Date:19980501

Docket:97531ITG

BETWEEN:

NORTHWESTHYDRAULICCONSULTANTSLTD.,

Appellant,

and

HERMAJESTYTHEQUEEN,

Respondent.

ReasonsforJudgment

Bowman,J.T.C.C.

[1]Thisappealisfromanassessmentforthe1994taxationyear.Althoughthenoticeofappealandthereplyraisea
numberofissuescounselforthepartieshaveeffectivelyremovedeverythingfromthetableexceptonecentralquestion,
thatistosaywhethertheworkdoneonfiveengineeringprojectswhichhavebeenselectedbycounselasrepresentative
constitutesscientificresearchandexperimentaldevelopment("SRED")withinthemeaningofsection37oftheIncome
TaxActandPartXXIXoftheRegulations.

[2]Theappellant("NHC")carriesonaspecializedbranchofhydraulicengineering.Overtheperiodof11yearsfrom
1983 to 1994 it carried out 17 projects in which designs were tested by means of physical models. The question is
whetherthoseprojectswereSRED.Although1994istheonlyyearbeforethecourtthepartieshaveagreedthatifthe
questionofprincipleisdeterminedtheycanresolvebetweenthemselvesthemannerinwhichsuchdeterminationwill
affect not only the 1994 but other taxation years, including the appellant's entitlement to investment tax credits and
refundableinvestmenttaxcredits.

[3]ThefollowingisanaccuratedescriptionofthehistoryandbusinessofNHC.Itistakenfromthereportofthe
expertwitnessJoePloeg:

NorthwestHydraulicConsultants(NHC)wasincorporatedasaCanadiancompanybyasmallgroupofprofessorsofthe
UniversityofAlbertain1972.Ithas,sincethattime,grownintoaninternationalcompany,withastaffofsome70people,
ofwhichabout60%areprofessionals,andwithofficesinCanadainEdmonton,Alta,(HeadOffice)andNorthVancouver,
B.C.andintheU.S.inSeattle,Wash.andWSacramento,Cal.NHCisgenerallyknownasanengineeringconsultantfirm,
specializing in the development, management and protection of water resources. Their special fields of experience
includeHydraulicModelling,NumericalModelling,RiverEngineering,EnvironmentalStudies,HydrologyandStormWater
Management.

[4]The17projectsthatareinissuearehydraulicmodelstudiescarriedoutatNHC'sNorthVancouverofficefor
nonCanadian engineering consulting firms or the engineering departments of a municipality or public utility. Although
thesubjectmatteroftheprojectsdifferstheyhaveincommontheconstructionofaphysicalmodelgenerallytoaprecise
scalethatreplicatestheriverordamorotherconstructiontowhichthedesignrelates.

[5]Thefollowingfiveprojectswerechosenbycounselasrepresentative:
1.TheBelleville(LockandDam)HydroelectricProject.Thisprojectinvolvedthedevelopmentofahydroelectric
generatingstationadjacenttoanexistinglockanddam.

2. The Schuylkill River Sedimentation Study. This project involved the development of a design to reduce the
depositionofsedimentinfrontofanexistingrowingclubontheSchuylkillRiverinPhiladelphia.

3.EastRaptiIrrigationProject.Thisprojectinvolvedthedevelopmentofthehydraulicdesignofadiversiondam
andintakerequiredforirrigationwatersupply.

4.WaltersDamApronRepair.Thisprojectrequiredthedevelopmentofadesignthatwouldeliminateorreduce
thewaterdamagetotheconcreteapronofthedam.

5.WhiteRiverDiversionDam.ThisinvolvedthemodificationofthedesignofadiversiondamontheWhiteRiver.

[6]BeforeIexamineeachoftheseprojectsingreaterdetailIshallsetouttheguidelinesthatIproposetofollowin
determiningwhethertheprojectsfallwithintheconceptofSRED.

[7]UndertheIncomeTaxActSREDhasthemeaninggiventoitbyregulation.Section2900oftheIncomeTaxAct
Regulationsreads:

2900.(1) For the purposes of this Part and sections 37 and 37.1 of the Act, "scientific research and experimental
development" means systematic investigation or search carried out in a field of science or technology by means of
experimentoranalysis,thatistosay,

(a)basicresearch,namely,workundertakenfortheadvancementofscientificknowledgewithoutaspecificpractical
applicationinview,

(b)appliedresearch,namely,workundertakenfortheadvancementofscientificknowledgewithaspecificpractical
applicationinview,

(c)experimentaldevelopment,namely,workundertakenforthepurposesofachievingtechnologicaladvancementfor
the purposes of creating new, or improve existing, materials, devices, products or processes, including incremental
improvementsthereto,or

