability of a floor-ceiling system to reduce the transmission of impact sounds from one floor to another.

Finally, when dealing with structure-borne sound transmission through building structures from physical impacts, the IEC classification system can be used to assess the ability of building elements to reduce the transmission of these impact sounds. The IEC classification aims to inform architects, builders, and occupants about how effectively a particular construction assembly can minimize the transmission of structure-borne noise within a building.

Building Code Requirements

Wood-frame buildings are susceptible to flanking path sound transmission whereby sound travels through openings or discontinuities such as the intersections of floors and walls, service outlets in walls, ducts, or anywhere smoke can travel.

These flanking paths allow sound to effectively short-circuit the opaque sections of walls and floors. In 2020, the Ontario Building Code (OBC) introduced requirements for buildings to achieve certain minimum Apparent Sound Transmission Class ratings (ASTC). This rating is a measure of on-site sound transmission which accounts for flanking paths.

Before the requirements for ASTC ratings came into effect in 2020, the OBC contained requirements for STC ratings only. Therefore, buildings built before 2020 are more susceptible to flanking transmission. Notwithstanding the addition of ASTC requirements in 2020, structure-borne sound transmission remains unaddressed in the OBC at the time this article was written.

The 2020 OBC requires that assemblies meet the specified ratings for both STC and ASTC. The requirements for meeting ASTC ratings include on-site testing or meeting prescriptive requirements to address flanking transmission.

The requirements for STC rating include a minimum rating of 50 or greater between occupied compartments and corridors and a minimum STC rating of 55 between occupied compartments and elevators and garbage chutes. These requirements aim to ensure a reasonable level of sound insulation to promote occupant comfort and privacy.

Measuring Sound Transmission

Airborne and structure-borne sound transmissions are measured using specific techniques and metrics to assess the level of noise or vibration in different situations. The results are then used to assess the effectiveness of individual materials, building assemblies, or other measures for reducing sound transmission.

Achieving a specific STC and ASTC rating involves careful design, construction practices, and appropriate materials. The designed ratings for a given assembly can vary depending on workmanship and the quality of materials used. In some situations, the minimum requirements set out in building codes may not achieve the level of performance desired. In these cases, builders and architects should consult with an acoustic specialist to design building assemblies with improved sound transmission performance.

EXCESSIVE NOISES - CONDOMINIUM RISK AND LIABILITY

By Denis Gagnon, BSc.,, P.Eng. /  Mar. 22, 2023

In a recent decision, the Condominium Authority Tribunal [the “Tribunal”] ruled that Condominium Corporations can be held liable for failing to take reasonable steps to address unreasonable noise(s) nuisances. In Jones v. Toronto Standard Condominium Corporation No. 2017 [“TSCC 2017”], the Tribunal found there was a noise violation of TSCC 2017’s governing documents and the Condominium Act, 1998 [the “Act”] and that TSCC 2017 failed to take reasonable steps to address the noise nuisance.

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Background

Ms. N. Jones [“Jones”] alleged that there had been unreasonable noise(s) transmission from the heat pumps in the units above and below her unit [the “Unit”] and that the noise(s) affected her right to reasonable quiet enjoyment of her unit. Jones also alleged that TSCC 2017 failed to meet its obligation under the Act to deal with the noise(s). Jones sought $25,000 in general damages due to TSCC 2017 having interfered with her use and enjoyment of her unit.

TSCC 2017 countered that they acted appropriately in response to the noise(s) complaints and that the claim should be dismissed on the basis that there was no excessive noise(s). TSCC 2017 further claimed that if there was excessive noise(s), it was due to the heat pump in the Unit and that Jones was responsible for maintaining and repairing her heat pump.

The Trial

At trial, Jones alleged she first reported the noise(s) issue to the building management in January 2019. In March 2019, the building manager and engineer attended the Unit and determined that some noise(s) emanated from the heat pumps above and below the Jones unit, but that the noise(s) was normal. Jones subsequently requested that TSCC 2017 conduct proper acoustic tests, which TSCC 2017 declined to pay.

In May 2019, Jones retained J.E. Coulter & Associates Ltd [“Coulter”] to conduct acoustical testing in her unit and the units above and below. Coulter found that the overall sound level from the operating heat pumps in the units above and below the Jones unit exceeded the noise criteria specified by the American Society for Heating Refrigeration and Air Conditioning Engineers [“ASHRAE”]. When Jones retained a representative to act on her behalf, TSCC 2017 passed a motion to conduct acoustical tests. The tests were subsequently postponed indefinitely due to COVID-19. In January 2022, Jones filed a case with the Tribunal.

