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ASSOCIATION OF PROFESSIONAL ENGINEERS OF ONTARIO

PROFESSIONAL PRACTICE EXAMINATION -APRIL 17, 2010

PART "A" - Professional Practice and Ethics

You will be given a total of 90 minutes to complete this examination.

Use the coµ:ect colour-coded Answer Book for each part, place in the correct envelope and seal
after completed.

White Answer Book for Part A white question paper.


Coloured Answer Book for Part B coloured question paper.

This is a "CLOSED BOOK" examination. No aids are permitted other than the excerpts from
the 1990 Ontario Regulation 941 covering sections 72 (Professional Misconduct) and 77 (Code
of Ethics) supplied at the examination. Dictionaries are not permitted.

The marking of questions will be based not only on academic content, but also on legibility and
the ability to express yourself clearly and correctly in the English language. If you have any
doubt about the meaning of a question, please state clearly how you have interpreted the
question.

All four questions constitute a complete paper for Part "A". Each of the four questions is worth
25 marks. ·

WHERE A QUESTION ASKS IF A CERTAIN ACTION BY AN ENGINEER WAS


ETHICAL OR NOT, A SIMPLE "YES" OR "NO" ANSWER IS NOT SUFFICIENT.
YOU ARE EXPECTED TO COMMENT ON AND DISCUSS THE ACTION OF THE
DIFFERENT INDIVIDUALS AND/OR ORGANIZATIONS INVOLVED IN EACH
SITUATION.

You should identify where applicable the appropriate clauses in Regulation 941. SIMPLE
REFERENCE TO THE APPROPRIATE CLAUSES WITHOUT A DISCUSSION OF
HOW THE CLAUSE APPLIES IN THE SITUATION DESCRIBED IS NOT
SUFFICIENT.

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Question 1

(5) (a) Is a civil engineer allowed to perform services that are normally within the
scope of mechanical engineering? Explain

(5) (b) What licence holders can hold a Certificate of Authorization?

(5) (c) What is the purpose of the engineer's seal and when should it be used?
What two elements are required to accompany the seal?

(5) (d) PEO issues Temporary licences. In addition to paying the necessary fee,
briefly state three other requirements to obtain such a licence.

(5) (e) PEO's Discipline Committee has the power to revoke or suspend any of the
licences issued by PEO if the licence holder commits professional
misconduct. Besides revocation and suspension, describe three (3) other
penalties or sanctions that the discipline committee may impose.
Question 2

ProTestCo is a products testing company. Typically, ProTestCo is hired by various


manufacturers to perform tests on their products in order to verify that the products are
manufactured according to published standards.

You are a professional engineer and have been employed for several years on a full­
time basis as an employee of ProTestCo. In your job, you are responsible for
supervising the application of tests on various products. During your years of
employment with ProTestCo you have acquired a great deal of expertise regarding the
design and manufacture of small household appliances and have earned an excellent
reputation. Given your reputation and expertise, manufacturers of such appliances are
often interested in hiring you on a private basis (i.e. outside of your employment with
ProTestCo) to provide input on their product designs. You are able to supplement your
income by occasionally undertaking such work for them. You perform this work on
weekends and during evenings.

One day, while at work at ProTestCo, you are assigned the job of supervising the tests
and issuing a report on a new product that has been submitted to ProTestCo. You
smile when you realize that the product was submitted by one of your own
manufacturing clients and that you provided design input on the product.

(10) (a) Comment on the appropriateness of how you have set up your working
arrangement.

(10) (b) How should you deal with the testing of the new product?

(5) (c) Is a P .Eng. licence sufficient to permit you to provide such design input to your
own manufacturing clients? Explain.

