Doe et al. v. Canadian Surety Co.

Doe et al. v. Canadian Surety Co.
Collection
Supreme Court Judgments
Date
1936-11-27
Report
[1937] SCR 1
Judges
Duff, Lyman Poore; Rinfret, Thibaudeau; Crocket, Oswald Smith; Davis, Henry Hague; Kerwin, Patrick
On appeal from
Ontario
Subjects
Contract
Decision Content
Supreme Court of Canada
Doe et al. v. Canadian Surety Co., [1937] S.C.R. 1
Date: 1936-11-27
The Reverend E.G. Doe (Trustee) and the Roman Catholic Episcopal Corporation of the Diocese of London, in Ontario (Plaintiffs) Appellants;
and
The Canadian Surety Company (Defendant) Respondent.
B. Blonde (Defendant) Appellant;
and
The Reverend E.G. Doe (Trustee) et al. (Plaintiffs) Respondents.
1936: March 25, 26; 1936: November 27.
Present: Duff C.J. and Rinfret, Crocket, Davis and Kerwin JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.
Building contract—Action for damages for alleged faulty performance by contractor—Terms of contract—Interpretation—Nature of work—Nature of alleged defects—Basis and measure of damages recoverable, if any—Surety company guaranteeing performance by contractor—Alleged alteration of contract without surety’s consent—Alleged failure to notify surety of certain matters—Release of surety.
The defendant B. contracted with plaintiffs to erect for them a church building. It was of a design unique on this continent and of difficult work. The defendant surety company gave its bond to plaintiffs, guaranteeing performance by B. The time for completion under the contract was May 15, 1931. The building was completed by August 13, 1931, on which date the architect’s final certificate was issued. There had been, and continued to be, leakages of rain into the building, which plaintiffs alleged were due to faulty workmanship and B. alleged were due to faulty design. On September 28, 1931, plaintiffs paid the balance of the contract price (which, by arrangement, was paid direct to unpaid sub-contractors), after obtaining on that date from B. a written undertaking as follows: “I hereby acknowledge having received notice from you and your architect * * * that certain defects have been discovered by your architect, and that there is water leaking into the church * * *, the cause of which has not been exactly determined. * * * I hereby acknowledge that the said notice has been given to me in pursuance of the specifications which form part of the contract * * *. I further agree and covenant to repair same according to the directions given by your architect.” The undertaking as drawn by plaintiffs had contained, after said words “to repair same,” the words “according to the terms of the contract,” but as B. (who denied faulty performance by him) would not sign it in that form, the latter words were deleted. Article 16 of the general conditions in the specifications read as follows: “Neither the final certificate or payment * * * shall relieve the contractor from responsibility for faulty materials or workmanship, which shall appear within a period of one year from the date of completion of the work, and he shall remedy any defect due thereto and pay for any damage to other work resulting therefrom which shall appear within such period of one year, but beyond that the contractor shall not be liable. * * * ”
Plaintiffs sued B. and the surety, claiming for damages resulting from the leakages. At trial they obtained judgment against both defendants. B.’s appeal from this judgment was dismissed by the Court of Appeal for Ontario, which, however, allowed the surety’s appeal and dismissed the action as against it. B. and the plaintiffs appealed to this Court.
Held (per the majority of the Court: Duff C.J., Crocket and Davis JJ.): (1) In view of the issue of the architect’s final certificate and payment of the full amount of the contract moneys, and there being no suggestion of fraud or mistake, the question of B.’s liability must be confined to his said undertaking of September 28, and said article 16 (being the only relevant reservation in the contract available to plaintiffs, once the work was completed and accepted, the final certificate issued and the contract moneys paid).
(2) B.’s obligation under his undertaking of September 28 was limited to obeying directions of the architect; and in the absence of proof that directions were given and not obeyed, B. was not liable under the undertaking.