In September 2022, TSCC 2017 retained Arbitech Inc [“Arbitech”] to conduct acoustic tests and report on their findings. Jones also retained Coulter to conduct additional acoustic tests at the same time as Arbitech. Arbitech found that the noise(s) from the heat pump in the Jones unit exceeded the maximum background noise recommended by ASHRAE. Arbitech also found that the noise(s) transmission from the heat pumps in the units above and below the Jones unit did not exceed ASHRAE’s recommended maximum background noise. It was Arbitech’s opinion that the excessive sound reported by Jones may be explained by “… individual sensitivities to varying sound pressure levels and frequencies.” Coulter’s second acoustic tests and findings were consistent with those of Arbitech. It was also Coulter’s opinion that “… the conditions that caused an excess above the ASHRAE criteria in [the Unit] has been resolved.”

The Tribunal Decision

The Tribunal concluded that Jones did experience a noise(s) nuisance, contrary to s.117(2) of the Act, and that the neighbouring units had at some time taken steps to stop the noise(s) nuisance. The Tribunal also found that “… the Corporation failed to discharge their obligations under Section 17(3) to ensure that owners take necessary steps to comply with the Act and TSCC 2017’s rules.” The Tribunal ordered TSCC 2017 to compensate Jones $1,400 for the acoustic tests and costs of $700.

Key Takeaways

As the Jones case highlights, Condominium Corporations must ensure that residents’ right to reasonable quiet enjoyment is not compromised. The Jones case also highlights the importance of promptly addressing noise(s) complaints. This Tribunal decision will undoubtedly have implications for managing noise complaints by condominium residents. 

HANDLING EVIDENCE: WHAT YOU NEED TO KNOW ABOUT ITEMS INVOLVED IN LITIGATION

By Denis Gagnon, BSc., P.Eng. / August 31, 2021

Owners of buildings and dwellings seeking to make a claim against a third party are often under the false impression that they are entitled to remove, alter or dispose of an item they suspect to be the cause of a loss or an issue within the building or dwelling. Nothing could be further from the truth. Any item that is removed, altered, destroyed, or disposed of can significantly impact the outcome of a litigated claim. For example, it was my experience that torque became a point of contention after a claimant removed a bolt without measuring torque and before all parties were allowed to participate in the examination. Careful attention must therefore be taken when handling items that may be considered evidence in a litigated claim.

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Fortunately, the ASTM E860 Standard Standard Practice for Examining and Preparing Items that Are or May Become Involved in Criminal or Civil Litigation provides valuable recommendations regarding handling items of evidence that may be involved in a claim. The Standard also provides guidelines for documenting the condition of items of evidence and for testing, examining and disassembling such items.

I highly recommend that any party holding physical evidence that is or may be involved in a claim to follow the recommendations provided within the ASTM E860 Standard to ensure they do not jeopardize the outcome of the claim.

Main Takeaways from the ASTM E860 Standard

As per the ASTM E860 Standard, if you are or representing the party conducting the examinations or tests, you should ensure that:

  1. you document by photograph or other descriptive means the state and condition of the evidence, prior to testing or altering the state of the evidence;
  2. you document any post-incident changes to the evidence;
  3. you perform non-destructive testing before destructive testing of the evidence;
  4. you use exemplars, if possible, to preserve the integrity of the evidence;
  5. you notify and advise your client that the proposed tests are likely to alter the state of the evidence;
  6. you advise your client that all interested parties be allowed to participate in the proposed testing of the evidence, and that;
  7. you preserve and label the evidence to maintain its integrity.

That said, I also recommend you not alter the evidence before preparing and submitting a testing protocol to all interested parties, you allow all interested parties to comment on the testing protocol, and you allow all parties the opportunity to observe and participate in destructive testing of the evidence.

If you have any questions or concerns regarding the handling of evidence that is or may be involved in a claim, you should speak with a lawyer or forensic engineer. At Arbitech Inc, we help lawyers and claimants deal with forensic engineering investigations.

INTENDED OBFUSCATION!

By Gerald (Jerry) Genge, P.Eng., C.Eng., BDS, BSSO, C.Arb., Q.Med.

You heard me.  “Obfuscation!”…. Does it bother anyone else that some legal counsel chooses to smear mud over clear issues and meticulously presented evidence when it is equally clear that their client cannot possible benefit?  It wastes time and, I guess, in doing so, ramps up the legal costs which might leverage a lower settlement value.  But it is also counter to promotion of an effective and efficient process by reasonable people toward a fair resolution.