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Question 3

Local Environmental Solutions and Studies (LESS) was hired by Developer to


conduct a study on the contamination on a former industrial site that they had
purchased and wished to redevelop into residential properties. LESS held a
Certificate of Authorization and the responsible professional engineer, Member,
worked part time for LESS. Normally Member reviewed and sig.ned all reports
issued by LESS. LESS prepared an engineering report and submitted it to
Developer who then submitted it to the Ministry of the Environment as part of
Developer's application for redevelopment. The report prepared for Developer
was not reviewed nor signed by Member.

Member was a well qualified P.Eng. in this field with over 15 years of
experience and was well recognized by the industry. His principle employer
was aware of his moonlighting activities and had approved them. LESS was
also aware of the moonlighting activities and the limitations that this placed on
Member. LESS was a well known environmental firm with over 20 years
experience and employed 4 experienced technicians. LESS had no other
professional engineers on staff who could take the responsibility for the work.
The work of their technicians was normally directed and reviewed by Member.

The report submitted to Developer was found by the Ministry to contain some
serious errors and did not accurately identify the potential leaking of PCBs (a
known cancer causing material) into a nearby watercourse if the property was
redeveloped. Currently the levels of PCB are within the Ministry's allowable
limits. These potential leakages had been identified in a previous study that
had been submitted to the Ministry by a qualified engineering firm on behalf of
the previous owner.

After the report was submitted to Developer, Member reviewed the report and
found those errors. He informed LESS of his findings but did not notify
Developer or the Ministry of the Environment. LESS also did not notify
Developer or the Ministry of the errors. Neither Member nor LESS attempted
to remedy the report.
(10)
Wi!h respect to regulation 941 and the Professional Engineers Act
(15)
(a) Please discuss the conduct and responsibilities of LESS

(b) Please discuss the conduct and responsibilities of Member

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Qu�stion 4

Omicron is a 50 year-old engineer who, along with family, recently immigrated to


Canada and took up residence in Newtown, Ontario. Soon after arriving in Ontario,
Omicron obtained a Provisional Licence from PEO. Unfortunately, despite that
designation and Omicron's 25 years of experience as a structural engineer outside
Canada, Omicron has had difficulty finding employment. In order to help support
Omicron's family while continuing to look for a full-time job, Omicron decides to take
on engineering assignments on a solo, "freelance" basis, working from home. Omicron
begins advertising in the classified section of Newtown's local newspaper and orders
several hundred business cards. The advertisement includes the statement, "Don't
settle for poor quality and costly services of the big engineering firms in Newtown -
call Omicron to get the best for less!" On the business cards, beside Omicron's name,
the term "Prof. Eng." is used. The ads generate a great deal of interest and Omicron is
soon retained by several clients and begins to perform professional engineering
services on various small projects.

(6) (a) Comment on the suitability of the Provisional Licence under these
circumstances. If you are of the opinion that the Provisional Licence is not
suitable, what action might PEO take against Omicron?

(8) (b) What other document would Omicron need to obtain from PEO under these
circumstances? Does Omicron have the qualifications to obtain that document?
Comment on the possible consequences to Omicron of not having that
document.

(6) (c) Comment on Omicron's advertisement. Is it appropriate? If not, what action


might PEO take against Omicron as a result?

(5) (d) Comment on Omicron's business card. Is it appropriate? If not, what action
might PEO take against Omicron as a result?

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Professional Practice Examination
Study Guide
Part "A" -April 17, 2010

The objects of Part "A", are to examine a knowledge of PEO functions (question 1) and the application of the
Misconduct and Ethics Codes (questions 2, 3 and 4).

The Codes are contained in Regulation 941, sections 72. and 77. Although these 2 sections are supplied at
the exam, they should be carefully studied before the exam. This will facilitate recognition of comparable
situations within the questions, and an appropriate response to each situation.

Time can be a problem. To develop the skill of time management, try practice during study as follows -
1) write an answer without time pressure, but with full details, making use of all study materials
2) set aside all materials, except the question sheets and sections 72. and 77.
3) write the answer again, under time pressure of 20 minutes, giving priority to the important points.
4) using 1), review and look for ways to improve 3), while still giving a complete and concise
answer.