(3) B.’s responsibility under article 16 was limited to faulty materials or workmanship which did not “appear” until after the completion and acceptance of the work. Assuming (what plaintiffs contended) that B. had not properly bonded the bricks and tiles with the mortar, yet article 16 must be read in the light of the necessity for the architect’s constant supervision of this particular work (the bricklaying being a job of more than ordinary difficulty) and of the fact that there was no suggestion of bad faith or fraud or concealment on B.’s part; (discussion of an architect’s duties in such cases, and of the extent of a contractor’s liability in damages if the architect fails to supervise properly and check defects and have them remedied as they occur); and if the defects complained of were such as the architect would observe if he gave the requisite supervision to the work, then it could not fairly be said that the defects were not apparent within the contemplation of article 16 before the completion and acceptance of the work. The date of the “appearance” of faulty workmanship or materials (if any) was important; and the case against B. had not really been dealt with, at trial, from that point of view. Further, if there was liability upon B. under article 16, it rested upon plaintiffs to establish upon a proper measure of damages what were in fact the actual damages; and the evidence was not such as could establish that. The principle of measuring damages on the basis of the cost of repairing the (building as it stood at the date of the trial (February, 1934) was clearly wrong, quite apart from the very unsatisfactory nature of the evidence adduced even on that basis. It was impossible to say from the evidence whether any liability had been incurred under article 16.
(4) For reasons aforesaid, the judgment against B. should be set aside; with liberty to plaintiffs to proceed to a new trial on the issue arising out of article 16.
(5) The action as against the surety should be dismissed. Acts of the plaintiffs in connection with the contract (anticipatory payments, the arrangement aforesaid for payment direct to sub-contractors owing to B.’s financial difficulties in completing the work, the settlement covered by said undertaking of September 28, etc.) which, under all the special circumstances of the case should have been, but were not, done with the knowledge and consent of the surety, operated to discharge the surety. (The law as to the effect of alterations in a contract as affecting a surety’s liability, discussed, and Holme v. Brunskill, 3 Q.B.D. 495; Calvert v. London Dock Co., 2 Keen’s Rep. 638, General Steam Navigation Co. v. Rolt, 6 C.B. (N.S.) 550, and other cases, referred to. Any agreement or transaction between the principals in variation of the contract without the surety’s consent, unless it is self-evident that the variation is unsubstantial or necessarily beneficial to the surety, operates to discharge the surety. The application of this principle with regard to the circumstances of the present case discussed).
(6) After B.’s bid had been accepted, he notified plaintiffs that he had made two substantial omissions in estimating costs for the purpose of it, and requested release or an increased contract price, which plaintiffs refused. B., faced with threatened forfeiture of deposit and loss of materials on the site of the work, decided to proceed with the work. It was subsequent to this that the surety delivered its bond in the blanket form in which plaintiffs required it. When these facts had come out at the trial (which had then proceeded for a week) counsel for the surety asked leave to plead non-disclosure thereof by plaintiffs to the surety and consequent release of the surety, which request was refused except on terms of adjournment and payment by the surety in any event of all costs of the trial up to that time, which latter term was declined. The majority of this Court expressed the opinion that under all the circumstances the surety should have been allowed to amend its pleadings unfettered by such an onerous term as to costs; and that, had judgment not been given for dismissal, on other grounds, of the action against it, a new trial would have been necessary to determine the issue sought to be raised. The questions involved in such an issue were to some extent discussed.
Per Rinfret J. (dissenting in part): The trial judge’s finding that leakages were attributable to faulty workmanship of B. which did not “appear” until within one year after the completion of the work, within the contemplation of article 16, was fully warranted on the evidence. But in any case the undertaking of September 28, 1931, created a new and independent obligation on B., which was not qualified by restrictions in article 16, to repair the defects; and directions within the meaning of said undertaking were given by the architect. The judgment against B. should be affirmed. But said undertaking of September 28 was a material alteration in the contract, and the surety was thereby released of its liability under its bond, and the judgment of the Court of Appeal dismissing the action as against it should be affirmed. Per Kerwin J. (dissenting): Upon the evidence, the trial judge’s findings against B. should not be interfered with. The leaks arose through B.’s failure to comply with the specifications. The conditions in the building shortly before the trial of the action, shewn in evidence, were, upon the evidence, substantially unchanged from those existing within a year after completion of the building; and the defects had arisen within that year. There was ample justification for the amount fixed as damages by the trial judge. Directions were given to B. to repair, within the meaning of the undertaking of September 28. The judgment against B. should be affirmed. As to the surety’s liability:—Having regard to article 16 (aforesaid), and to other terms in the contract which (inter alia) required the work to be done in accordance with the plans, drawings, etc., and such “instructions as may from time to time be given” by the architect, the undertaking of September 28 did not subject B. to anything more onerous than had been required by the contract; it did not effect any change in the contract; nor, consequently, any release of the surety. As to B.’s alleged mistake in omitting to estimate certain costs for the purpose of his bid (even assuming the point was now open to the surety): there was no obligation on plaintiffs to notify the surety thereof; there was no charge of fraud or misrepresentation nor any suggestion that it occurred to plaintiffs or the architect to withhold the information as something of which the surety should be apprised; the error was not such a circumstance the mere non-disclosure of which would release the surety. As to certain matters which occurred during the work—including B.’s financial difficulties and the arrangement for making payment to sub-contractors—they did not give rise to any obligation on plaintiffs to notify the surety thereof. There was no alteration in the terms of the contract; nor was the surety prejudiced. The judgment at trial against the surety should be restored.
