VOL. V.] EXCHEQUER COURT REPORTS. 19 JAMES MURRAY AND MERRITT A. 1895 CLEVELAND CLAIMANTS ; " Nov. 23. AND HER MAJESTY THE QUEEN .....DEFENDANT. Contract for construction of canal works--Progress estimates—Certificate of engineer—Condition precedent to right to recover--Position of court' in regard to revising same—Refusal to give certificate. By their contract with the Crown for the construction of certain works on the Galops Canal the claimants agreed, inter alia, that cash payments, equal to 90 per cent of the work done, approximately made up from returns of progress measurements and computed at contract prices, should be made to them monthly on the written certificate of the engineer, stating that the work so certified by him had been executed to his satisfaction and amounted to a sum computed as above mentioned. This certificate was to be approved by the Minister of Railways and Canals, and to constitute "a condition precedent to the right of the contractors to be paid the said 90 per cent or any part thereof." It was further agreed that the remaining 10 per cent "should be retained until the final completion of the whole work to the satisfaction of the chief engineer for the time being having control over the work,, and that within two months after such completion, the remaining 10 per cent would be paid." It was also agreed that the written certificate of the engineer certifying to the final completion of said works to his satisfaction should be a condition precedent to the right of the contractors to ' be paid' the remaining 10 per cent or any part thereof. Held, that as the parties had agreed to be bound by the. judgment of the engineer, the court had no power to alter or correct any certificate given by him in pursuance of the terms of the contract. 2. That in the absence of fraud on the part of the engineer in declining to give a certificate for a claim put forward by the contractors, the court will not review his decision. THIS matter came before the Exchequer. Court upon a reference from the Department of Railways and Canals of Canada, under the provisions of section 23 2~
20 EXCHEQUER COURT REPORTS. [VOL. V. 1895 of The Exchequer Court Act, 50 and 51 Viet. Cap. 16. MURRAY & No pleading were filed on either side, the case being CLEVELAND v.. heard and the evidence taken upon the reference. TRE The claimants alleged that the sum of $8,907.30 . -was QUEEN. due to them upon a contract, dated the 14th November, statement 1888, for the enlargement and deepening of the upper of Facts. or western end of the Galops Canal on the St. Lawrence River and the construction of the necessary locks,, weirs and other works to effect that object. At the time the alleged claim arose the work under contract had proceeded for several. years, and the contractors had received and been paid a large sum on progress estimates, from time to time, as the work progressed. The claimants complained that by the progress estimate of the 26th September, 1893, which covered the work doue and material delivered on the contract up to the 31st August, 1893, the Chief Engineer of the Department of Railways and Canals had undertaken to re-classify some of the work which had appeared in the former progress estimate of March, 1893: that by this re-classification the total amount certified for payment was $9,897.00 less than it should be, and that the said sum less ten per cent drawback, reducing it to $8,907.30, should have been paid them on the Septem-ber estimate, in addition to the amount they then received. The particular work in question with respect to which the re-classification had been made, came under item No. 6 of the schedule in the contract, which read as follows :— " Earth excavation—Over water-line for the widen-" ing of canal on the north side, from a point 100 feet " east of present guard-lock to end of section, includ- ing all kind of material (solid rock and boulders con-" taining one-fourth of a cubic yard excepted), hauling
VOL. V.] EXCHEQUER COURT REPORTS: 2l " the same across canal and for a distance of 700 feet to 1895 " 3,600 feet • to form a dam on Round Bay shoal to in- My R " close space for lock ..per cubic yard 50 cents." CLEVELAND The specifications showed that a lock and darn were Tx.E to be constructed. The earth material for the making Q ED. of the dam was to be procured from a point on the Sta tement ta. side of the river opposite to the site of the dam, which point was called " McLaughlin's Hill." The quantity of material in this hill proved to be insufficient by some 39,588 cubic yards for the completion of the work. For 'the hauling and placing of material from the place named and depositing in the dam, the contractors were entitled under item No. 6, to be paid 50 cents per cubic yard of the schedule of prices. The deficiency was made up with the approval of the engineer in charge of the ' works, by using the material taken from the lock-pit to complete the work of the dam. The lock-pit was immediately adjacent to the dam and by the 8th item. of the said schedule, the material from the lock-pit was to be carried a distance of. 1,500 feet and deposited in Round Bay, and for'so haul- ing and depositing such material, the contractors were to be paid 60 cents per cubic yard. The material was not returned in the monthly estimates, from time to time, at fifty cents a cubic yard for the taking of it over and putting it into the dam, the resident engineer saying that he had no formal instruct tions from Mr: Page, the then Chief Engineer, to return it under any particular item of the schedule so far as the work of taking it over and putting it into the dam was concerned. The cl ~ aimants had then already been paid for the excavation of it under items 8' and 13 of the schedule. Mr. Page died in July, 1890, and no material had up. to that time been so included 'in the estimates. In September, 1890, on the contractors - further _urging