The refererices here are for study purposes and, except for 72. and 77., are not expected in an answer. This
study guide is extensive to illustrate the possible range of content in an answer.

1(a) Scope of practice - a P.Eng is allowed to perform services outside a first engineering degree, providing
specific study or experience have been undertaken, 77.1.iv., and the engineer is acting with competence,
77.1.v. However, if incompetence is shown, then it is professional misconduct, 72.(2)(h), and is open to a
charge, 72.(2)U). The judgment of competence rests with the individual P.Eng.

1(b) Certificate of Authorization (C of A) - support licence must be P.Eng or Temporary,


Reg. 941/47.1.

1(c) Engineer's seal - to identify the engineer responsible for preparing or checking documents. It is to be
used before issuing final documents, and to be accompanied by a signature and date, Reg. 941 I 53.

1(d) Temporary licence requirement; one of the following -


1) membership in another province or territory association with objects similar to those of
PEO, or
2) qualifications at least equal to those required for a P.Eng in Ontario, or
3) wide recognition and 10 years experience related to the work to be undertaken, Reg. 941/43., and
4) collaboration with an Ontario P.Eng, unless exempted, Reg. 941 / 44.

1(e) Discipline sanctions; besides (a) revocation or (b) suspension - any 3 from,
PE Act section 28.(4) -
(c) limit professional work (e)(iii) practice inspections (h) impose a fine up to $5,000
(d) impose terms (a course) (e)(iv) require reports (i) direct publication of orders
(e)(i) require supervision (f) impose counseling U) impose costs
(e)(ii) be working not alone (g) revoke a designation (k) suspend with a condition(s)

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ASSOCIATION OF PROFESSIONAL ENGINEERS OF ONT ARIO

PROFESSIONAL PRACTICE EXAMINATION-April 17, 2010

PART "B" - Engineering Law and Professional Liability

This examination comes in two parts (Part "A" and Part "B"). Both parts must be completed
in this sitting. You will be given a total of 18 0 minutes to complete the examination.

Use the correct colour-coded Answer Book for each part, place in the correct envelope and seal
.
after completed.

White Answer Book for Part A white question paper.


Coloured Answer Book for Part B coloured question paper.

This is a "CLOSED BOOK" examination. No aids are permitted other than the excerpts from
the 1990 Ontario Regulation 941 covering sections 72 (Professional Misconduct) and 77 (Code
of Ethics) supplied at the examination. Dictionaries are not permitted.

The marking of questions will be based not only on academic content, but also on legibility and
the ability to express yourself clearly and correctly in the English language. If you have any
doubt about the meaning of a question, please state clearly how you have interpreted the
question.

All four questions constitute a complete paper for Part "B". Each of the four questions is worth
25 marks.

2
ASSOCIATION OF PROFESSIONAL ENGINEERS OF ONTARIO

PROFESSIONAL PRACTICE EXAMINATION -April 17, 2010

PART "B" - Engineering Law and Professional Liability

You will be given a total of 90 minutes to complete this examination.

Use the correct colour-coded Answer Book for each part, place in the correct envelope and seal
after completed.

White Answer Book for Part A white question paper.

Coloured Answer Book for Part B coloured question paper.

This is a "CLOSED BOOK" examination. No aids are permitted other than the excerpts from
the 1990 Ontario Regulation 941 covering sections 72 (Professional Misconduct) and 77 (Code
of Ethics) supplied at the examination. Dictionaries are not permitted.

The marking of questions will be based not only on academic content, but also on legibility and
the ability to express yourself clearly and correctly in the English language. If you have any
doubt about the meaning of a question, please state clearly how you have interpreted the
question.

All four questions constitute a complete paper for Part "A". Each of the four questions is worth
25 marks.

