MDC Advisor® Issue 80 – Choosing The Right Expert

Choosing the Right Expert: Lessons in Delay Analysis and Credibility from Dependable
Mechanical Systems v. Ledcor

By: Stephen M. Rymal, P.E., Esq.

In the world of construction claims and litigation, it can be difficult to identify “bright-line” tests for evidentiary proofs, particularly where expert testimony
is involved. There are issues surrounding the type and volume of evidence supporting each party’s position as well as the methods used by the experts to bolster their credibility.

However, in the case of Dependable Mechanical Systems v. Ledcor Construction Limited, 2025 ONSC 5100 (CanLII), the Court handed down a lengthy decision detailing not only the evidentiary basis for each of its conclusions but also the importance of the methods used by the experts that lend credibility
to their testimony. This case is rich in facts and judicial decision-making, which makes it a paradigm case study in construction litigation.

The case involves the construction of a ten (10)- story mixed-use condominium in Toronto, Canada. The owner contracted with Ledcor Construction Limited (Ledcor) on October 02, 2017, as the construction manager at risk on a fee-plus-cost basis. Substantial completion was scheduled for September 05, 2019, or 12 months later. In turn, Ledcor subcontracted the mechanical work to Dependable Mechanical Systems (DMS) for the fixed price of $3,751,500.00 dated May 05, 2018.

Delays occurred from the start with soil contamination and concrete forming pushing substantial completion back two (2) months to November 13, 2019. Additional delays with plumbing and HVAC permits pushed substantial completion back a further three (3) months to February 11, 2020 with mechanical and electrical distribution completion set for October 03, 2019.

Despite these early setbacks, Ledcor set up a Suite Finishing Matrix to sequence and coordinate the trades on each of the eight (8) residential floors. The mechanical installation was to follow the framing work, giving DMS five (5) days on each floor, ending up at the 10 floor on September th 27, 2019. Unfortunately, the mechanical work fell behind schedule, and Ledcor issued a written notice of default to DMS on September 12, 2029. The letter cited three (3) reasons for the default – failure to properly man the job with properly skilled workers, failure to work the hours required by the Subcontract schedule, and failure to perform its work properly and diligently. DMS had forty-eight (48) hours to deliver a plan of correction and schedule. DMS responded on September 16, 2019, denying the defaults,
and on September 17th, emailed DMS its manpower commitments to finish the work.

Although DMS increased its on-site manpower, Ledcor was still disappointed with its performance. On January 02, 2020, Ledcor terminated DMS, and on January 6th, Ledcor contracted with Zencorp to complete the mechanical work. The project was substantially complete on January 31, 2021. On April 02, 202, DMS served a statement of claim perfecting its lien claim, and Ledcor served its defenses and counterclaim. On January 07, 2025, the trial started and lasted thirteen (13) days. In addition to fact witnesses, each party had experts.

The most significant finding by the Court concerned the role of expert reports and trial testimony in assigning responsibility for project delays. Ledcor claimed a delay of 162 working days and $762,534.00 in delay damages from DMS. The Court denied this claim simply because neither Ledcor nor DMS performed a critical path analysis of the project. In doing so, the Court rejected the “impacted-as-planned” method by DMS that attempted to show that the delay was the result of forces beyond its control.

The Court made additional findings that are instructive regarding the importance of choosing the right expert. In particular, the Court addressed the credibility of the experts by examining the basis for their opinions. Ledcor’s expert anchored its opinion in the Subcontract’s terms and conditions and in detailed site records and schedules, including the superintendent’s daily reports, which listed crew sizes.
Ledcor’s expert also pointed out clearly that DMS never met its own manpower commitments, which was the single most “dominant delay.”

On the other hand, the Court determined that the expert for DMS was less credible due, in part, to its failure to examine the discovery transcripts and the affidavits, its failure to attend the entire trial, its failure to focus on DMS performance by focusing on the activities of other parties, and its failure to pay attention to the terms of the Subcontract. That last failure was exposed during cross-examination, which is instructive for litigation attorneys: vigorously question experts not just on their opinions at large, but also on the factual foundations for those opinions, including which evidence and witnesses they relied upon.

Overall, this case offers detailed insights into the types and volume of evidence that each party needs to bring to trial, and the credibility factors that experts need to consider when investigating and developing their methods of analysis and opinions.
In the next newsletter, we will examine the Court’s detailed analysis of damages. The Court made it clear that Ledcor failed to offer any expert testimony on damages, leaving the Court to ferret out each individual claim and invoice on its own. Stay tuned.

