This is the lsl Affidavit

OCT G 4 2'U 13 )j of Markus Zurcher in this case

and was-made on 26/Sept./2013

S-i3f 4tjg
No.
Vancouver Registry

In the Supreme Court of British Columbia

?
Between

GEOBRUGG AG,
Petitioner
i i and

LLOYD'S UNDERWRITERS
1' Respondents
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AFFIDAVIT
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~) I, Markus Zurcher, with a business address at Salmsacherstrasse 9, CH-8590 Romanshorn,

Switzerland, Businessman, AFFIRM THAT:

I S
1. I am the Business Unit Manager for the Rope Architecture Division of the Petitioner,
Geobrugg AG ("Geobrugg") and for its sister company Fatzer AG, and as such I have personal
knowledge of the matters and facts hereinafter deposed to.
2. I am authorized to swear this Affidavit on behalf of Geobrugg.

3. This Affidavit is sworn in support of the Petition being filed by Geobrugg dated
September 26, 2013, and where applicable I adopt the terms defined therein.

4. I have read the facts set out in the Petition and confirm they are true.

5. I was the Project Manager for Geobrugg during the BC Place Project and I had direct
dealings with representatives of Freyssinet and FIC throughout.

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 6. Geobrugg and its subsidiaries develop and produce cables made from high tensile steel
wire for structural rope (i.e. cable) applications. Geobrugg's Rope Architecture Division
manufactures, fabricates, supplies and provides on-site services for the installation of custom
designed wire structural ropes/cables used at stadiums and other structures for membrane/roofing
structures, such as at BC Place.

7. Pursuant to the Geobrugg Contract, Geobrugg was required to manufacture, fabricate and

supply the Cable System for the new roof at BC Place and where required, provide technical
assistance or supervision services during the installation, all in accordance with the Project
drawings and technical specifications from the Prime Contract. The Cable System, which is
required to structurally support the new roof, is an integral and indispensible part of the Project.

8. Geobrugg's responsibilities included detailing all cable assemblies and cast connections
based on the Project drawings and specifications, preparing shop drawings and related designs
for the Cable System, coordinating its work with other trades, testing, inspecting and certifying
the Cable Systems, detailing the cable assemblies and cast connections to accommodate the

jacking equipment and related hardware to allow Canam and Freyssinet to install and tension the
cables on site, preparing cable installation instructions for erection, and producing as-built
drawings upon completion of the Cable System erection.

9. Geobrugg provided the work and services noted above to manufacture, fabricate and
< supply the Cable System for the Project, including on-site work and services to assist with the
cable installation.

10. Initially, Geobrugg worked closely with Freyssinet in providing design and technical
advice on components of the Cable System before the shop drawings were prepared and
submitted for approval. Attached and marked collectively as Exhibit "A" to this my Affidavit
are true copies of correspondence between Geobrugg and Freyssinet regarding design and
technical issues related to the Cable System.

11. Once the design issues were resolved, Geobrugg prepared and submitted shop drawings
and cable installation instructions which were reviewed by the Project Engineer. Attached and
marked collectively as Exhibit "B" to this my Affidavit are true copies of sample shop drawings
and designs prepared by Geobrugg for the Project. Attached and marked as Exhibit "C" to this
my Affidavit is a true copy of the installation instructions which were prepared by Geobrugg for
erection of the Cable System.

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 12. The Cable System was then custom manufactured by Geobrugg for BC Place. Geobrugg
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assembled the component parts and fabricated the Cable System pursuant to the approved shop
drawings and designs prepared by Geobrugg, and the Project drawings and technical
specifications prepared by others, including Specification Division 5, Section 05191, Rev.l dated
October 23, 2009, "Structural Cables and Cast Steel Connections". Once fabricated, the Cable
9 "3'
System could not be used for another structure. Attached and marked collectively as
Exhibit "D" to this my Affidavit are true copies of photographs of the cable fabrication.

13. The Cable System was delivered to the Project site from May, 2010 to September, 2010.
There were some test cables, stock material and replacement materials delivered up to January,
2011, but the completed Cable System was delivered by September, 2010 as-required by
Freyssinet's construction schedule.
14'. Attached and marked collectively as Exhibit "E" to this my Affidavit are true copies of
Geobrugg's shipping documents dated May 12,2010 confirming the first shipment of the Cable
System to the Project site.
15. Attached and marked collectively as Exhibit "F" to this my Affidavit are true copies of
Geobrugg's shipping documents dated September 1 and August 31, 2010 confirming the final
shipment of the Cable System to the Project site (other than the replacement materials).
16. Following delivery of the cables to the Project site, Canam, Freyssinet and their
subcontractors erected and installed the Cable System, with all radial cable nets in place and
tensioned by May, 2011.