APPEAL by the plaintiffs and appeal by the defendant Blonde from the judgment of the Court of Appeal for Ontario.
The defendant Blonde contracted with the plaintiffs to erect for them a church building at Windsor, Ontario. The defendant The Canadian Surety Company gave its bond to the plaintiffs as security for payment of any loss or damage directly arising by reason of the failure of Blonde faithfully to perform the contract.
The action was brought to recover from the defendants damages for alleged faulty performance of the work by Blonde. At trial, Hope J. gave judgment against both defendants for $19,173.25 and a further sum of $330 against Blonde. Both defendants appealed to the Court of Appeal for Ontario, which (by a majority in each case) dismissed Blonde’s appeal but allowed the appeal of The Canadian Surety Company (for dismissal of the action as against it). The plaintiffs appealed to this Court from the judgment of the Court of Appeal in so far as it allowed The Cana- dian Surety Company’s appeal, and the defendant Blonde appealed to this Court from the judgment against him.
The material facts of the case and questions in issue are sufficiently stated in the judgments now reported, and are indicated in the above headnote.
S.L. Springsteen K.C. and A. Racine K.C. for the plaintiffs (appellants).
D.L. McCarthy K.C. and A.E. Knox for the defendant (respondent) The Canadian Surety Company.
J.R. Cartwright K.C. for the defendant (appellant) Blonde.
The judgment of the majority of the Court (Duff C.J., Crocket and Davis JJ.) was delivered by
DAVIS, J.—This is a building contract case. The defendant Blonde entered into a contract in writing with the plaintiffs to erect a church building in Windsor, Ont., and the defendant, Canadian Surety Company, gave its bond to the plaintiffs guaranteeing the performance of the contract by Blonde. The building was in due course completed, the final certificate of the architect was issued and the then balance of the contract price was paid in full. The contract price was $88,500 and the surety bond was for half that amount. Though the building was completed on or before August 13, 1931, as found by the trial judge, it was not until April 5, 1933, that the plaintiffs commenced this action in the Supreme Court of Ontario against the contractor and the surety company claiming $44,695.15 damages for alleged negligence in construction. The trial judge gave judgment against both defendants in the sum of $19,173.25 and an additional sum of $330 against the contractor. Upon appeal to the Court of Appeal for Ontario, the judgment against the surety company was set aside and the action against it dismissed, but the judgment against the contractor was affirmed. The plaintiffs then appealed to this Court against the judgment in favour of the surety company and the contractor Blonde appealed against the judgment in favour of the plaintiffs against him. The two appeals were heard together.
The case should have been a fairly simple one if the parties had directed themselves to the only issues that were properly open and had confined themselves to relevant evidence on those issues. As between the contractor and the plaintiffs, in the absence of fraud or mistake, neither of which was suggested here, the issue of the architect’s final certificate and the payment of the full amount of the contract moneys put an end to the matter except in so far as any rights and liabilities of the parties to the contract were expressly reserved by the terms of the contract itself or by some agreement made between the parties at the time of the final payment. That was a fundamental principle that should have been recognized and applied at the very outset of the trial of the action. Had that been done, it would have become at once apparent that the evidence should have been focussed on two points: firstly, on a special undertaking in writing (Exhibit 25) obtained by the plaintiffs from the contractor before the final payment was made, and, secondly, on article 16 of the General Conditions, which reads as follows:
Neither the final certificate or payment, nor any provision of the contract document shall relieve the contractor from responsibility for faulty materials or workmanship, which shall appear within a period of one year from the date of completion of the work, and he shall remedy any defect due thereto and pay for any damage to other work resulting therefrom which shall appear within such period of one year, but beyond that the contractor shall not be liable. The owner shall give notice of observed defects with reasonable promptness. Questions arising under this article shall be decided as provided in Articles 10 and 44.