22 EXCHEQUER COURT REPORTS. [VOL. V. 1895 that it be included in the monthly estimates, the resi- IIIRRAY & dent engineer, Mr. Haycock, as directed by the then CLEVELAND Chief Engineer, the late Mr. Trudeau, with the approval V. THE of the then Minister of Railways and Canals, the late QUEEN. Right Hon. Sir John A. Macdonald, returned it, one-Statement half in the October estimate and one-half in the of Facts. November estimate for 1890, under item 6 of the schedule of prices, that is to say fifty cents a cubic yard, the same as the material taken from McLaughlin's Point. These estimates were duly signed by the Chief Engineer and approved of by the Minister and paid over to the claimants, and from month to month thereafter until March, 1893, the works progressed and estimates were duly issued and paid. In December, 1892, Mr. Trudeau ceased to be chief engineer, and was succeeded by Mr. Schreiber, who certified the monthly estimates for December, 1892, and February, 1893, there being none for January. After February, 1893, Mr. Schreiber caused an examination and re-measurement of the works to be made ; and in consequence, although the works were being still prosecuted, no estimate was issued after February until September, 1893, the one numbered 45, which takes the place of estimates 43, 44 and 45. By the examination and re-measurement referred to, Mr. Schreiber, having ascertained that the claimants had been paid for the excavating of the 39,588 cubic yards according to the prices partly of item 8 and partly of item 13 of the schedule, and also at fifty cents a cubic yard for carrying it over and putting it into the dam, formed the opinion that they should not have been paid for it under both these classifications, and reported that the fifty cents a cubic yard should be taken back from them as having been improperly paid. The result of this re-classification was that the
VOL. V.] EXCHEQUER COURT REPORTS. 23 progress estimate of September, 1893, certified the total 1895 value of work performed and materials furnished by MURRAY & the contractors under their contract: up to the 81st CLEVELAND August, 1893, at the ; sum of $722,592.53, instead of, TEE as the contractors claimed it should have been, the QIIEN' sum of $732,489.53. The difference between these or M me t sums with the ten per cent drawback deducted, is the sum of $8,907.30, the amount of the claim. The case came on for hearing on the 14th December, 1894, before the Judge of the Exchequer Court, who, on the same day, gave judgment declaring the claim- ants to be entitled to the amount of their claim and costs, leave being reserved to the defendant to move to set aside the judgment upon matters of law. On the 29th March, ,1895, the defendant moved to set aside the judgment, pursuant to leave. W. D. Hogg, Q.C., in suppport of motion :— This action, being brought on a progress estimate, will not lie. (Emden on Building Contracts, p. 121 ; Hudson on Building Contracts, pp. 272, 273. Tharsis Sulphur Co. y. McElroy) (L). 2ndly. Even if my first point were refuted, claimants have no right of action because the certificate upon which they rely is not made within the requirements of the contract ; and it did not have' the approval of the Minister of Railways and Canals. 3rdly. The Chief Engineer had no right to deviate from the contract, and it is only upon a' deviation • that the claimants could have a locus standi here. D' Alton McCarthy, Q.C., (with whom was A. Ferguson, Q.C.) contra. The Crown has not paid the full amount of the value of the work done between the end of the period covered by estimate No. 42, and the end of that covered by estimate No. 45, as certified to in the latter. (1) . 3 App. Cas. 1040. R
24 EXCH1 Q U ER COURT REPORTS. [VOL. V. 1895 ..,~... The balance is the equivalent of the amount in ques-MURRAY & tion, and is not paid because Mr. Schreiber assumed a CLEVELAND v. right, which he had not, of revising the estimates for TEE October and November, 1890, and of reducing the QUEY.rr. price previously paid for putting into the dam the Argument of Counsel, 39,588 cubic yards of material in question, and of trying to force the claimants to pay back the difference between what they had been paid for this item and what he allowed for it in estimate No. 45. There is no authority under the contract for the successor of the Chief Engineer to revise the progress estimates of his predecessor ; and, even if the price of fifty cents a yard was not regularly fixed and determined, and even if the order to do the work was not regularly given under the contract, these objections cannot now be raised, as they have by the payment of the estimates been waived. The work for which payment is now claimed is in reality part of the work done subsequent to February, 1893, and it has been certified to in estimate No. 45. If the Chief Engineer has given a certificate once that the work claimed for has been done, and that it is worth so much at contract prices, that is all that is necessary. The contractor cannot be refused payment because the certificate is not in a certain form. Each progress estimate ought, according to clause 25 of the contract, to show only the work done in the previous month ; not for the .whole period :from the beginning of the work. If this mode had been adopted by the Department instead of the present one of including all the work over again in each month, the claimants' contention would be perfectly clear on the face of estimate No. 45. Then who is to settle this question as to the price of the material ? To determine whether it should be 25, 40, or 60 cents ? I say that the authority to determine R ~