17. At the request of Freyssinet, Geobrugg attended the Project site at various times
throughout the Subcontract Work to provide work, supervision, testing and technical services
related to the installation of the Cable System.

18. Geobrugg's work and services at the Project site included as follows: advice on cable
markings and twisting of cables; advice on replacing cables from one cable net to another;
supervision during installation including advice on handling and pulling of cables; inspecting
cables for damage after cable nets had fallen and repairing any damage; unwinding cable coils
delivered to the site; checking cable markings and re-marking as required; checking cable
lengths before installation; testing installed cables and-fittings; cleaning grease from the surface
-TBS
of the cables (upon delivery and after erection and tensioning of the cable nets); installing
 ~)
absorbent wrapping on the upper cables to contain any grease leakage; installing permanent
gutters beneath the upper and lower cables to prevent any grease leakage; and ongoing
maintenance and cleaning of the cables and gutters.

19. In late October, 2010 Freyssinet requested that Geobrugg attend the Project site to
address issues affecting the initial installation of the Cable System. These included concerns
about the cable markings, proper installation of the clamps, possible twisting of the cables during
layout and installation, and grease noted on the surface of some cables.
20. Kai-J Thiem, a Project Engineer at Geobrugg, attended the BC Place site from October
27 to November 2, 2010 to observe the cable net installation and provide technical advice to
Freyssinet to address the concerns raised.
21. On November 10, 2010, Freyssinet requested my presence at the Project site to address
IV*

various issues affecting the cable installation. Freyssinet also requested that Geobrugg have a
technician on site to assist Freyssinet in checking the cable lengths, redoing missing marks on the
cables, checking the threaded rods and galvanization of special sockets, and cleaning grease from
the surface of the cables. Geobrugg subsequently provided the site assistance as requested.

22. Attached and marked collectively as Exhibit "G" to this my Affidavit is a true copy of
my email exchange with Freyssinet on November 10, 2010, confirming my upcoming visit in
response to Freyssinet's request for site assistance by Geobrugg.
23. I attended the Project site from December 11-15, 2010 Lo address various issues regarding
the Cable System and provide technical support and supervision to Freyssinet during the cable
installation at BC Place. Attached and marked as Exhibit "H" to this my Affidavit is a true copy
of my Site Visit report which summarizes the matters we discussed and advice provided during
my site visit, including technical issues with the cables, concerns about grease leakage, and
various administrative issues.

24. For example, in my Site Visit Report under the heading "Technical Issues Cables",
Geobrugg provided advice to Freyssinet regarding the cable markings (bullet item 2), damage to
hangers which occurred during erection that was unrelated to Geobrugg's work (item 3),
instructions to the erection crew on how to handle and manage the cables during installation
(items 5-6), inspection of and advice on possible cable damage to cable net R31 (items 7-9), and
repair of a damaged cable which fell during erection (item 10).
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32. From July to September, 2011, Geobrugg's work crew supplied and installed gutters
beneath the erected upper suspension cables and portions of the lower cables to contain any
potential grease leakage.
33. From September, 2011 onwards, Geobrugg's work crew continued to periodically
inspect and maintain the cables/gutters and clean off any grease leakage observed. From June to
July, 2012, Geobrugg also installed a fabric gutter system beneath the lower suspension cables to
supplement the existing gutters. Attached and marked collectively as Exhibit "L" to this my
Affidavit are true copies of photographs of the upper and lower suspension cable gutters installed
by Geobrugg.
34. Attached and marked collectively as Exhibit "M" to this my Affidavit is a true copy of a
summary of costs incurred, supporting purchase orders, and invoices paid by Geobrugg to effect
the site work and services at BC Place from January, 2011 to Decvember 31, 2012, which total
approximately $2 million.

AFFIRMED BEFORE ME at
Romanshom, Switzerland, on
26/Sept./2013.

MARKUS ZURCHER
A Public Notary in and for Switzerland

OFFICIAL LEGALIZATION

Seen for legalization oft the signature set in my presence by:

Mr. Markus Zurcher, born 04.01.1962, origin of Horgen ZH,

domiciled and resident in CH-9325 Roggwil, Weinbergstrasse 4,
who is personally known to me and who furbished proof of his
identity by producing his Identity Card Nr. E1146213.