Firstly, then, the question is, what is the precise meaning of the written undertaking, and what, if any, liability arose under it? Secondly, what is the scope and extent of the reservation in article 16, and what, if any, liability arose under that article? The minds of those engaged at the trial of this action do not appear to have been focussed upon the fundamental points. The case was thrown wide open without regard to the fact that the building had been completed and accepted, the architect’s final certificate issued and the contract moneys paid. The inevitable result was a mass of evidence that took thirteen days of the trial court at intervals during the months of January, February and March, 1934, and the vital points in the litigation were lost track of. Lord Tomlin (then Tomlin, J.) said in Graigola Merthyr Co. Ltd. v. Swansea Corporation[1]: Long cases produce evils; * * * In every case of this kind there are generally many “irreducible and stubborn facts” upon which agreement between experts should be possible, and in my judgment the expert advisers of the parties, whether legal or scientific, are under a special duty to the Court in the preparation of such a case to limit in every possible way the contentious matters of fact to be dealt with at the hearing. That is a duty which exists notwithstanding that it may not always be easy to discharge.
As far as the contractor’s liability was concerned, there were only the two “irreducible and stubborn” points in the case. Firstly, was there any breach by the contractor of his written undertaking (Exhibit 25), and if so, what was the amount of damages; and secondly, did “faulty materials or workmanship” in the sense in which those words are used in article 16 “appear within the period of one year from the date of the completion of the work,” and if so, the amount of the damages.
Before discussing these points in detail, it is convenient to mention here that it was “a very original design” for a church and “it was difficult brick work,” in the words of the architect himself. The centre section of the church was a twelve-sided figure and the ornamentation for the building was in the brickwork itself. There appears to have been nothing like this design on this continent, though there is a considerable amount in northern Europe. Mathers, an experienced Toronto architect, said
that the whole of the masonry work on that particular building would require very close supervision. I know I would be most interested in how it was done. I would want to take a hand in it—almost become the foreman on the job.
Having regard to the climatic conditions in western Ontario, it is evident that it was a bold move to attempt this extreme type of architectural construction there, and that those who undertook it were bound to give very close supervision to the masonry work during the progress of the work. The contract was taken at a very low figure by a man nearly seventy‑five years of age who had built churches in many small towns, but was plainly without the skilled experience necessary to undertake the difficult work involved in the construction of this type of building.
Turning now to the written undertaking (Exhibit 25) that the contractor gave to the plaintiffs in order to secure payment of the balance of the contract moneys. There had been considerable leakages of rain into the building before the completion and acceptance of the building and the plaintiffs sought to “safeguard” themselves by obtaining from the contractor, before handing over the balance of the contract moneys, a written undertaking as follows:
I hereby acknowledge having received notice from you and your architect, Mr. Lothian, to the effect that certain defects have been discovered by your architect, and that there is water leaking into the church constructed by me, the cause of which has not been exactly determined.
I hereby acknowledge having received notice from your architect and from you of same. I hereby acknowledge that the said notice has been given to me in pursuance of the specifications which form part of the contract entered into between you and myself. I further agree and covenant to repair same according to the terms of the contract according to the directions given by your architect, Mr. Lothian.
Dated at Windsor, Ontario, this 28th day of September, A.D. 1931.
The words in italics, “according to the terms of the contract,” were deleted before the document was signed by the contractor. The solicitors for the plaintiffs had drafted the document, but the contractor had consistently taken the position that the leakages were not due to any failure on his part to perform the contract but were inherent in the architect’s faulty design and inadequate structural specifications. He would not give an undertaking with the words, “according to the terms of the contract” in it, and the plaintiffs finally accepted the undertaking from him without those words. There could be no misunderstanding of the position taken by the contractor. He was not affirming an obligation under the contract; he was undertaking a new obligation outside the contract. The court was entitled to definite evidence by the plaintiffs as to what directions, if any, were given by the architect, when they were given, and what, if any, failure in compliance therewith was made by the contractor. There is a singular dearth of evidence on this aspect of the case. Exhibit 36 is a letter from the plaintiffs’ solicitors to the contractor under date of March 2, 1932, in which they say:
Referring to your letter of February 4, 1932, you mention in paragraph 2 of the said letter that the repair work has been done according to the instructions of Mr. Lothian. We have showed this letter to Mr. Lothian, and he has asked us to say that he gave no instructions to you as to how to make repairs. You have discussed the matter with him and he has only given suggestions, and not instructions.