(d)workwithrespecttoengineering,design,operationsresearch,mathematicalanalysis,computerprogramming,
data collection, testing and psychological research where that work is commensurate with the needs, and directly in
support,oftheworkdescribedinparagraph(a),(b)or(c),

butdoesnotincludeworkwithrespectto

(e)marketresearchorsalespromotion,

(f)qualitycontrolorroutinetestingofmaterials,devices,productsorprocesses,

(g)researchinthesocialsciencesorthehumanities,

(h)prospecting,exploringordrillingfor,orproducing,minerals,petroleumornaturalgas,

(i)thecommercialproductionoraneworimprovedmaterial,deviceorproductorthecommercialuseofanewor
improvedprocess,
(j)stylechanges,or

(k)routinedatacollection.

[8]Theappellantreliesparticularlyonparagraph(c)ofthatdefinition.Paragraph(c)oftheFrenchversionreads:

c)ledveloppementexprimental,savoirlestravauxentreprisdansl'intrtduprogrstechnologiqueenvuedela
crationdenouveauxmatriaux,dispositifs,produitsouprocdsoudel'amlioration,mmelgre,deceuxquiexistent.

[9]Iquotethisparagraphsimplybecausethewords,"del'amlioration,mmelgre,deceuxquiexistent"seemto
clarifyanyambiguitythatmaybefoundinthewords"includingincrementalimprovementsthereto".

[10]Theadditionofthesewordsin1995applicabletotaxationyearsendingafterDecember2,1992appearstohave
beeninresponsetoaconcernthattheachievementorattemptedachievementofslightimprovementswasnotcovered.I
should not have thought it was necessary to say so. Most scientific research involves gradual, indeed infinitesimal,
progress.SpectacularbreakthroughsarerareandmakeupaverysmallpartoftheresultsofSREDinCanada.

[11]ThetaxincentivesgivenfordoingSREDareintendedtoencouragescientificresearchinCanada(ConsoltexInc.v.
TheQueen,97DTC724).Assuchthelegislationdealingwithsuchincentivesmustbegiven"suchfair,largeandliberal
constructionandinterpretationasbestensurestheattainmentofitsobjects"(InterpretationAct,section12).

[12]ThesecondpreliminaryobservationthatshouldbemadeistheuseoftheInformationCircular864R3which
setsoutcriteriatobeappliedindeterminingwhetheranactivityqualifiesasSRED.IngeneralIamreluctanttorelytoo
heavilyoninterpretationbulletinsandinformationcircularsindeterminingcontestedissuesundertheIncomeTaxAct.
Thereasonforthisisthatinanylitigioussituationitseemssomewhatunfairforanindependentarbitertoplacemuch
weight onthe rules of the game devisedby one of theplayers. I recognize thatfrequently interpretationbulletins and
information circulars set out administrative interpretations and practices that are beneficial to the taxpayer and I am
reluctanttodoanythingthatwouldcastdoubtonthoseinterpretationsorpractices.

[13]ThereisafurtherconsiderationthatrelatesspecificallytoIC864R3.Thatcircularhasbeenrevisedanumberof
times.Dr.J.R.RobertswasaSeniorScienceAdvisorintheDepartmentofNationalRevenuewithadoctorateinorganic
chemistry. In his extremely helpful and informative testimony he described in some detail the evolution of the
government'sguidelineswithrespecttoSREDwhichculminatedinIC864R3.Itwastheresultofextensiveconsultations
betweengovernmentandthescientificcommunitybothinindustryandinuniversities.Itrepresentsabroadconsensusof
personsinthepublicandprivatesectorwhoarelikelytobeaffectedbyortohaveaninterestintheinterpretationofthe
SREDprovisionsoftheIncomeTaxAct.Theprocessdemonstratesthesensitivityofthegovernmenttotheconcernsofthe
scientificandbusinesscommunitiesinthisarea.Numeroussubmissionswerereceivedfromorganizations.

[14]Threebasiccriteriawereconsideredbythepanelswhowereinvolvedintheprocess:scientificortechnological
uncertainty,scientificortechnologicalcontentandscientificortechnologicaladvancement.

[15] In light of the extensive consultation and the impressive credentials of the persons who participated in the
process,thedocumentthatemerged,IC864R3isagenerallyusefulandreliableguide.