CH-8590 Romanshom, 26th September 2013

NOTARY PUBLIC OF THE CITY OF
ROM, TZERLAND o^A*'.
Graci Tavamer-Hoffmann
Officii clerk in charge
 369
barnescraig This is Exhibit" ^ " referred to in the
& associates
a f fi d a v i t o f ^ k * L l M f ^ &
Sworn before me at .YM>lP.VW.%
this fa day or^gZaattSS^ 20J.3
August 13, 2013 BY COURIER

David Miachika
BORDEN LADNER GERVAIS
1200 Waterfront Centre
200 Burrard Street 13
PO Box 48600 2013
Vancouver, BC V7X 1T2

Dear Mr. Miachika:

Re: Geobrugg's Request for defence & Indemnity Coverage Under

Wrap-up Liability Policies for BC Place - Phase 2 Roof Project
Yo u r F i l e N o . : 5 5 9 0 4 9
Our File No.: 10069KHH

We write in response to your emails dated May 27 and June 17, 2013 in which you request
on behalf of your client, Geobrugg AG, ("Geobrugg"), coverage for a defence and indemnity
(the "Coverage") under Construction Wrap-Up Liability Policy B0901LB0914046000 (the
"Wrap-Up Policy") and Excess Policy B0901LB1014803000 (the Excess Policy) (The
Policies).

Geobrugg's request for Coverage is denied. The Claim does not have the possibility of
being covered because Geobrugg is not an Insured under the Policies. Furthermore, the
claim does not fall within the initial grant of coverage because there has not been an
Occurrence. As there is no coverage for this claim under the terms of the Policies,
Geobrugg is not entitled to indemnification under its terms and, accordingly, we advise that
there is no duty to defend or indemnify Geobrugg should the Court ultimately rule against
Geobrugg in the claim.

The basis for this denial of coverage is set out in the paragraphs which follow:

Facts

1. The Wrap-Up and Excess Policies are for the BC Place Retractable Stadium Roof
Project (the "Project"); which Project is owned by BC Pavilion Corporation ("PavCo")
and which was constructed by PCL Constructors West Coast ("PCL") as the Prime
Contractor.

2. Canam Group Inc. doing business as Structal Heavy Steel Construction ("Canam")
and Freyssinet Canada Ltee ("Freyssinet") shared in the responsibility to erect the
post tensioning cable portion of the Project.

BCA Claims & Consulting Ltd. Phone: 604 689 7277

605 -1185 West Georgia Street Fax: 604 688 4989
Vancouver BC Canada V6E 4E6 E-mail: inlo@barnescraig.com
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August 13, 2013
Re: Geobrugg's Request for Coverage

J 3. Freyssinet International ET Compagnie ("FIC") acted as agent for Freyssinet for the
purchase of the cables from Geobrugg.

J 4. Geobrugg manufactured and supplied the cables, but had no involvement in their
erection at the Project site.

3 5. Sometime following the erection of the cables in May 2011, Geobrugg attended at
the Project site to carry out remedial measures to resolve, contain, control or
eliminate ongoing leakage of a solvent and lubricant mixture (the "Grease") from the
cables (the "Cable Leaks"). That work consisted of the cleaning of the cables, the
1 installation of an absorbent wrapping (in June and July 2011), and the installation of
gutters below the upper and lower suspension (August 2011) (collectively the
"Remedial Work").
] 6. Roof fabric panels (outer membrane and interior acoustic liner - the "Roof Panels")
were installed by USA Shade commencing on July 4, 2011, and installation was

3 completed around August 18, 2011.

7. Cable Leaks were detected as early as October 2010 when the cables first arrived at
the Project site. At that time, PavCo's consultant, Geiger expressed concerns that
1 the Cable Leaks would result in the staining of the Roof Panels; to which Geobrugg
responded that the Cable Leaks would stop once the cables were at tension. As set
out below, Cable Leaks continued and remained a constant concern amongst the
3 stakeholders well beyond the date that the cables were erected and tensioned.

(a) On June 17, 2011, USA Shade expressed further concern over the continuation
of Cable Leaks, noting the sustained condition despite three attempts at
cleaning the cables. USA Shade further expressed significant concerns about
deploying the Roof Panels in the circumstances, noting that the grease had
contaminated USA Shade's temporary rigging, climbing harness, ropes and
fabric landing zones and runways.

3 (b) On June 20, 2011, following a discussion among PCL, Canam, Freyssinet and
Geobrugg, PCL provided the following two options to the parties:

(i) Stop membrane installation and be responsible for immediate delays and
3 impact to the work and the resultant cost of the delays to the completion
of the Project; or

3 (ii) Proceed with the installation and be responsible for any damages caused
by the grease drops.