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I wrote an opinion report recently dealing with a townhouse that had structural and leakage issues.  In this case, my opinion was not about what to do.  It was about who was responsible – negligence issues – not damages.  Those had already been established and the repairs were complete.  Basically, through a review of documents, my opinion said that the engineer of record had a duty to design appropriate shoring and drainage; he failed in his duty to do so; and as a direct result, repairs were needed.  Yes, the municipality was also on the hook for failing to meet their duties and the builder as well for failing to comply with the design that was wrong and, in his failure, actually making it worse.  But that’s not the issue here.  The issue was that of the wording of the one-page covering letter to my report.  In that letter, I stated that the report was intended for mediation.  Further, I stated that I did not append all footnoted documents as those were in the court record.  Like all expert reports should, I added the phrase stating that the opinion was based on available information and that if new information became available, I might change my opinion.  We’d been through discoveries, so if new information appeared, there had better be a very good reason.  It was a report that could quickly be amended for trial if needed.  But this was not going to trial.  It was obviously headed toward settlement.  Being a report for mediation, I knew that the mediator was not going to read the 100 pages let alone another 100 pages of referenced documents; so, why include those.  He was only going to read the 3-page executive summary. 

The engineer’s legal counsel knew all this.  He knew it was silly to append all referenced documents; he knew his client’s insurer was going to write a cheque.  I knew that he knew this because I had been his expert on another matter so he and I both knew where this case was headed.  But, rather than move forward with the business of closing the matter, he chose to take issue with the wording of the covering letter to my report.  He said that my report was “not final” that it was “without prejudice” and; therefore, could not be used in the mediation.  I amended the wording of the letter once – removing the statement that it was intended for mediation.  A week later – same response.  After my client’s lawyer and I shook off our disbelief and she (our client’s lawyer) torn him a new one over the phone, we finally went to mediation.  Less than a day later there was a draft settlement agreement which is now being tuned up for execution.  The engineer’s lawyer wasted two weeks.  Nobody understands why.  Nobody understood why an opinion report for mediation should cause him such concern. 

The only answer I have is that he knew he was holding no playable cards so he had to use distraction as a tactic to make it seem like he was doing something.  He couldn’t deal with the facts so he dealt with the paper they were written on.  Obfuscation may work before you get to trail.  It may increase the anxiety of the parties to make it seem like they have a softer claim than their expert has presented; but, in front of an arbitrator with subject matter expertise or a seasoned judge, as a tactic, it becomes his liability as it withers before the evidence. 

So, legal community…. why not quit with the games and just get down to business?  The civil justice system has enough problems without lawyers lathering on more.

CONTRACTORS

By Gerald (Jerry) Genge, P.Eng., C.Eng., BDS, BSSO, C.Arb., Q.Med.

Of course, they don’t hate you.  They may even like you.  But if they don’t agree with you and show it by not paying or perhaps even suing you for deficient work, what are your options?  You can lawyer up and issue a construction lien.  That’s pretty common.  You can also try to salvage the relationship with promised defect correction and expedited completion – seen that too.  You can engage a mediator and spend a day or more in separate rooms anticipating what the other guy might be thinking – that often works because most contract and construction mediators start the process by the “scare you into settlement by underscoring the cost to take it to court” strategy.  That is an ugly truth and often leverages a mutually disagreeable result. If none of those options are to your liking … maybe a arbitration will allow you both to move on.  You may “win” you may “lose” but you will be able to move on and you will learn from the process. 

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Gerald R. (Jerry) Genge is the Principal of Arbitech ADR providing Dispute Resolution, Expert Services, and Neutral Assessments on building design and construction disputes. 

DOES AN ARBITRATOR WITH SUBJECT MATTER EXPERTISE GIVE YOU A BETTER DECISION?

By Gerald R. (Jerry) Genge, P.Eng., C.Eng., BDS, BSS, Q.Med., C.Arb.

Would you prefer the balanced but contentious classic civil court process… or would you rather get it resolved by someone impatient about getting it right?  This brief article describes the alternatives and one proven way to move disputes from a looming mountain of paper and process to the rear-view mirror.

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On one hand, the civil justice system is underpinned by fairness and equal opportunity to argue or defend a claim.  It has allowed evidence to be weighed and interpreted, and to form the basis for the opinion and decision by only the judge.  The judge may have experience in many aspects of law; but, they are likely not trained in matters involving technical issues.  Sometimes common sense is enough; but, not always.  Enter the “expert”.  As an exception to the rules of evidence, the expert may be granted the right to present an opinion on the technical matters.  If well presented the “opinion” evidence should replace a judge’s personal experience or bias or their indecision with a fair and reasoned expert opinion.  A good expert can do this.  A hired gun can not and since the “hired gun” is the usual worry of all other parties, they too must engage “experts” to respond to the evidence and present their “expert opinion”.  On the surface, that all supports fairness and equality of opportunity.  It also slows the process and adds cost as report upon report upon report is written and produced.  The reports may answer only some of the questions about the matter and; thus, be only part of the picture.  They may be long and tedious to read.  They may be advocating for a position.  They may not be helpful at all.