3
I. Briefly define, explain or answer any five of the following:

(i) Contract A in tendering


(ii) Five examples of employment rights to which individuals are entitled under
Ontario's Human Rights Code (list only).
(iii) Dispute resolution board
(iv) The New York Convention
(v) Statutory holdback applicable to construction
(vi) Paro! evidence rule
(vii) Secret commission
(viii) The discoverability concept as it relates to limitation periods.

2. A joint venture consisting of both engineering and contracting firms entered into a
contract with an Ontario city to design and build an all-electronic toll highway
"expressway" featuring both underground tunnel portions and surface portions of the
highway. The contract also required the joint venture to design, install and implement an
electrcnic tolling system to accommodate specified numbers of vehicles, all as specified
in the. request for proposal for the design and construction of the all electronic
expressway, as published by the city.

The contract between the city and the joint venture provided that the all-electronic
highway expressway was to be fully operational by a specified. date, failing which the
joint venture contractor would be responsible to pay to the city liquidated damages (based
on lost total revenues in accordance with the project's feasibility study and financial plan)
of $300,000 for each day beyond the specified completion date until the expressway and
its all electronic tolling technology was finally installed and fully operational. The
contract also included a provision limiting the contractor's liability for liquidated
damages under the contract to the makimum amount of $30 million.

With the city's approval, the joint venture contractor then subcontracted, to a firm
specializing in tolling technology, the obligations to design, install and implement the
tolling technology system as required by the city's specifications. The subcontract
contained a provision obligating the tolling technology subcontractor to be responsible to
the joint venture contractor to provide a fully operational tolling system by the same
specified date and for the same $300,000 of daily

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liquidated damages (subject to the same maximum amount of $30 million in liquidated
damages as set out in the joint venture contract between the joint venture contractor and
the city).

Although the expressway was otherwise operational by the specified completion date, the
tolling technology subcontractor experienced difficulties in completing the installation
and implementation of the tolling technology in accordance with the requirements of the
subcontract. In fact, the tolling technology subcontractor was 120 days late in
successfully completing the design, installation and implementation of the tolling
technol. ogycsystem as required by the subcontract (and the Contract).

Explain and discuss what claim the joint venture contractor cou.ld make against the tolling
technology subcontractor in the circumstances. In answering, explain the approach taken by
Canadian courts with respect to contracts that limit liability and include a brief summary of the
development of relevant case precedents.

3. An information technology firm assigned to one of its junior employee engineers the task of
developing special software for application on major bridge designs. The employee engineer had
recently become a professiona.l engineer and was chosen for the task because of the engineer's
background in both the construction and the "software engineering" industries.

The firm's bridge software package was purchased and used by a structural engineering
design firm on a major bridge design project on which it had been engaged by contract with a
municipal government.

Unfortunately, the bridge collapsed in less than one year after completion of construction.
Motorists were killed and injured.

The resulting investigation into the cause of the collapse concluded that the design of the
bridge was defective and that the software implemented as part of the design did not address all
of the parameters involved in the scope cof this particular bridge design. The investigators
concluded that although the design software would suffice for certain types of structures it was
not appropriate in the circumstances of the particu.lar subsurface conditions and length of span
required for this particular application. The investigators' report also indicated that the design
software package was not sufficiently explicit in

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warning users of the software of the scope of the design parameters addressed by the software.
The investigators' report also stated that even an experienced user of the software might
reasonably assume that the software would be appropriate for application on this particular
project and that too little attention had been paid to ensuring that adequate warnings had been
provided to software users of the limitations on the application of the software.

What potential liabilities in tort law arise in this case? In your answer, explain what
principles of tort law are relevant and how each applies to the case. Indicate a likely outcome to
the matter.

4. An Ontario pulp and paper company ("Paperco") entered into a written equipment supply
contract with a manufacturer of heat exchange and turbine equipment ("Manuco"). According to
the agreement, Manuco was to design, manufacture and deliver high heat recovery steam
generator for Paperco's pulp and paper mill in Ontario for a purchase price of $7 .5 million.
Paperco would arrange to install the equipment in its mill as part of a cogeneration system for the
purpose of converting steam into electricity.