[16]AlthoughIdonotpresumetohavethetechnologicalexpertiseofthepersonswhoassistedinthepreparationof
thecircular,orthewitnesseswhoappearedbeforeme,includingthehighlyqualifiedexpertswhoappearedonbehalfof
theappellantandtherespondent,Ishouldliketosetoutbrieflymyownunderstandingoftheapproachtobetaken:

1.Isthereatechnicalriskoruncertainty?
(a) Implicit in the term "technical risk or uncertainty" in this context is the requirement that it be a type of
uncertaintythatcannotberemovedbyroutineengineeringorstandardprocedures.Iamnottalkingaboutthefactthat
wheneveraproblemisidentifiedtheremaybesomedoubtconcerningthewayinwhichitwillbesolved.Iftheresolution
of the problem is reasonably predictable using standard procedure or routine engineering there is no technological
uncertaintyasusedinthiscontext.

(b)Whatis"routineengineering"?Itisthisquestion,(aswellasthatrelatingtotechnologicaladvancement)that
appearstohavedividedtheexpertsmorethananyother.Brieflyitdescribestechniques,proceduresanddatathatare
generallyaccessibletocompetentprofessionalsinthefield.

2.DidthepersonclaimingtobedoingSREDformulatehypothesesspecificallyaimedatreducingoreliminatingthat
technologicaluncertainty?Thisinvolvesafivestageprocess:

(a)theobservationofthesubjectmatteroftheproblem;

(b)theformulationofaclearobjective;

(c)theidentificationandarticulationofthetechnologicaluncertainty;

(d) the formulation of an hypothesis or hypotheses designed to reduce or eliminate the

uncertainty;

(e)themethodicalandsystematictestingofthehypotheses.

Itisimportanttorecognizethatalthoughatechnologicaluncertaintymustbeidentifiedattheoutsetanintegral
part of SRED is the identification of new technological uncertainties as the research progresses and the use of the
scientificmethod,includingintuition,creativityandsometimesgeniusinuncovering,recognizingandresolvingthenew
uncertainties.

3.Didtheproceduresadoptedaccordwithestablishedandobjectiveprinciplesofscientificmethod,characterized
bytrainedandsystematicobservation,measurementandexperiment,andtheformulation,testingandmodificationof
hypotheses?

(a) It is important to recognize that although the above methodology describes the essential aspects of SRED,
intuitivecreativityandevengeniusmayplayacrucialroleintheprocessforthepurposesofthedefinitionofSRED.These
elementsmusthoweveroperatewithinthetotaldisciplineofthescientificmethod.

(b)Whatmayappearroutineandobviousaftertheeventmaynothavebeenbeforetheworkwasundertaken.
What distinguishes routine activity from the methods required by the definition of SRED in section 2900 of the
Regulationsisnotsolelytheadherencetosystematicroutines,buttheadoptionoftheentirescientificmethoddescribed
above, with a view to removing a technological uncertainty through the formulation and testing of innovative and
untestedhypotheses.

4.Didtheprocessresultinatechnologicaladvance,thatistosayanadvancementinthegeneralunderstanding?

(a)BygeneralImeansomethingthatisknownto,or,atallevents,availabletopersonsknowledgeableinthefield.I
amnotreferringtoapieceofknowledgethatmaybeknowntosomeonesomewhere.Thescientificcommunityislarge,
andpublishesinmanylanguages.AtechnologicaladvanceinCanadadoesnotceasetobeonemerelybecausethereisa
theoretical possibility that a researcher in, say, China, may have made the same advance but his or her work is not
generallyknown.
(b)Therejectionaftertestingofanhypothesisisnonethelessanadvanceinthatiteliminatesonehithertountested
hypothesis.Muchscientificresearchinvolvesdoingjustthat.Thefactthattheinitialobjectiveisnotachievedinvalidates
neitherthehypothesisformednorthemethodsused.Onthecontraryitispossiblethattheveryfailurereinforcesthe
measureofthetechnologicaluncertainty.

5.AlthoughtheIncomeTaxActandtheRegulationsdonotsaysoexplicitly,itseemsselfevidentthatadetailed
recordofthehypotheses,testsandresultsbekept,andthatitbekeptastheworkprogresses.

TheBelleville(Lock&Dam)HydroelectricProject

[17]ThisprojectwasownedandoperatedbytheU.S.CorpsofEngineers.ItislocatedontheOhioRiveratBelleville,
West Virginia. The river was primarily used for navigation. A private developer proposed the construction of a
hydroelectricpowerhouseontheoppositebankoftheriver.Theappellantwasretainedtoevaluatetheinitialdesignand,
if necessary, to develop design modifications to improve the performance. The objective was to develop a design that
wouldpermitthepowerhousetobeconstructedandoperateinamannerthatwouldnotinterferewithnavigation.The
technologicalproblemandthehypothesesformulatedtosolvetheproblemaresetoutinthedraftreportpreparedby
theappellant(ExhibitA1).Theobjectivesofthestudywereasfollows(pages45):

1.3StudyObjectives

Three test series were performed using the 1:120 scale navigation model. The first series of tests addressed ACOE
concerns regarding the effect of the proposed powerhouse addition both during and after construction on existing
navigation, sedimentation, stage, erosion, and surge. The second series of tests used upstream and downstream flow
patternstodevelopahydraulicallyefficientandcosteffectivedesignofthecivilworks.Thethirdseriesoftestscollected
additionalvelocitydatatohelplayoutanappropriaterecreationalfacilitydownstreamofthepowerhouse.