On the other hand, an adjudicator or arbitrator with technical subject matter expertise may be able to hear technical evidence and substantially abbreviate the time it takes to respond.  If they are really on their game, they may require that the experts for all parties meet with a facilitator to pare down the points of disagreement and, without influence by the advocates or the principals in the claim, establish a fair valuation of damages or specific performance needed to resolve the issues.  Then the expert evidence may be limited to assessing liability which a worthy adjudicator can probably work out using the contracts or other documents obligations.  As another option, the technically astute arbitrator adjudicator or may choose to get all the experts together as a panel and question them on their reports, direct certain experts to do certain activities, or give counsel some direction on the limits of the qualifications of the experts.  In the cases that I have done this, the parties were present in the background; the evidence took less than half the time to submit; the case settled that day.

In the cases where the conventional process is employed, everyone spends a lot of time and money working their way to the date of a trial.  Sometimes the important parties have disappeared.  Sometimes the evidence and memories are stale.  But, the due process is upheld.  In the cases where someone with subject matter expertise takes control, time taken, money spent, anxiety experienced, and public exposure presented can be curtailed while possibly arriving at a better answer to the questions of liability and damages.

Jerry Specializes in ADR of matters in the $250,000 to $1,000,000 range and applies over 40-years’ experience to resolution in a friendly, yet efficient settling.

WHAT WERE YOU THINKING?

By Gerald (Jerry) Genge, P.Eng., C.Eng., BDS, BSSO, C.Arb., Q.Med.

I occasionally get calls from people who say that they are embroiled in a legal action and would like me to recommend a mediator for a construction claim or construction defect issue; but, that they would like to hold my name in reserve as an arbitrator because they expect the mediation to fail. Seems disingenuous to recommend myself; but, I try not to take that personally.

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Its curious that people continue to feel that mediation is a necessary step in the dispute resolution process. Perhaps I should advise them that if they don’t like the added expense, don’t appreciate the potential for a “mutually disagreeable” resolution, or simply don’t want to go through the trauma of a mediation or show their hand – so to speak, why not just have an arbitrator with subject matter expertise deal with it? Of course, then I would have to end the conversation with… “say no more unless you want me to be conflicted out… give me the contact info for all the parties and I’ll send an arbitration agreement to you all”. 

While mediation is often a good choice and can arrive at a “mutually disagreeable” answer, Alternative Dispute Resolution or ADR does not equate to “Mediation”.  Particularly for smaller value disputes – say under $500,000 – where legal fees can be disproportionate to the claim value, Arbitration can put the issue to rest in a cost-effective manner.  Worth a try.  You may not like the answer; but, there will be less pain in the pocketbook.

Gerald R. (Jerry) Genge is the Principal of Arbitech ADR providing Dispute Resolution, Expert Services, and Neutral Assessments on building design and construction disputes

CAN YOU OVERCOME BIAS?

By Gerald R. (Jerry) Genge, P.Eng., C.Eng., BDS, BSS, Q.Med., C.Arb.

There’s been a lot of negative “press” about bias; but maybe we shouldn’t beat ourselves up about it so much.  Simply put, it is a prejudice… and we all have them.  Every person with memory is prejudiced; that is, they have developed through experience and assimilation a pre-judgment that will affect a decision they make now.  Every trier of fact, every expert, and every lawyer is pre-disposed to interpret a current question based not only on the current information or evidence, but also on the combined recollection of their past experiences and information.  We have no choice.  We are wired that way. 

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Not only are we pre-disposed to prefer one line of thinking over another, we are entirely convinced that the preferred thinking is correct and we will try very hard to find ways to make a new situation fit our way of viewing things.  For the most part, we react emotionally first (using our lizard brain) and then justify our decision using the more-evolved parts in the cortex.  I’m not making that up, there are libraries full of books on our lizard brain, how we misremember things to support our preferred recollection, and how our positive or negative experience toward or against something, whether that experience be real or imagined, creates our predispositions or biases.

What’s worse is that not only are we each struggling with our own biases, people all around us are attempting to modify our biases to fit their view of the way things should be.  You see evidence of bias all around you every day.  These are in the news when we hear or read about political or religious conflict, on television and radio when we see and hear advertising, and in social media, which is omnipresent.  Someone, somewhere is either trying to reinforce your beliefs or change your mind.  Everyone promotes their particular biases.