. VOL. V.] EXCHEQUER COURT REPORTS. 25 that fact must be found within the four corners of this 1895 contract. My contention is that it was quite within MURRAY & the competency of the engineer to make the arrange- CLEVELAND ment he did with the contractors. The work that had . THE to be done was the making of this dump. What was QUEEN. done was not new work not contemplated by the con- Ar o w f ; nn s lent Cu el. tract, and no new written order was required for it. What was done was merely a change made in order to make the work for which the contract was entered into, less expensive. What the engineer did he was clearly empowered to do under the provisions of the contract. Clause 8 of the contract gives the right of deciding upon the price of the work to the engineer in charge, and it says that his decision shall be final. •Now the engineer determined that this work had to be paid for under item 6 of the contract. If that be so, and it is so, how dfles the argument of my learned friend apply ? Counsel for the Crown says that this is an alteration of the contract under clause 5. And he further contends that there should be an authority in writing for the work done before the claimants can maintain this action, although they have done the work. Now it is clear that in contracts of this class, of a class which provide that no claim should be made for additional work done without the written order of some person in authority—and they are usually building contracts —a written certificate of the work done made after the _ work is completed, is of itself sufficient, and bars the employer from denying the sufficiency of his servant's, that is the engineer's, authority. [He cites Goodyear v. Weymouth (1) ; Connor and 011ey v. Belfast Water Commissioners (2).; Harvey y. Lawrence (3).] Now it is true that all these cases are upon final certificates, there are (3) 35 L. J. C. P. 12. (2) 5 L. R. (Ir.) C. 'L: 55. (3) 15 L. T. N. S. 571. R
26 EXCHEQUER COURT REPORTS. [VOL. V. 1895 no cases in regard to progress estimates upon this MURRAY & point. But there is nothing in the facts of the case CLEVELAND V. before your Lordship to exclude the principles of law THE as laid down in the cases I have cited. The case of QUEEN. Tharsis Sulphur Co., etc. y. McElroy (ubi sup.), does not ô C": apply to the facts of this case. In that case there was a positive expression of intention that nothing would be due until the work was done, but that advances might be made under the terms set out in the contract. Now in the case before your Lordship, we agree to do the work, and Her. Majesty agrees to pay us advances on progress estimates. That is, we are to be paid in the manner set out in the contract at length. [He cites Pickering v. Ilfracombe Ry. Co. (1) ; also in Hudson on Building Contracts (2).] Counsel for the Crown's next point was that no action would lie on this certificate because it was not approved by the Minister, but he loses sight of the fact that the money has been paid. I maintain that an action properly lies upon the certificate, and that inasmuch as the certificate has been acted upon by the parties it was not competent for the engineer, Mr. Col-lingwood Schreiber, to correct it. The certificate having had the approval of Mr. Trudeau, it was not open to Mr. Schreiber to correct it. [He cites Freeman y. Jefries (3).] All the evidence points to the fact that there is no mistake in the certificate, and it could not be corrected on that ground. The certificate we are entitled to is the certificate of the engineer for the time being, and his successor cannot correct it. The work has been done and has been certified to in accordance with the law and the contract, and therefore we are entitled to recover. [He cites Goodyear v. Weymouth (4) ; Harvey y. Lawrence (5).] (1) L. R. 3 C. P. 235. (3) L. R. 4 Ex. 189. (2) P. 276. (4) 35 L. J. C. P. 12. (5) 15 L. T. N. S. 71. R