Thetestprogramforthe1:30scalesectionmodeldocumentedthehydraulicperformanceoftheapproachchanneltothe
proposed powerhouse. Details of the 1:30 scale model test program can be found in the separate "Powerhouse
Performance"report.

SpecificACOEobjectivesincludedthefollowing:

. Establish baseline performance of the existing configuration including navigation conditions, water surface
profiles,andsedimenttransportcharacteristicsinthevicinityofthelowerlockapproach.Also,documentvelocitiesover
the entire modelled reach of the river, in the lock approaches, near the affected structures and adjacent bank lines
(navigationmodel).

.Ensurethattheproposedhydropowerproject,understeadystateoperation,doesnothaveanadverseimpact
on either the navigation conditions or the bank line velocities. Develop modifications required to eliminate any
unsatisfactoryconditionsduringandafterconstruction(navigationmodel).

. Assess the backwater effects of the project modifications, both during and after construction, and develop
designstoeliminateanyunsatisfactoryconditions(navigationmodel).

. Investigate the magnitude of upstream and downstream surges (water levels and velocities) resulting from
powerhousestartupandshutdown(navigationmodel).

.Determinetheeffectofanysiteexcavationorsoildisposalontheupstreamfloodstagesandflowdistribution,
andinvestigatedesignsrequiredtoeliminateunsatisfactoryconditions(navigationmodel).
.Provideaqualitativeassessmentofthemovementofsedimentintothelowerlockapproachfortheproposed
powerhouse conditions and compare with the baseline conditions. Develop design modifications to eliminate adverse
conditionsasrequired(navigationmodel).

.Ensurethattheflowoverandaroundthepowerhousedoesnotinduceerosionorthreatentheintegrityofthe
existingdam(navigationandsectionmodels).

. Assess the environmental aspects of the project. In particular, the velocities and flow patterns produced by
powerhouseflowsinthedownstreamriverchannel(navigationandsectionmodels).

InadditiontotheconcernsoftheACOE,themodelstudywasalsousedto:

. Aidin the layoutof the recreational facilities downstream of the proposed powerhouse with input from the
appropriateresourceagencies(navigationmodel).

. Evaluate the hydraulic performance of alternative approach channel configurations designed to minimize
unsymmetricalflowconditionsthatwouldadverselyaffectplantefficiency(navigationandsectionmodels).

.Evaluatethehydraulicperformanceofalternativetailracechannelgeometrieswithemphasisonminimizinghead
lossesanddrafttubeinstabilities(navigationandsectionmodels).

[18]Doesthepassagequotedabovedemonstrateadegreeoftechnologicaluncertaintythatcannotberesolvedby
routineengineering?

[19] Theoverall purpose was to evaluate the initialdesignand develop modifications that would ensure that the
hydroelectricprojectwouldnothaveanadverseimpactonnavigationontheriver,onupstreamwaterlevelsandwould
not increase the flow of sediment downstream from the dam. An additional problem was the distribution of flow
velocitiesenteringthepowerhouse.

[20] I am satisfied that there was a high degree of technological risk. I am not basing this conclusion on the
somewhatselfevidentobservationthatthefactthattheU.S.CorpsofEngineersretainedtheappellanttodothephysical
studyinitselfisillustrativeofahighdegreeoftechnologicalrisk.Themakingofaphysicalmodelforprojectsofthistype
maybeastandardrequirementoftheU.S.CorpsofEngineers.However,evenifitisstandardprocedureforthem,the
veryexistenceofthepolicyprobablydemonstratesthatameasureoftechnologicalriskisinherentinallprojectsofthis
type.Thismaybeimplicitlyrecognizedinparagraph7.5ofIC864R3whereitissaid:

7.5Inregulatedindustrieswherespecificationsforproductperformance,registration,certification,and/orsafety
areenforcedoraregenerallyaccepted,studiesrequiredtomeettheserequirementsorstandardsareeligibleactivities.

[21] I prefer however to base my conclusion on the number of uncertainties inherent in the change to the flow
pattern that the construction of the hydroelectric project would entail and the velocity of the flow to the power plant
resultingfromitsconstructiondeepintothebankoppositethelocks.