This letter rather confirms the construction put upon the undertaking by counsel for the contractor that the undertaking necessarily involved the giving of future directions. The architect, Lothian, was asked in cross-examination:
I understood you to say you simply went up there when Mr. Blonde was there, and only went there if there was further evidence of leaking. Am I right? to which he answered, “Yes, sir.” There is really no evidence directed to show any breach by the contractor of his obligation under this written undertaking. We agree with what Mr. Justice Riddell said in the Court of Appeal:
As against Blonde, his obligation was to obey the direction of the architect; the architect swears that he did not give any directions; and the solicitors for the plaintiffs say so specifically in their letter of March 2, 1932. It seems to me that no action lies against Blonde on this undertaking unless and until it is proved that he omitted to obey a direction of Lothian.
Now we turn to the reservation contained in article 16 of the General Conditions of the original contract itself. That is the only reservation in the contract (except article 28 respecting unpaid liens which are not involved in this case) available to the plaintiffs once the work was completed and accepted, the final certificate issued and the contract moneys paid. Very little precise evidence was directed to this provision. There are the most casual references here and there throughout the evidence to proof of the discovery of faulty materials or workmanship within the exact period of one year from the completion of the work, i.e., August 13, 1931. The plaintiffs did engage within the year two independent experts, one an architect and one an engineer, to examine the building and make a detailed report upon it, and this was done about February, 1932. The evidence discloses that these men made a careful and minute investigation and rendered a detailed report, but neither of these gentlemen was called at the trial nor was any part of their report disclosed. Instead of calling these men the plaintiffs called two expert witnesses from Montreal—Macdonald, an architect, and Harrington, a contracting engineer, both capable, experienced men, but neither of them saw the building until the time of the trial, which did not commence till January, 1934. The real complaint that the plaintiffs advanced was that during rainstorms water leaked in through the building at different places and caused a great deal of damage. That the building was leaking before the final payment was made and that the plaintiffs feared a continuance of that condition is perfectly plain from the very language of the written undertaking (Exhibit 25) which the plaintiffs sought and obtained from the contractor before the final payment was made. That the building continued to leak thereafter is beyond dispute. Leakages appear to have broken out in different parts of the building. The evidence is that in August, 1932, the clerestory wall was torn down and it was then discovered, the architect says, that the difficulty was due to the contractor not having properly bonded the bricks and tiles with the mortar. If this could be treated in law as something which “appeared” during the year within the contemplation of article 16 rather than something which in the progress of construction should have been observed and condemned by the architect and the work stopped to insure the proper execution of the contract (clause 2 of the contract, and article 9 of the General Conditions), then one would have expected something more definite in the way of proof of the exact date of this alleged appearance having regard to the date of the completion of the work. There was a good deal of competent evidence, however, that there were two real causes of this leakage. Firstly, that the combination of hollow tile, brick and mortar was a very serious mistake in the construction specified by the contract, in that the combination of them was inherently bad because the hollow tile naturally absorbed the moisture from the mortar with great rapidity and therefore the combination should never have been used in the construction of the building. And, secondly, that there was no bracing of the steel work in the roof of this building. There was much competent and reliable evidence that in a building of this sort there should have been adequate steel bracing of the trusses in the roof of the building. There was evidence by several witnesses that when a person stood in the building on his toes and let his heels come down, the building shook, and, further, that the heavy motor traffic on the street caused the building to shake. All that was attributed to lack of specification of adequate steel work. In fact it was admitted by the architect, in reply, that in the choir loft this vibration was apparent, but he did not think the vibration was “of a magnitude to endanger the building,” Macdonald, in reply, said that he had noticed vibration in the choir gallery “by rising on the toes and striking the floor with my heels.” If the building shook from time to time because of passing motor traffic or of some slight movement inside the building itself, it is quite apparent that the building would crack here and there and that the cracks would increase with the passing of time and that rain water would very readily work itself into the building through the cracks and cause a progressive state of disturbance and damage. Those two problems, one the improper use of hollow tiles with brick and mortar, and the other the absence of bracing in the steel work, were vital matters in the case and deserved very special analysis and consideration, and we do not consider a bare finding of fact, inconsistent with these explanations of the causes of the trouble, presents any serious difficulty to a complete review of the evidence.