1 (c) Also on June 20, 2011, PCL confirms the sourcing of the absorbent wrap,
Geobrugg's involvement in its installation, and the fact that it was being applied
to mitigate the cable leakage.

(d) On June 27, 2011, PCL writes to Canam, Freyssinet and Geobrugg with further

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August 13,2013
Re: Geobrugg's Request for Coverage

observations of Cable Leaks.

(e) On July 4, 2011, PCL observed Cable Leaks at grids at R08-R11, while Roof
Panels were being erected below the cables at R09 and R10.

(f) On July 6, 2011, Geobrugg issued a submittal for "cable, sealant, lubricant
management' confirming that cable cleaning did not result in "no drop" state
and that it was decided to wrap the cables as a temporary measure to deal with
Cable Leaks.

(g) On July 7, 2011, USA Shade wrote to PCL noting the accumulation of grease in
Bay 10. Photographs taken showed grease dripping on to OA10 since the
Roof Panel had been deployed and cables had been wrapped. USA Shade
concluded that the Cable Leaks had not been contained.

(h) Only July 12, 2011, PCL observed grease on the retractable roof membrane
portion of the Roof Panels.

(i) On July 25, 2011, Geobrugg issue a report proposing the installation of gutters
under the upper cable because wrapping and cleaning of the cables were
ineffective.

(j) On August 11, 2011, Freyssinet confirms that Cable Leaks continued at lower
level.

(k) During the period September 6 - 8, 2011, Schleichbergermann and Partners

LP (Roof Engineer) observed Cable Leaks at the inner roof membrane.

8. On September 28, 2011, the Project was turned over to PCL. The first sporting
event was held on September 30, 2011 (the "Intended Use Date").

J 9 Because of damage to the Roof Panels caused by the Cable Leaks, PavCo is
demanding from PCL the replacement of some or all of the Roof Panels and/or some
form of warranty security. The value of PavCo's overall claim is in the vicinity of $26
million.

10 Legal proceedings were initiated by Freyssinet in connection to the Project in

October 2011 In the legal proceeding, Freyssinet seeks to recover approximately
$6 5 million in unpaid fees from Canam, PavCo and PCL. Canam subsequently
commenced a Counterclaim against Freyssinet, alleging that in addition to
approximately $26 million in additional costs owing to Canam by Freyssinet Canam
was presently and in the future exposed to costs in connection with he Cable Leaks.
Freyssinet then issued a Third Party Notice against Geobrugg, seeking recovery for
damages in connection with the Cable Leaks based on Geobrugg s design,
manufacture and supply of the cables.

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August 13,2013
Re: Geobrugg's Request for Coverage

The Policy

Under the Insuring Agreements to the Wrap-Up Policy, the Insurer agrees to pay on behalf
of the Insured all sums which the Insured shall become legally obliged to pay as damages
and with respect to such Insurance as is afforded by the Wrap-Up Policy:

(a) Defend any claim or suit against the Insured; and

(b) Pay all expenses incurred by the Insured, all legal costs ...

The Insured includes:

BC Pavilion Corporation (PavCo) et al. and PCL Constructors Westcoast as

prime contractors and all other subsidiaries, associated, controlled and
affiliated corporations for which the Named Insured has responsibility of
placing insurance for which insurance coverage is not otherwise specifically
provided.

Additional Named Insureds under the Wrap-Up Policy include:

All contractors and subcontractors of all tiers, architects, engineers and

consultants performing work or services on the project. Coverage will
specifically exclude suppliers, manufacturers and bailees for hire other than
for actual construction work at the Project site.

Under the definition section of the Wrap-Up Policy, (paragraph 8), Contractors and
Subcontractors includes:

all persons, firms or corporations who perform any part of the work under the
Project including suppliers.

Property Damage is described under the Insuring Agreements to the Wrap-Up Policy to
mean:

Because of physical damage to or destruction of or loss of use of tangible

property caused by an Occurrence during the policy period.

An Occurrence is defined under the Definition section of the Wrap-Up Policy (paragraph 3)
in part as follows:

(a) With respect to ... Property Damage, the term "occurrence" means an
accident, happening or event, including continuous or repeated
exposure to conditions, which results during the policy period in ...
Property Damage neither expected or intended from the standpoint of
the Insured.

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August 13, 2013
Re: Geobrugg's Request for Coverage

The Claim

In its Amended Counterclaim, Canam seeks additional costs against Freyssinet in the
amount of $26,154,364.00 including HST, including $115,277.00 to clean the grease from
the cables. Also, Canam seeks to recover from Freyssinet in the Counterclaim an
unspecified amount of costs it has paid and will continue to pay to PCL as a result of the
Cable Leaks.