If you are willing to accept that everyone is biased (which is one of my biases incidentally), then you may be ready to accept that it is an affliction that can be controlled.  I’m not offering psychoanalysis.  Apart from being wholly unqualified, this piece has already reach 300 words and I’m running out of space.  But, if you realize that your past has biased your approach to the present, you may be in a better position to dampen your bias to a manageable level.  For example, I am an experienced engineering consultant who has also benefitted from a good income and made life choices that, on balance, have allowed me a comfortable lifestyle.  I am also the chairman of a tribunal that hears appeals involving Municipal Orders about violations of building construction and maintenance standards.  Almost invariably, the Appellant is a person who is far less fortunate than me, maybe has some combination of physical or psychological problems, or maybe just has a far greater tolerance for disorder and disrepair than the applicable benchmark.  It would be easy to simply apply my rules and the written rules and confirm each municipal order.  “Heck, if I can keep my property up to standards, why can’t they?”  My tolerance for people that violate the rules is admittedly low.  My discretion is, however, pretty broad.  My bias toward order and compliance must be tempered by current circumstances and evidence in the here and now.  Which, incidentally, is why I disallow the tribunal members a personal visit to the “offending” property.  Their independent investigation would give them information that is maybe not in evidence.  If we can keep our personal biases in check and our rulings reasonable and impartial, my tribunal will not only be as unbiased as possible, we will be seen to be “unbiased”.

So, what might any of this mean for you?

If you are an expert witness writing a report, make sure that the application of your expertise is limited to the correct and reasonable interpretation of the evidence you have collected or are appraising and that you are not “advocating” for your interpretation of the science or methodologies (unless you have been asked to explain the differences between the science and methodology options and to select the more appropriate for the circumstances).

If you are a mediator with subject matter expertise (which I still think is a good thing), be careful that your expertise does not influence you such that you become partial to one position or the other.  Knowing when someone is blowing smoke is one thing; supporting the contrary position is quite another.   Nothing neutral about that.

If you are an arbitrator with subject matter expertise, be careful that your expertise doesn’t weigh heavily in your decision (or maybe at all).  Like my tribunal, you don’t want to be in the position of introducing your own unspoken evidence into your decision – evidence that was not cross examined.   In the very least, if you think an important issue is not being discussed, you should disclose what you think are criteria and parameters that may or may not apply and let the parties argue those points (a good Hot-Tubbing can achieve that).  If your bias underpins your decision, you run the risk of having your ruling challenged on the basis of bias.  That would be career-limiting to say the least.

Bias exists everywhere.  It must, because none of us have the exact same prior experience and none of us have the exact same reasons for interpreting things we see or hear in exactly the same way.  What matters, is that we control our biases and make each new choice and decision with as much weight on the current information as our lizard brains will allow.

Gerald R. (Jerry) Genge is the Principal of Arbitech ADR providing Expert Services, Neutral Assessments and Dispute Resolution on building design and construction disputes.

CONSTRUCTION DELAY CLAIMS - (ART OR SCIENCE) THE SAGA CONTINUES

By Antoine Aurelis, MSc., PQS, MRICS, FCIArb.

Project tracking, reporting, and analysis have experienced exponential growth in recent years. Technological improvements have impacted the construction industry and over time led to narrower specializations. The construction industry continues to see the emergence of more highly skilled and trained experts as increasingly sophisticated forensic software comes to market. Similarly, the growth of diverse views and opinions about the use of these tools has become more prevalent.

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The diversity of opinion has transcended all facets of the industry including the legal and alternative dispute resolution systems. Although there is still no definitive position in law, the standard of proof required is that of ‘on the balance of probabilities’. Therefore, the onus is to show sufficient evidence to ‘tilt the balance’ (i.e., there is a higher probability that the said event caused delays to the project).

This discussion paper will explore differing opinions with respect to this contentious subject and the role of software as a sufficient evidentiary tool. The author’s conclusions are based on experiences in various jurisdictions and a review of the available literature. 

The proper and effective use of such sophisticated software can be of enormous assistance to a party and ultimately help ‘tilt the balance’ in one’s favour. Proponents argue that, when a project is delayed, the Contractor is usually adversely affected and needs to be adequately compensated (time and/or money). This can be quantified scientifically using software specially designed to monitor and track projects.

Case Law

John Barker Construction Limited v London Portman Hotel Limited 83

Held – ‘a fair extension of time called for a logical analysis of the impact of relevant matters in a methodical manner, ‘…I accept that the assessment of a fair and reasonable extension involves an exercise of judgment, but that judgment must be fairly and rationally based.’ Mr. Recorder Roger Toulson QC. 

This case established a minimum threshold; it confirms the nature and extent of analysis required when determining entitlement for extension of time. In this matter, Critical Path Method (CPM) was deemed to be a fair and appropriate method to calculate a reasonable extension of time. It is likely that similar methods would have been acceptable and treated accordingly in that respect. The critical criterion as considered in this case is that of being logical and methodical.

The Society of Construction Law published official guidelines on the matter (see Delay and Disruption Protocol). Notwithstanding the provisions of the Contract Conditions, the Delay and Disruption Protocol recommends the following:

  • Agreement on choice of software and approach to be employed.
  • Constant and continuous monitoring and record-keeping.
  • Contractor to inform the employer of events causing delay as soon as possible.
  • Parties should deal with the impact of employer risk events as it occurs.