VOL. V.] EXCHEQUER COURT REPORTS. 27 THE JUDGE OF THE EXCHEQUER COURT now (Nov- 1895 ember 23rd, 1895,) delivered judgment. MURRAY& The claimants' demand to be paid the sum of CLEVE LAND $8,907.30, in controversy in this case, is, I think,-on. the THE merits of that controversy, a just one. But the Crown QUEEN. says, among other defences to which it will not be R for° necessary to refer, that for this sum the claimants have not procured, as required by the contract on which the action is founded, the certificate of the engineer and the approval of such certificate by the Minister of Rail- ways and Canals, and that for that reason the judg- ment for the claimants entered in this case should be set aside. That contention must, it seems to me, prevail. For the claimants it is argued that the progress estimate or certificate of 26th September, 1893, is suffi- cient to sustain the action. That is a certificate that - the total value of ork performed and materials fur- nished by the claimants under their contract ûp to the 31st August, 1893, was $722,592.53, the drawback to be retained $72,252.53, and the • net amount then due $650,340.00, less previous payments. The latter sum has been paid in full ; there is no dispute about that. But what happened to give rise to the present contro- versy was this : In the progress estimate next preced- ing that of the 26th of September, 1893, that is in the certificate of March, 1893, the engineer had returned the total amount of work done under item 6 of the description of work given in the 24th clause of the contract at 160,810 cubic yards at 50 cents per cubic yard. In the progress estimate of the 26th of Septem- ber certain reductions .and a re-classification of the work done were made ; and, among others not now in ques- tion, the total work under such item 6 was reduced by 39,588 cubic yards, which were elsewhere, under the re-classification, returned at 25 cents per cubic yard. The result was to reduce the total amount that but for
28 EXCHEQUER COURT REPORTS. [VOL. V. 1895 such re-classification would have been certified for, by MIIRRAY Sc 25 cents a cubic yard on 39,588 yards, or by a sum of CLEVELAND v. $9,897.00, from which, deducting the ten per cent. for TEE drawback, we get the $8,907.30 now in question. QUEEN. , Between these two progress estimates the new work moo' described in item 6, referred to, amounted to only 1,209 Jndsnenc, cubic yards. If it had happened that such new work had amounted to 39,588 cubic yards, or more, it would have been obvious of course that the effect of what the engineer did was to prevent the claimants from getting for such 39,588 cubic yards of new work the price prescribed in item 6 and to give a lesser price under another classification. But because the work of the description mentioned in such item 6, done between the dates of the two progress estimates referred to, was less than 39,588 cubic yards the immediate result was that part, and as it happened the larger part, of the reduction occasioned by the re-classification of that . quantity went to reduce the amount which the claimants were entitled to for other work about which there was no dispute and for which the engineer was certifying. For that reason it is argued that the court should treat the progress estimates of September 26th as being in fact and substance a certificate for $732,-489.53, with an amount of $9,897.00 deducted from or charged against it for insufficient reasons ; that in that view the engineer has in fact certified for $9,897.00, on which the sum of $8,907.30, for which judgment was entered, is actually due and has not been paid. With that view I cannot agree. What appears to me to be perfectly clear and plain about these certificates or progress estimates which the engineer has given, is that I have no right or authority to alter or correct them. To do so would be to substitute my judgment and certificate for his in a case in which the parties have agreed to be bound by his judgment and his certificate. Turning to the certificate of September 26th,
VOL. V1]. EXCHEQUER COURT REPORTS. 29 1893, I find that he certifies that the total value of the 1895 work performed and materials furnished by the claim- MIIRA & ants up to the 31st of August, 1893, was $722,592.53. CLEVELAND. That sum may be right or it may be wrong.' It is un: T vf iE doubtedly the sum that he intended to certify for. QIIEN'• There is no mistake about - that, and I; must, I think, nern8 take the certificate as I find it and for-the sum therein Juag4,nent- mentioned, neither more-nor less. It is conceded that of • that sum the claimants have been paid all that is. due to them. •If the amount' now in controversy had been 'certified for it .too would no doubt have been paid. It is because the engineer' has refused to give his certificate foi such aMount that the parties are in court at all. That is the broad fact -of the case, 'and although I 'dô not think his reason for refusing to cer- tify to be a. good reason, the claimants have agreed to abide by his judgment. It is conceded,. as I under_ stand the argument,. that if any mistake . had- in fact• been made in the earlier progress estimates either as to quantity of work done, or in the classification. of such work, the engineer might, in the certificate of Septem- ber 26th, have ,corrected such' mistake, and. the claim- ants would have'had ILO cause of complaint. That is, fox a good reason he might have revised the quantities or classification. But then the engineer is, in , the absence 'of fraud- or .improper conduct, of which there is not the slightest suggestion .in this ease, the judge of whether the reason or . grounds 'upon which he 'acts or refuses to act are sufficient or ' insufficient, ' and., what he has done or not doxie is in either • case equally beyond review here. The judgment. for the claimants herein Will be.'set aside, and judgment entered for the defendant with costs. Judgment accordingly. - Solicitor for claimants_: A. Ferguson. Solicitors for defendant O'Connor ci^ Hogg.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.