[22]BasedontheevidenceofMr.Hughes,theengineerinchargeoftheprojectoftheappellantIdonotthinkthat
conventionalengineeringwouldbeadequatetodealwiththevariablesandtheuncertaintiesthatwereinherentinthe
majordisruptionanddiversionoftheflowoftheriverresultingfromtheconstruction.Twomodelswererequired.One
problem that emerged was the flow pattern that would have resulted from the initial design would have adversely
affectedthenavigationdownstream.Asaresultthetailracechannelwasrealignedtoobviatetheproblemwiththeinitial
designandtheapproachchannelwasrealigned.Itwouldbeeasytosay,aftertheevent,thatthesesolutionsareobvious
and routine. They are not. They required a number of methodical and systematic experiments and progressive
modificationstomeetproblemsthatcouldnothavebeenpredicted.
[23]Inmyview,thisprojectmeetsallofthecriteriasetoutinRegulation2900,IC864R3andthecriteriasetout
above.Theresultwasatechnologicaladvancewithrespecttothisparticularproblemofhydraulicengineering,involving,
asitdid,thejuxtapositionofalockanddamonanavigableriverandahydroelectricpowerplant.Itis,Ithink,unduly
simplistictosaythattheappellantwasmerelyapplyingtechnologythatithadlearnedfromworkingonsimilarprojects.
Eachriverisdifferentandeachprojectofthissortaddstothebodyofknowledge.

[24]IwillsimplyconcludemydiscussionofthisprojectbyquotingfromtheevidenceofMr.Hughes:

Q. Was there any new knowledge that the staff of NHC gained as a result of this working on this particular
project?

A.Withthis,andprettymucheveryproject,welearnsomething.Someoftheearlierlockanddamprojects,for
instance, we had used a different type of feature to help spread this flow. I this case we developed a feature in this
direction which we hadn't used in previous ones. In our early part of our development testing we tried to take that
knowledgefromourpreviousprojectsandapplyithere.Itdidn'tproveasbeneficialasitdidinthepreviouscases,sowe
hadtodevelopsomeothermodifications.Inthiscase,forexample,thisfeatureherewasabletomeettheobjectives.

TheSchuylkillRiverSedimentationStudy

[25]ThisstudywasconductedbytheappellantfortheCityofPhiladelphia.TheproblemwasthattheSchuylkillRiver,
whichflowedinfrontofBoathouseRow,arowingclub,wasdepositingsedimentinfrontoftheclub.Astheriverflowed
aroundabendimmediatelyupstreamfromtheclubthesurfacewaterflowedfairlyuniformly,followingthecontoursof
therighthandbankoftheriverandoveradamdownstreamontheright.Thewaternearthebedoftheriverwentintoa
helicalflowandveeredofftothelefttowardtherowingclub,whichwassituateonthebankofariverinanindentation
orrecessintheleftbankthatcouldbedescribedasabayorperhapsmoreaccuratelyasacove.Thewaterinthecoveis
virtually still. The below surface water in the current ofthe river thatgoes into ahelical flow after comingaround the
bendmovesmuchmoreslowlywiththeresultthatsuspendedsedimentthatwascarriedalongsolongastheriverwas
movingrapidly,dropsdowntothebedfromtheslowerhelicalflowofthebelowsurfacewaterandisdepositedinfront
oftheclub,makingaccessdifficultorimpossible.

[26]Theparticularcharacteristicoftheflowofcurrentaroundabendinariver,theformationofahelixandthe
differingvelocitiesofthesurfaceandbelowsurfacewaterwerewellknownintheprofession.

[27]Theproblemwastodeviseasolutionthatwouldeliminatethedepositofsedimentinfrontoftheclub.Itwas
decidedthatthebestwayofdoingsowastheconstructionofaphysicalmodel.

[28] One obvious solution was dredging. This was considered expensive and impermanent. Others were the
constructionofrivertrainingwallsspursorrockfillsofftheshoretointercepttheflowpatternortheconstructionofa
riverdividingwallparalleltothebanktocreatescourandpreventsedimentfromreachingthearea.

[29] The river training walls were rejected because of the degree of the bend and velocity of the current. Such
structureswouldhavehadtobeexcessivelylarge.

[30]Thecreationofadivisionintheriverbymeansofaparallelwallwasthemostpromisingidea.Itfellintothree
alternatives:

(a)Theflushingconceptwhichinvolvedaparalleldividingwallwhichwouldincreasethevelocity.