Most standard forms of contract (and bespoke agreements) require the Contractor to mitigate impacts of events on the project schedule. This contractual obligation also includes the effects of Owner risk events. 

On the other hand, opponents are of the view that these scientific tools are too theoretical. Further, they have been criticised by the courts and practitioners for their inability to illustrate criticality and in some cases, can virtually ignore reality. Despite these arguments Contractors and their experts continue to use these tools to demonstrate delay impacts using visual aids.  

Case Law

Royal Brompton Hospital NHS Trust v Hammond 76

Held – “an assessment of entitlement to an extension of time did not depend upon any sort of scientific evaluation of any type of material but simply on impression formed on the basis of previous experience”, His Honour Judge Richard Seymour QC.

An endorsement of the impressionistic approach to delay analysis. This argument is further supported by the Commission on International Arbitration of the ICC, who express concerns with the objectivity of such analysis, stating that: “It quite frequently happens that many of the numerous assumptions that have been made in the construction of such retrospective networks are in the end so controversial that the network cannot be accepted by the Tribunal for the purposes for which it was created”. 

The ethos of the myriad of scheduling software available is to analyse the impact of project events on the progress (disruption) and completion (delay) – Delay Impact Analysis. To this end, several approaches have been adopted, including the Critical Path Method, Global Impact Technique, Net Impact Technique, Snapshot Technique, Collapsing Technique, etc.

One must be mindful of the fact that the use of such aids in the preparation of claims is not an exact science. 

Application of these tools requires one to exercise professional judgement, objectivity and independence when assessing their usefulness in preparation of a specific claim. The court or tribunal involved in the resolution of a dispute in respect of delay will invariably rely on one of the aforementioned or similar techniques along with testimony from a suitable expert (in some cases, the weighted testimony of more than one expert). 

Use of such tools should not be assessed in isolation; the parties involved are in a contractual relationship, the terms of which must form a basis for resolving disputes relating to delay impacts. It is therefore imperative that the parties agree on the details with regards to the type and extent of use of such tools. Also, the need to practice fairness, discretion, and transparency cannot be substituted by any software.

Although it can be argued that software employs scientific processes, the outcomes rely sufficiently on input, which in some cases can be subjective (shall we say, “rubbish in – rubbish out”). As before mentioned, this is not an exact science and so the outcome will be just as subjective as the data fed into the process. “The application of an impressionistic rather than a calculated and rational assessment is not sufficient”, (Palles-Clark R, 2002).

The Courts and Tribunals are unlikely to rely solely on the results of such a potentially subjective process as sufficient proof of a claim. Independent and objective supporting documentation must accompany the resultant graphic aid generated by these tools. “It is always essential to consider the audience for the analysis, the cost benefit of adopting a particular method, and to find ways of communicating the results in a way that is both credible and readily understandable”, (Palles-Clark R, 2002).

Although such forensic tools are useful for both the analysis of delays and the graphical presentation in support of the basis for a claim, they must be adequately supported with project records and other pertinent information (drawings, schedules, instructions, reports etc.) amassed during the project. 

Here lies the ‘art’ in delay analysis, where a keen knowledge of contract law must combine with practical understanding of the commercial aspects of construction management to enable successful evaluation of claims. Adequate consideration must be given to the probative value of the chosen technique for the given case to answer the following questions:

  • Float – Who owns the float?
  • Concurrent delays – Are there concurrent delays and how should they be treated?The definition of concurrent is evolving, therefore, defining concurrent delays may be subject to discussion and agreement by contracting parties.
  • Global claims – Can claims be global and to what extent?
  • Impact – Do the delays shown affect completion of works and to what extent?

 McAlpine Humberoak Ltd v McDermott International Inc

Plaintiff – “…each instruction was critical and impacted in full upon completion date without considering the event in the context of what was actually happening at the time and without considering what other work was being carried out at the time.”

Defendant – “…a retrospective and dissectional reconstruction by expert evidence of events almost day by day…designed to show that the spate of additional drawings which descended on McAlpine virtually from the start of the work had little retarding effect on its progress”.  Held – DISMISSED per Lloyd, LJ. “…in any analysis of project delays, the contractor is required to take into account realistic resource levelling”. It was unlikely for wholly theoretical calculations to succeed. 

Henry Boot Construction (UK) Ltd v Malmaison Hotel (Manchester) Ltd

It was decided that “the respondent was entitled to respond to the claim not by arguing that the variations, late information and so on relied on by the claimant did not cause any delay because they were not on the critical path and positively by arguing that the true cause of delay was other matters…” 

“I am clearly of the view that, where there is an extension of time clause such as that agreed upon in this case and where delay is caused by two or more effective causes, one of which entitles the Contractor to an extension of time as being a Relevant Event, the Contractor is entitled to a full extension of time.” Mr. Justice Dyson.