But assuming in favour of the plaintiffs that these cracks in the walls were caused by faulty masonry work of the contractor in not having properly bonded the bricks and tiles, is that “faulty materials or workmanship which shall appear within a period of one year from the date of completion of the work” within the contemplation of article 16? Is that the sort of thing that was covered or intended to be covered by that provision in the contract reserving the rights of the owner? The effect of article 16 is plainly to limit the responsibility of the contractor to faulty materials or workmanship which do not appear until after the completion and acceptance of the work. Manifestly no remedy is preserved against the contractor after completion and acceptance of the work if the defects had appeared before that time. What constitutes an “appearance” is a matter of construction, and, to determine whether or not faulty materials or workmanship did appear, one must know the facts. If the work was done in the open and the architect in the ordinary course would see the work and the fault was of such a character that it must have been apparent to any competent architect observing the work, it could not be said that the fault was not apparent within the meaning of article 16 before the work was accepted and paid for. The failure of an architect to note what was before his eyes, or to realize the possible ultimate consequences, is really of no relevancy to the question whether or not the fault was apparent. Assuming, and it was the basis of the plaintiffs’ case, that the mortar was not properly laid and that that was the cause of the damages sought to be recovered, it was the duty of the architect to ascertain that at the time the mortar was being put into the building. Construction commenced about the middle of November, 1930, and by December 4 or 5 the architect had left for England and did not return till about January 7 or 8. It was the architect’s duty to give close supervision to the construction. If he is now right in his contention that it was faulty masonry work and not defective design and specifications, that could have been observed and remedied during the progress of the building with very little, if any, expense or loss to any one. Architects are not required to do everything in the way of watching the construction of buildings under their charge, but they are required to give such care and attention to the work while it is in progress, as the nature and difficulties of the particular work reasonably demand. To check just such defects in masonry as it is suggested occurred during the progress of the work in this building was one of the very things under the special circumstances of this case that the architect was in duty bound to do. It was admittedly a bricklaying job of more than ordinary difficulty. Where an architect fails to do that which he ought to have done he may himself be liable to the owner for very large damages on the basis of the cost of tearing down and reconstructing that which may not become known to the owner for a very considerable time after the work is completed and at a time when the cost of remedying the defects has become very heavy, and yet the contractor himself may remain liable only for what it would have cost to have remedied those defects at the time they occurred had the architect done his duty and required the contractor then to remedy the faults. (Halsbury, 2nd ed., Vol. 3, pp. 277, 340 and 341.)
Article 16 must be read in the light of the necessity for the constant supervision of this particular work and of the fact that there is no suggestion of bad faith or fraud or concealment on the part of the contractor. If the defects now complained of were the sort of thing that the architect would observe if he gave the requisite supervision to the work, then it can not fairly be said that the defects were not apparent within the contemplation of article 16 before the completion and acceptance of the work.
If we can regard the physical conditions which permitted the water to leak through as in themselves constituting faults within article 16, then it is clear that they were apparent before the completion of the work. If it is said that the leaks themselves did not constitute faulty workmanship within the meaning of article 16 and that it was not until after the completion of the work that the fact that they were due to faulty workmanship was ascertained, the fact of the faulty workmanship to which they were ascribed appeared during the progress of the work. If, on the other hand, the leaks are to be treated as the consequences of the fault found by the trial judge (the failure to bind the bricks and mortar), then that fault is one which became apparent during the progress of the work.
That the fact of substantial leakages, whatever the cause, was known to the owners before they accepted the work and paid the balance of the contract price, is made abundantly plain by the language of the letter, Exhibit 25. There is no finding by the trial judge that the architect did not know of the faulty materials or workmanship or that the circumstances were such that knowledge is not to be imputed to him. The trial judge dealt with the ascertainment of the cause of the leakages and so doing misdirected himself on the essential point on that branch of the case, which was the appearance rather than the cause of the trouble. A new building that is leaking throughout plainly indicates either bad workmanship or materials, on the one hand, or faulty design and inadequate specifications, on the other hand. Article 16 confines the contractor’s responsibility to the former, and the date of the appearance thereof becomes of great importance. The case against the contractor has not really been dealt with from that point of view.