(b)Thedeadpondconcept,whichinvolvedthebuildingofalongwallthatwouldineffectisolatetheareainfrontof
theclub.Thiswasrejectedforbothsafetyandaestheticreasons.Alargewallinthemiddleofariverinfrontofarowing
clubisunattractive.
(c)Theextendedpeninsula.Essentiallythisinvolvedtheextensionoftheexistingpeninsulawhichcombinedthe
featuresandresultsoftheothertwoideastheisolationoftheareaandthecounteractingofthehelicaleffectbya
redirectionofthemainflowandtheincreaseofthevelocity.

[31]IdonotthinkthisprojectmeetsthecriteriaofSRED.Therewasnodoubtameasureofuncertaintyastothe
best method of dealing with the problem and there was also methodical experimentation. However the solutions that
weretestedandtheonethatwasultimatelyadoptedwerewellwithinacceptedengineeringtechniques.Idonotmeanto
belittle the engineering skill that was utilized in finding an answer to the problem but there was nothing particularly
innovative.Itcouldnothavefailedtobeobviousthatsoonerorlater,usingestablishedtechniques,asolutionwouldbe
found.

TheEastRaptiIrrigationProject

[32]TheEastRaptiRiverisinNepal.Theobjectivewastodevelopthehydraulicdesignofadiversiondamandintake
requiredforirrigationwatersupply.

[33]Thisinmyviewwasanextremelychallengingproject.Theriveris1,800metreswideandcarrieslargeamounts
ofsediment.Thechannelis"braided",thatistosayitconsistsofanumberofchannels.Thebankoftheriverinsubjectto
erosionandishighlyunstable.Moreover,theslopeissteepgivingrisetounusuallyhighvelocity.

[34]Theproblemsweretomaintainalowflowchannelneartheintakeduringthedryseason,toexcludesediment
fromenteringtheintakeandreducedownstreamscouring(erosionofmaterialsduetohighvelocity).

[35]Intheresultthreemodelswererequired:

(a)Amodeloftheriver;thisrequiredadistortionofthescale;

(b)anintakemodel;and

(c)asettlingbasinmodel.

[36]Forthispurposeitwasnecessarytodevelopgeometryforupstreamtrainingdikesandspurs,andanalignment
for the intakestructure. The capacity of the sluicegate hadtobe increased and a flow divide wallhad to be added.A
downstreamscourprotectionschemehadtobedevisedandasettlingbasinhadtobemodifiedtoimproveflushing.

[37]Ofalloftheprojectsdescribeditappearstomethatthiswastheonethatattheoutsethadthegreatestdegree
of technological uncertainty. Each characteristic taken alone and in isolation would unquestionably have presented
difficulties.Cumulativelytheymagnifiedeachother.

[38]Itseemsclearthattheproblemsencounteredcouldnothavebeenresolvedbystandardorroutineengineering.
The final report demonstrates the numerous tests that were performed. In the result the project did not achieve the
objectivessought.Isetouttheconclusionsenumeratedinthefinalreport.Itwillbeobviousthatthetestingwasamixed
success.Manyofthehypothesestestedwererejected.Whatthisillustratesisthepointmadeearlierthattechnological
advancementdoesnotnecessarilyimplysuccess:

10.CONCLUSIONS

TheconclusionsresultingfromtheseriesoftestsconductedontheEastRaptimodelsconsistofthefollowing:

Baselinetests
*Thebaselinetestsconductedbeforeinstallationoftheweirshowedgoodsimulationofabraidedriver.

*Thehighflowrateserodedtheincisednarrowchannelsystemgeneratedbylowflows.

UpstreamTrainingWorks

* Tests with the weir indicated that upstream leftside training works are needed to protect the guidebank
immediatelyupstreamfromtheweirfromerosiveattack,preventerosionoftheleftbank(ChitwanPark),andtodirect
approachflowtotheintake.

* An upstream training scheme consisting of three open dyke elements plus Tspur dykes both upstream and
downstreamfromtheopendykesectionswasdeveloped.Thetrainingschemeprovidedtherequiredprotection,helped
directlowflowstotheintake,andallowedtheareabehindthedyketothepreservedaswetlands.Thissystemperformed
well,butthethreespurconfigurationwasalsoadequate.Thefinallayoutwillbethedecisionoftheprojectdesigners.A
minimumoftwospursisrecommended,iflimitedfundingdoesnotpermitconstructionofthetestedschemes.

LowFlowChannel

*Barsbuiltupinthe400mwideapproachchannelduringfloodsthatisolatedtheintakeduringlowflows.A
series of tests was conducted using submerged inner guide banks to create a low flow channel. A 1 m high guidebank
forming a channel 1/4 the width of the weir achieved acceptable results. Because the inner guide bank scheme
concentratesflowandcauseshigherupstreamwaterlevels,aschemeusingfloodwaygateswasadoptedforfurtherstudy.