According to the agreement, Manuco was to begin manufacturing the equipment on February 1,
2009 and deliver the finished product to Paperco on or before March 30, 2010. The agreement
provided that Paperco. would pay the $7.5 million purchase price in monthly instalments over
the manufacturing period. The agreement contained the following provision:

"Each instalment of the purchase price shall become due and payable by Paperco
on the last day of the month for which the instalment is to be made. If Paperco fails to
pay any instalment within 10 days after such instalment becomes due, Manuco shall be
. entitled to stop performing its work under this contract or terminate this contract."

As the work progressed, Manuco invoiced Paperco for each monthly instalment. Although
Paperco paid the first instalment on time, it was more than 20 days late in paying each of the
second third fourth fifth and sixth instalments. Manuco never once complained about the late
payments, even when Paperco apologized for the delayed

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payments and commented in meetings with Manuco that Paperco's current cash flow difficulties
were the reason for the late payments. Manuco even commented at three separate meetings, in
response to Paperco's acknowledgment of its cash flow difficulties, that it understood that
Paperco had cash flow problems and that Manuco was prepared to wait for the late payments
provided the payments weren't more than 30 days late.

By the middle of September 2009, it became apparent to Manuco that due to serious cost
overruns resulting from its own design errors and lack of productivity, it would stand to lose a
substantial amount of money on the contract by the time the equipment would be completed.
Although the instalment for August had been invoiced and was due on August 31, 2009, Paperco
had not paid it by September 15, 2009. On September 15, 2009, Manuco terminated the
contract.

Was Manuco entitled to terminate the contract? Identify the contract law principles that each of
Paperco and Manuco may argue should apply and explain the basis of the principles and how
they should apply.

7
Professional Practice Examination
Study Guide
Part "B" - April 17, 2010

The object of Part "B" is to examine an elementary understanding of law, as this may apply in
an engineer's work experience.
Question 1. is for definitions, and needs only 5 answers from the 8 options.
Questions 2., 3. and 4. are case studies. Each case study must include names of the relevant
legal terms and principles, and how each term or principle applies to one or more elements of
the case. The value of case studies is not from 3 answers in total, but from the extent of content
within each answer.

Page references below are for the Marston text, 4th edition, and are given here for study
purposes. In the case of any perceived ambiguity, the text should be taken as authoritative.

1.(i) Contract A in tendering - is a contract formed when a bid is submitted. There are as many
Contract A's as there are bidders. Contract B is one signed agreement with one bidder, fil�'t
�'t
!.�!;

1.(ii) Employment rights, equal treatment - without discrimination regardless of (list only 5 of
the14 given here) race, ancestry, place of origin, colour, ethnic origin, citizenship, creed I
religion, sex, sexual orientation, age, marital status, family status, record of offences, or
i".'lM\f?F�§:q.ti_"'.:j
handicaP, 'li"il'322i
R R.......
.. .

1.(iii) Dispute resolution board - or dispute review board (DRB) - as disputes arise, a DRB tries
to resolve them, to avoid major claims and arbitration, or litigation (in court) at project
completion. A DRB is composed of neutral 3rd parties (usually 3 of) selected prior to project
start, by the owner and contractor. A DRB is less formal and more effective in the use of time,
than arbitration or legal procedures,

1.(iv) New York Convention - agreement under United Nations auspices, signed in 1958 by
over 135 countries including Canada, that arbitration decisions will be enforced by the country of
a signing nation. International contracts should be with those parties, who are from among the
llf@.:��"''.�.\u
·1

signing nations, 1?!9�'3Q'.l

1. (v) Statutory hold back - a % of contract price, held back by an owner until lien periods expire,
to cover any outstanding liens against a project, by sub-contractors or others.
Subjer.t begins on [i[���!