The precise scope of the letter, Exhibit 25, is really a question of fact, and, when the words which appear in the letter, “certain defects” and “water leaking into the church,” are interpreted by reference to the circumstances under which the letter was delivered and accepted, it may well be that the undertaking covered by the letter had the effect of superseding, to the extent of the matters covered by the letter, the obligation of the contractor imposed by article 16; and as the action against the contractor is based entirely upon the claim for damages resulting from the leakages throughout the church, that would in itself be an end to the claim. In view of our conclusion to grant a new trial on the issues arising out of article 16, we refrain from further discussion of the meaning and effect of Exhibit 25 in this connection, as this aspect of the case will, no doubt, be fully developed on the rehearing.
But in any event the action was one for damages, and if there was liability upon the contractor under article 16, it rested upon the plaintiffs to establish upon a proper measure of damages what were in fact the actual damages. No such attempt was made in this case. The two expert witnesses of the plaintiffs at the trial never saw the building until January, 1934. Harrington admitted in cross-examination that time had its effect on the conditions as he saw them; that the defects would have been more easily dealt with in the spring of 1932; and that each application of frost unquestionably made the condition of the joints and bondings worse. Lothian, the architect, agreed with the statement in the Sheppard report that Blonde reported having flooded the roof about September, 1931, with the drains blocked, for a period of three hours, with no visible sign of leakage. Neither Macdonald nor Harrington, the two expert witnesses upon whose evidence the trial judge fixed the amount of damages, attempted to estimate the cost of making the repairs except at the date they were giving their evidence, February, 1934—two and a half years after the completion of the building. The cost of reconstruction at that date was not the measure of damages, but even if it were their evidence as to the amount of damages was entirely unsatisfactory. Harrington in examination in chief was asked
Now then, from your observations, and having regard to your experience in these matters, what would you estimate as the cost of making what you consider the necessary repairs to remedy so far as possible the conditions of which you have spoken?
Ans. I would not hazard making any estimate.
Pressed further by counsel, he said,
I would not attempt to make an estimate of that,
and then proceeded to give some figures which
I would think * * * would be necessary to put that work to some extent back to what it was intended to be originally. * * *
and gives as his explanation for not being able to make an estimate of costs, that you have
to have something before you in the form of drawings or specifications from which you get your quantities and judge the amount of work.
Cross-examined on the figures he gave, he said, I have made a few calculations here which I would not care to class as an estimate, but a guess.
Macdonald, when asked his opinion of the cost of making repairs to the conditions as he found them, said,
I must make the same statement as Mr. Harrington as regards that * * *
That was the evidence upon which the trial judge based his assessment of damages. The principle of measuring damages on the basis of the cost of reconstruction of the building as it stood at the date of the trial, was clearly wrong, quite apart from the very unsatisfactory nature of the evidence adduced even on that basis. Lothian, the architect, under cross‑examination, after describing the conditions of the mortar and brick, gave this evidence:
Q. These conditions are the result of an examination in October?
A. Early in 1932.
Q. The attack from within had been made when?
A. Sometime late in 1931.
Q. If the investigation had been made before the final certificate was issued, it would have revealed the conditions we find now?
A. Yes, sir.
Ibbetson, a building contractor called by the plaintiffs, who had been employed by the plaintiffs to make repairs in the fall of 1932 and “a little work” the following spring, was asked why he did not go on and make what he considered the necessary repairs and alterations at the time. His answer was,
The main reason was the lack of funds available for the work
on the part of the plaintiffs. The plaintiff Doe, when asked by his own counsel why Ibbetson was not instructed to proceed and remedy the whole situation that appeared when Ibbetson was there, said,
Approaching winter would render his work imperfect. He had other work to do. I arranged with him to return the next year to finish the work.
Q. Anything else?
A. Yes, finances. I do not wish to mention that, though.
When Ibbetson was asked by the trial judge what would be the total cost of putting the building in proper repair, he answered,
I would ask to be excused from saying that.
Mr. Justice Riddell in the Court of Appeal said he was wholly unable from the evidence to say whether any liability had been incurred under article 16, and we entirely agree with that statement. He concluded that if the plaintiffs so desired, they should be allowed to have a new trial on that issue alone. Now after the whole matter has been heard again on appeal to this Court, it would be most unfortunate for all parties if there had to be a new trial. But what can we do? The evidence was never really directed to the vital issue. When a trial for any reason becomes abortive it is a privilege and the duty of the court to come to the assistance of the parties to prevent the defeat of rights that may actually exist (to adapt the words of Lord Shaw of Dunfermline in Cameron v. Cuddy[2]. We cannot, however, in this case supply the defects that have occurred, and we can only hope that the