*Amodifieddesignusingtwo20mwidegatedfloodwaysandone20mundersluicewaseffectiveinproducinga
lowflowchanneltotheintake.Thiswasaccomplishedprimarilywithopenfloodwaygatesandaclosedundersluice.

*Alargerradiusrightsideguidewallimproveflowconditionswhenflowisguidedbytherightguidewall.

DownstreamDegradation

*Extendedtestswiththeweirindicatedthatdegradationdownstreamfromtheweirwilloccurduringtheearly
years of the project when bedload transported by the Rapti river is trapped behind the weir, and sedimentfree flow
passesdownstream.Thisdegradationresultedinwatersurfaceelevationsloweredbyapproximately1.5m.

UpstreamAggradationandWaterLevels

* Aggradation occurring upstream from the weir was exaggerated in the model with the result that water
elevationsmeasuredfarupstreamfromtheweirareconservativelyhigh.Waterelevationsmeasuredupstreamnearthe
weir agree closely with levels computed with the assumption that their weir functions hydraulically as a broadcrested
weir.Thedifferencebetweencomputedandmeasuredelevations1,800mupstreamfromtheweirfor2,250m3/swas1.7
m.

VelocitiesnearDykes

*VelocitiesmeasurednearthedownstreamendofthedownstreamTspurdykewereashighas6.9m/sfor6,000
m3/s,andnearthedownstreamendoftheexistingdykedownstreamfromtheweirashighas7.7m/s.Protectionwillbe
requiredagainstthesehighvelocities.

PerformanceofCanalIntake
*Testswithcanalintakesorientedat140and90degreesindicatedmoreuniformflowdistributionwiththe90
degreeintake,althoughbothintakeshadmoreflowenterthroughtheleftsideoftheintake.The90degreeintakewas
adoptedforfinaldesign.

*Althoughbothorientationswerestudiedforbedloaddeposition,onlytheresultsofthe90degreeintakewillbe
discussedherein.Flowconditionswiththefloodwayandundersluicegatesopen0.5mresultedinconsiderablebedload
enteringthecanalheadworksarea.Flowswiththefloodwaygatesopen1mandtheundersluiceclosedalsoresultedin
considerabledepositionintheheadworksarea.

*Theadditionofa40mlongdividewallthatextendedabovethewatersurfaceeffectivelypreventedbedload
from entering the canal headworks area when tested for the 1 m floodway gate opening with the undersluice closed.
Whencanalflowisalsoeliminated,preventionofbedloadenteringtheheadworksareaisfurtherenhanced.

*Flushingtestsconductedwithawideopenundersluiceindicatedthatflushingwiththedividewallismuchmore
effectivethanwithoutthewall.

LogPassage

*Logpassagetestswereconductedwiththepremisethatlogaccumulationinthepocketareaupstreamfromthe
undersluiceshouldbeminimized.Thiswasaccomplishedtoalargeextentbyclosingtheundersluicebutoperatingthe
floodway. This operation resulted in log accumulation upstream from the floodway, but minimal accumulation in the
pocket.

*Logsof20msizewerecapableofbeingflushedbycompletelyopeningthegates(floodwayorundersluice).
Largerlogsof30msizefrequentlybecamejammed.

*Severallogdiversionwallsweretestedtoexplorethepotentialforimprovingtheeffectivenessofdivertinglogs
intothefloodway.Thebestschemeinvolvedasolidskimmerwallthatallowedflowtopassunderneaththewallandthe
logswereredirectedawayfromthepocketarea.

*Theeliminationofallcanalflowcombinedwithnoundersluiceflowresultedinmorefavourableconditionsfor
divertinglogsfromthepocket.

Crest

* The crest shape for the weir produces smooth flow conditions. Tests with a simplified crest for the gated
sections showed flow separation for the higher flows with some accompanying instability. This was eliminated for the
undersluicewithachangetoacurvedshape.

StillingBasinsDownstreamofWeir

*Fourstillingbasindesignsweretesteddownstreamoftheweir:Types3and4atbasinelevationsof224.7and
226.7m.Thetwohigherbasinsproduceddownstreamwaterlevelsthatweremuchhigherthanthetailwaterlevel.This
causedscouringconditionsdownstreamashighvelocitiesweregeneratedbythedropinwaterlevel.TheType3basinat
224.7melevationwasadoptedforfinaldesign.