In its Third Party Notice against Geobrugg, Freyssinet seeks to recover from Geobrugg,
Freyssinet's losses and damages connected with the investigation of the Cable Leaks,
costs to clean the Grease from the roof membrane, planning and testing remediation costs
associated with the Cable Leaks and roof membrane damage. Freyssinet is also seeking to
recover from Geobrugg indemnity and contribution for amounts it is judged to pay to Canam
in excess of Freyssinet's proportion of fault.

Freyssinet alleges in the Third Party Claim that Geobrugg was in breach of Contract, and
breached a duty of care owed to it based on Geobrugg's design, manufacture and supply of
the cables.

The Denial

Geobrugg is Not a Named Insured under the Wrap-Up Policy or the Excess Policy.

In order for Geobrugg to preserve its identity as an Additional Named Insured (and therefore
an insured) under the Policies, it would have had to perform actual construction work at the
Project site.

Geobrugg's performance of work at the Project site was remedial in nature. It clearly
manufactured and supplied the defective cables, and was called to the Project site to
correct a serious defect - the Cable Leaks. As noted, the Remedial Work performed by
Geobrugg in concert with Freyssinet, Canam and PCL, included the cleaning of the cables,
use of an absorbent wrap at the cables; both of which failed to stop the Cable Leaks,
leading to the installation of gutters beneath the cables. This installation of the latter did not
create something new as is contemplated with the use of the term construction within the
material clause of the Wrap-Up Policy. The purpose of the Remedial Work was to mend,
remedy and improve the functioning of the cables in an effort to prevent and/or mitigate
damage to the Roof Panels from the Cable Leaks. [In that regard we refer you to Wilson v.
INA Insurance Co of Canada, 1993 CarswellBC 159 (BCCA).]

The Policies are clear and unambiguous. Suppliers are included in the definition of
Contractors and Subcontractors, and as a result are Additional Named Insureds under the
Policies; but suppliers are then excluded as an Additional Named Insured unless they have
performed "actual construction work at the Project site".

Also Freyssinet's Third Party Claim against Geobrugg does not allege any breach in
relation to installation, but is limited to "design, manufacture and supply". The issue of
installation has been raised by Geobrugg in connection with the installation of gutters

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5} August 13, 2013
Re: Geobrugg's Request for Coverage

beneath the cables. The latter issue raised by Geobrugg is not determinative of Coverage.

Furthermore, in connection with the installation of the gutters by Geobrugg, there is no

alleged damage to the Roof Panels arising from the gutters installed by Geobrugg.

Geobrugg is not an Additional Named Insured under the Policies. As such, Geobrugg has
no Coverage under the Policies.

Property Damage was not Fortuitous

The Policies cover Property Damage caused by an Occurrence. An Occurrence includes

an accident resulting in Property Damage, neither expected nor intended. In other words,
the Policies only cover "fortuitous" losses.

In order to establish that the Property Damage was fortuitous, Geobrugg is required to show
that the Property Damage was "neither expected nor intended". Put another way, when an
event is unlooked for, unexpected or not intended by the Insured, it is fortuitous
[Progressive Homes (2010 SCC 33)].

A summary of the facts previously outlined in this letter do not support that the Cable Leaks
contaminating the Roof Panels (the "Event") were fortuitous:

1. Geobrugg was aware that Cable Leaks continued after the erection and tensioning
of the cables.

2. There was sufficient information by June 2011 to inform Geobrugg of the fact that
Cable Leaks would result in grease contaminating the Roof Panels.

3. Geobrugg participated in the decision to proceed with the work to install the Roof
Panels accepting responsibility in concert with PCL, Freyssinet and Canam for any
damage to the Roof Panels caused by the Cable Leaks.

4. Within days of the commencement of the installation of the Roof Panels, Geobrugg
was exposed to sufficient information confirming the fact that the Cable Leaks had
contaminated the Roof Panels with grease, and that this contamination continued
throughout and beyond the installation of the Roof Panels.

It is beyond a reasonable level of comprehension that Geobrugg could now claim in all the
known circumstances that the Event was "unlooked for, unexpected or not intended" by
Geobrugg.

The claim does not fall within the initial grant of coverage because Geobrugg is not an
insured under the Wrap-Up Policy, the loss was not fortuitous and as noted there has not
been physical damage of tangible property caused by an Occurrence. As such Geobrugg
has no coverage under the Wrap-Up Policy.

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