Design Risk-How to Design a Brave
New World

A journey of one thousand miles begins with the first step. However, any journey carries with it some element of risk and possible pitfalls along the way. To better your chances of reaching your desired destination, it is important that the first
step be a step in the right direction. Design is often the first major step in executing any project. As that ‘first step’, design is a key component of a project’s overall risk potential. Following is a discussion of some risk elements in the design process.
We are all aware of the risk in design as it relates to the owner or client. “Errors & Omissions” and the “standard of care” are common concerns and considerations when an owner thinks about ‘design risk’. Poor scope definition, inaccurate or incomplete drawings and ‘over design’ with respect to budget are routine issues which arise on projects. The impact to the project because of a failure to
meet the “standard of care” by design professionals has been established in a number of case histories and is well documented from both a legal and design practice perspective. Many programs and policies have been developed to mitigate Errors & Omissions risk. Quality Control/Quality Assurance programs, design check lists and project postmortem ‘lessons learned’ reviews have greatly aided design firms in managing the design process and mitigating these risks. However, in
today’s ‘time to market’ crunch environment the design process can introduce several new areas of potential risk which must be managed or mitigated to protect both the owner and the designer.

The introduction of new tools and technologies into the design process such as Building Information Modeling (BIM), ‘smart drawings’ and 4D CAD can impose risk in unexpected ways. The need for speed in the adoption of new tools and components may have designers using them before they have completely grasped the tool’s intricacies. Simply loading new software does not make one competent in its use. In other instances, there may be embedded information in the software which is not compatible with other design tools or data previously used and relied upon by the design team.

Risk can also be introduced into projects when new or developing construction technologies or materials are being employed on a project. The cautious designer would typically lean toward technologies he or she knows well or have been in the marketplace for some time. However, the marketplace pushes change in systems, equipment, materials and methodologies in the industry and these changes can be a good thing. If you are not staying ahead of those changes you will likely be run over by them. The wave of exterior finish issues in construction today serve to illustrate how a new product or technique can change the industry landscape and have major impacts, some of which are not felt until years later. I would hazard to guess that most designers believe that issues associated with the interface of new and old construction materials are addressed by the manufacturers before a product enters the market. Designers must be careful when employing new construction technologies, techniques, systems and materials on projects. While the owner can
expect and demand that the design firm be responsible for its work; the upgrade/replacement cycle is so accelerated that often times the designer does not have enough time to fully research, test and integrate new components into his work.

Another area of design risk involves new technologies to be employed by the owner as a key part of the ‘program’. This type of risk is more commonly found in high-tech industries or process-based projects. In many high-tech industries and projects the functionality of the building is very difficult to separate from the functionality of the process systems within it. In these projects the process and the facility which houses it are very closely integrated. You cannot simply switch ‘tenants’ like you
might an office building without considerable and expensive retrofit work. Many of these projects are very time-to-market sensitive and often the manufacturing process or product itself are brand new.

Design and construction schedules often overlap such that facility designs are being finalized while integral process equipment and technologies are still being determined. Where does responsibility (and liability) lie for a feature or facility which does something that has never been done before? When the need for rapid delivery meets with brand new technologies the potential for problems is
further multiplied. The use of fast track and hyper fast track execution strategies can create circumstances where designs seem to be completed ‘on the fly’ and errors or omissions can more easily occur. The design must be flexible enough to accommodate the eventual project or process requirements, but firm enough to adequately control construction scope and cost.

In today’s accelerated construction climate, a wise owner wants his designer to demonstrate appropriate design risk management skills as well as design expertise. These skills include early and clear scope definition, schedule development and budget definition and control. Proper design management and performance are the first and largest steps a design firm can make towards successful risk management for the benefit of the designer and owner. A key element in managing risk is communication. The quality and timeliness of early communication can help to greatly reduce the likelihood of misunderstandings and potential disputes. This
communication ‘philosophy’ can be translated into tangible activities which should be discussed and agreed upon by all concerned (including design subconsultants) as the project progresses. Clear definition of client expectations, designer’s intent of acceptable performance, and the identification of potential ‘gaps’ where all of these items met can ensure that all parties are viewing the project
from a similar frame of reference.
In the current dynamic environment of new project delivery and completion methods project risk is present in new and more subtle forms and must be recognized and minimized by the project participants as part of their normal activities in order to deliver high quality, timely and successful projects.