Science or Art? The Quantity Surveyor in me says both; notwithstanding, contracting parties should be cognizant of the following:

  • The need to observe Contract provisions.
  • Make every attempt to deal with an incident as it occurs or as soon as possible thereafter.
  • Presentations must be clear and support (a) Entitlement (b) Quantum.
  • Such tools must be supported by relevant records (drawings, instructions, reports etc).
  • Scheduling is not an exact science; all assumptions must be seen to be objective and fair. Remember, ‘rubbish in rubbish out.’

Although the views on the extreme peripheries of the pendulum are sometimes advanced, the preceding discourse demonstrates that an understanding of the legal principles governing delay analysis, appropriate approach, factual evidence, effective presentation, and transparency of procedure are the essential ingredients for the successful preparation of a construction claim. 

CONSTRUCTION CLAIMS IN A COVID-19 ENVIRONMENT

By Gerald R. Genge, P.Eng., C.Eng., BDS, BSS, Q.Med., C.Arb.

Claims Basics?

Legalese aside….  to have a claim, someone was supposed to do something they did not do, or did they do something that they were not supposed to do?  If you realized consequences as a result, you may have a claim to be compensated for those consequences.  That simply means that a bargain you made was not honoured.  Easy, right?  But what if something else forces one or both parties to that bargain to fail to meet their obligations?  What if, despite their best intentions and attempts, they cannot fulfill their obligations?  How does that affect their claim?

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Imagine if you will, a situation in which, though a CCDC 2 Stipulated Price Contract executed last January, a building owner/manager hires a contractor to replace all the windows in a high-rise building starting in March 2020 and finishing by September 2020.  That work has been needed for some time and the occupants have been insistent that they need new windows.  To calm the occupants, the owner/manager of that building, promises the occupants by a newsletter and Town Hall meeting that they would have new windows before the fall of 2020.

Supposing as well, that several of the occupants had made arrangements with other contractors to repaint walls, and make other improvements that could occur only after the windows were installed and that their contractor’s lump sum prices for those improvements were agreed by a signed purchase order which stipulated that price was dependent upon completing the work in September 2020.  You see where this is headed?

In steps COVID 19 and government business intervention measures to protect health and safety in an “all in this together” approach.  The window contractor’s glass supplier becomes insolvent and closes down.  The window installer looks for new glass but cannot get any until November due to shortages.  The trickle-down impact of COVID 19 on business agreements is in place.  Now, we have a painter who agreed to do work in September 2020 but is told he cannot, an occupant who based that agreement on a commitment from the building owner/manager that work in their suites would be completed before September 2020 who cannot get the work done, and a window contractor who was to do the window work but is unable to do that work because now, he can’t get the right glass in time.

The painter says he is ready to go in September; but, if the work is delayed, he will charge 20% more because the government suspension of work has prevented him from working; purchase orders have been backing up, and to satisfy everyone, he will have to pay overtime.  The contractor who was to install the windows says that his price has to increase 30% because his glass supplier is no longer around and the only other supplier he can find with that particular type of window will cost 30% more.   Moreover, this delay has cost his business so much that his surety company will no longer provide a labour and material payment bond.  Finally, if the owner/manager does not accept these new terms, the window contractor says that the contract can no longer be completed as agreed, has been “frustrated”, and he can no longer do the work.

The owner/manager says that he has no knowledge of where the windows came from and that if there are extra costs those are the contractor’s responsibility.  Further, the owner/manager says that if he is sued by the occupants for extra costs arising from the window contractor’s delay, he will back-charge those to the window contractor.  Messy, no?

In this situation, who can claim for costs?  Who has originally prescribed obligations that they no longer have to meet?  Who gets to charge more?   Lawyers will say, look at the contract.  Was there a provision for delay not contemplated?  Was there a compensation clause?  Was there a compensation and delay without consequences clause?

Force Majeure

This term has been tossed about quite a lot lately.  Basically, it means that a contract can no longer be executed because there were intervening and extraordinary circumstances, sometimes referred to as “acts of God” that were not, perhaps could not, have been contemplated.  These could include fires, labour disputes, strikes, lockouts, diseases, plagues, and epidemics.  Under the heading of epidemics, certainly COVID 19 has been declared a worldwide pandemic; but, does that make it a claimable event?  There are no clear answers, but here are just some thoughts on the matter.

  1. A CCDC 2 Contract has General Condition (CG) 6.5 regarding delays and costs. That clause can guide a claim or response subject to Supplementary General Conditions (SGC).

 

  1. Force Majeure in the manner of a pandemic may trigger delays or delays and costs can be informed by CG 6.5 or amending SGC.

 

  1. While a Force Majeure event may have occurred, the occurrence may not be sufficient grounds for a claim or counterclaim. Details such as foreseeability, ability to alter an agreement, ability to mitigate costs, and effort to mitigate costs all weigh into any claim.