1.(vi) Paro! evidence rule - in general, verbal agreements are not part of a contract. However, if
it can be substantiated that an agreed-upon condition must be precedent for a contract to be
formed, then verbal evidence of that required condition may be admitted, ����:[�
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Study Guide - Part "B" - April 17, 2010

1.(vii) ·secret commission - a payment, promise, bribe or kickback, offered by a person who is
not a party to a contract, to influence the actions of a person who is a party to a contract. The
purpose is to secretly defraud the interests of the other party to a contract. A secret commission
is a violation of the Criminal Code of Canada, section 426. Marston text reference 11111'1
�:g�
1ll!QJ

1. (viii) Discoverability concept - applies to the 2 year limitation period. When damage or loss
_
as a cause for legal action is discovered, or ought reasonably to have been discovered, this is
the point in time when a 2 year limitation period begins, and within which a legal action must be
��jP,�74
filed, ref. ��Pl11·

2. Fundamental breach, claims enforceability - this is a case of "fundamental breach doctrine'',


·
a breach going to the root of a contract. Historically, a clause to limit liability is not enforceable.
However, if the intent of the parties as expressed or constructed in the clause, is clear and true,
and the liquidated damage provisions are supported in detail by a genuine pre-estimate of the
costs of a possible breach, then the legal principle of "true construction approach" is said to
have taken place. Canadian courts will usually judge that the clause to limit liability is
enforceable, therefore the law has changed in this area.

For the case of fundamental breach, the joint venture contractor (JVC) could make a claim
against the tolling technology sub-contractor (TTS) for $300,000 x 120 days= $36 million. The
$300,000 per day is based on lost total revenues in accordance with the project's feasibility
study and financial plan.

The provision limiting the contractor's liability to $30 million, would be enforceable, only if it were
clearly based on a genuine pre-estimate of the costs of a breach.

Relevant case precedents are Harbutt's Plasticene vs. Wayne Tank and Pump where the
clause was not enforceable, and Hunter Engineering vs. Syncrude where it was, �l�l11�§\tg
3. The relevant principles of tort law are -
1) a duty of care 2) a breach of that duty, and 3) resulting damage or loss. This is a tort case
because there was no contract between a municipal government (AMG) and the information
technology firm (ITF). A tort action is intended to compensate an aggrieved party(s) as far as it
is possible to do so with money.

9
AMG will claim that ITF, as verified by the resulting (expert) investigation -
1) did not give adequate care or warnings about the limitations and scope of software
parameters,
2) the bridge collapsed thus breaching a duty of care, traced back to the unsatisfactory
softwa·re,
3) motorists were killed and injured, so there was resulting damage and loss.
The potential liabilities that arise are to the structural engineering design firm (SEF) and to the
ITF. The liability funds would be used to compensate the injured, families of the deceased, and
rebuild the bridge.

A likely outcome is, the liabilities to SEF would be about 40 %, and to ITF would be about 60%.
SEF and ITF would be concurrent tortfeasors. The ITF would be vicariously liable for the
actions of its junior engineer. A similar case precedent is Unit Farm Concrete vs. Eckerlea
Acres , ���\ �f��
.E?.,,�9�..........

Although persons awarded P.Eng. have met certain minimum qualifications, a junior engineer's
work should have had at least a brief review by a seasoned engineering designer or manager at
SEF. Also, even the construction contractor may have noticed deficiencies compared to other
similar bridges.

4. Contract termination - Manuco was not entitled to terminate the contract. A gratuitous
promise was effectively made, that Manuco was prepared to wait for late payments. This
promise was not in writing and was without consideration, but Paperco was clearly depending
on the promise.

Manuco was going to lose money and was trying to get out of the contract. If Manuco insists on
a strict interpretation of the contract, Paperco could invoke an exceptional remedy, which is the
principle of equitable estoppel. This remedy would prevent termination of the contract. If
termination were to proceed, the result would be inequitable. A case precedent is Conwest
Exploration vs. Letain, ��[��

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