 

  1. One must also consider the significance of any change in costs. Would a 10% increase in cost be claimable as a response to a force majeure event?  How about 20%, 50%?

 

  1. If work is only delayed and not terminated, is the delay within the total non-critical path period of a project or is it just an extension of certain critical path periods? What is the actual extended period?

 

  1. If the work is terminated due to a force majeure event, and the termination is invoked by the building owner/manager (in the case of the window installation) or by the occupant (in the case of the painter), can these contractor(s) claim lost opportunity costs, lost income, overhead and profit on the project, and/or overhead on the costs to maintain their office.

 

  1. If the work is terminated by the window contractor, can the owner/manager claim costs for delay or 3rd party claims from occupants passed along as the added costs to do the painting?

 

  1. Does the understanding between the occupant and the owner/manager constitute a contract that can trigger a claim?

 

  1. Can any of these matters be claimed against business operations insurance?

 

  1. Do a government measures trump all or any commercial arrangements in contracts affected by COVID 19?

 

  1. Does the government have any liability for possible failure to protect citizens against effects of a pandemic type force majeure-type event and to what degree was it foreseeable?

 

  1. Can the government be held financially responsible for frustration of the commercial arrangements and associated costs?

Like everything else we do, the actions we agree to take and accept in a contract are based on the type and amount of risk we will take and how much the taking of that risk is worth.   But what if you do not know the risks?

Who should be at risk?

Contracts are really all about doing something for someone and getting something in return (illegal activities excluded).  When nobody else intervenes in a contract, there is supposed to be an ability for the parties to understand the expectations and the rewards in those contracts.  In that way, they can decide how the risks can be divvied up.  Normally, if you assume more risk, that is worth more than if you assumed less risk.

COVID 19 and the government threw a huge wrench into the works of construction contracts.  Under the heading of “we’re all in this together”, government (presumably rightly) shut down most businesses and, thus, the ability of those businesses to do things they promised to do, pay for things they promised to buy, and go places they promised to go.  As it sits today, in the absence of better force majeure compensation clauses in contracts, there is a very tall hill for a claimant to climb to demonstrate that the contract could not be completed.  I will not quote case law, but the conditions that allow a contract to be ended due to force majeure essentially term ”impossible” has been the subject of some discussion.  Today, essentially, the contract has to have been made “impossible” and, thus, totally frustrated by unforeseeable events such that it cannot be completed.  But, “impossible” is very different situation from being “commercially impractical”.

A contract that is “commercially impractical”, considering the intervening restrictions and suspensions, can no longer be done in the planned time, or cannot be done with the same materials.  It is not “impossible”; it is just not possible at the same cost, time, or using the same materials.

It seems to me that at present, the assumptions made by contracting persons, like our window installer who expected to get glass starting in March and possibly expected to have access through the occupied spaces to install those windows or the occupant who agreed with a painter to have work done at a specific time and cost following the window replacement, were reasonable risks that each understood and paid for or were paid for.  If those conditions are out the window, so to speak, it would seem that the current frustration or “impossible” threshold puts a heavier burden of risk on the contractor.  Disagree if you will.

As a glimmer of light contrary to current “impossibility” standards for frustration of a contract, the Canadian Law Dictionary © 1980, defines “impossibility” as follows:

“[…] ‘Impossibility’ means not only strict impossibility, but impracticability because of extreme and unreasonable difficulty, unanticipated difficulty, expense, injury or loss involved … Mere unanticipated difficulty, however, not amounting to impracticability is not within the scope of the definition.”  Restatement of the Law of Contracts, American Law Institute, vol. II, S 454 […]”

So, there remains a very high test of “impossibility”.  It would seem that the test requires deep exploration of the facts to arrive at a determination of whether a particular contract has been made impossible or merely more difficult.

Now what?

Whether, a contract is impossible, impractical, unreasonably difficult, etc., will undoubtedly be the subject of much new Canadian common-law in the years to come.  One can also expect that in a post-COVID 19 world, there will be substantial changes in the drafting of contracts regarding delays, suspensions, and associated costs to more reasonably share the risks involved.  I expect that there will also be added layers of complexity as in our example of the painter affected by the inability of the window supplier to meet expected timelines.

While several steps removed from the government intervention measures, there have been unpredicted consequences brough about by conditions to which nobody had agreed.  We may have been “in this together” as far as protecting our health and safety; but that may not be the case when trying to reconcile costs and damages.

In the meanwhile, I expect that there will be an accounting done and fingers pointed.  Interesting times ahead.

Gerald R. (Jerry) Genge is an ODACC Adjudicator, engineer, mediator and arbitrator employed by Arbitech Inc. and Pretium Engineering.

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© Gerald R. Genge, P.Eng., C.Eng., BDS, BSSO, Q Med., C. Arb.

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