*Theadoptedbasinwastestedwithandwithoutstoneaccumulationinthestillingbasin.Thepresenceofstones
causedsomeadditionalmoundingofthewaterabovethefloorblocksforthehigherflowsandanexaggeratedvertical
eddythattendedtorotatestonesbacktothefaceofthespillway,wheretheymayaccelerateerosionoftheconcrete.
Manyofthesestones,however,willwashoutatthehigherflows.
StillingBasinsandLaunchingApronsDownstreamofGates

*Stillingbasinsandlaunchingapronsweretesteddownstreamfromthegatedsections.Thelaunchingaprons
weretestedinbothlevelandslopingpositions.Velocitiesandwaterlevelsweremeasured.Theslopinglaunchingapron
reduces or eliminates the drop in water from the apron to the river, particularly for degraded conditions. A launching
aprondesignisproposedforfinaldesign.

SettlingBasin

*Approachflowpatternstothesettlingbasinappearsatisfactoryastheupstreamtransitionadequatelyspreads
the flow so that all basin segments are used effectively. There is slower moving flow along the diverging sidewall that
wouldbeimprovedbyroundingtheupstreamcornerofthetransition.Depositioninthebasinwasfairlywelldistributed
amongthebasinsegments.

* Flushing with the fourchannel scheme was unsuccessful because insufficient downstream channel capacity
resultedinsubcriticalflowthroughmuchofthedownstreamsectionofthebasin.Thisschemewouldfunctionadequately
ifmoredownstreamcapacitywereprovided.

*Flushingwiththesinglechannelschemewiththeslopethroughtheflushingportscontinuingatthe1:100basin
slopewasnotsatisfactoryasahydraulicjumpformedinthebasin.Elevationdropsof20,30and45cmthroughtheports
werethentested.Supercriticalflowthroughtheports,andthuseffectiveflushing,wasmaintainedforflowratesfrom2
to6m3/sforthethreetesteddrops.

SedimentEjector

*Testswiththesedimentejectorindicatedeffectiveremovalofbedsedimentsfor6and8m3/s.Thelocationand
sizeoftheejectormayrequirefurtherconsideration,astheydonotconformtopublishedrecommendations.Itmaybe
more efficient if it is located with a long straight upstream reach to allow for uniform flow to be attained. The
recommendationssuggestthatejectedflowbelimitedtoapproximately25percentofthecanalflowrate.

[39]TheadvancethatwasmadewassummarizedbyDr.Babb:

Q. As a result of this project, were there any innovations or any improvements that you became aware of in
hydraulicengineering?

A. Well, this conceptof a divide wall is not new, but this is an entirely different application in that it's a highly
braidedriverandsoIthinkthedevelopmentthere,theshapeoftheintakeworks,thealignmentandthelengthandthe
heightofthewallincombinationwiththegatesthatwereused.Alsothedevelopmentofmethodsformaintainingthis
lowflowchannelfortheintakeinthishighlysedimentladenriver,that'sanadvance.

Q.Youtalkedaboutthepiersorthose,Ithinkofthemasvanes,fortheintakes.

A.Yes.

Q.Iguessthat'sthisphotographhere,YourHonour.

Howweretheypositioned?Isthereanyhydrotechnicaltheoryonthepositioningofthesevanes?

A.Well,thereis.Andjustbecauseflowdoesn'tliketoturnacorner,andsoifyoudon'thaveanyvanesinthereto
help it, then probably half of your maybe only a half of your intake area will be affected. In other words, the flow
movingdownstreamonlyoccupiesmaybehalfofthatopening.Whereasifyoubreakitupintosmallerchannelsandthe
noseofthatvaneisupwheretheincomingflowcaninterceptit,thenineffectwe'vegotalotoflittlechannels,whatmay
bethisseparatedzonewithineachchannel.Butoverallit'samuchmoreeffectivewayanddistributedoverthewidthof
theintake.

Q.Couldthesedesignshavebeenimplementedbyresortingmerelytotextbooks?

A.No,youwouldn'tfindanyofthatinatextbook.Buttherearedesignguidesavailableandcertainlythereare
suggestions there and these were used in the initial design. But not enough is available there to, I think, develop an
effectivedesignofthistype.

Q.Youmention"designguides".Whatisadesignguide?

A.Well,it'ssomethinglikeabookoramanualthathasmaybesomenumberofcasestudiesthatcouldbeused,
some basic theory in it and maybe some design examples. And if it fits your particular application and it's been either
modeltestedbeforeorbuiltinthefieldwhereyoucanseehowitoperates,andifyoubuildexactlythesamestructure,
there's no need for a model. But if you're doing things differently or its in a different environment, then the model is
necessary.

Q.Thesedimentationbasin,youindicatedthatdesignwasprovidedtoyoubytheJapanesefirm?

A.Yeah,theyhadastandardsedimentationbasindesign,soweadoptedthat.

Q.Didyouknowbeforeitwasputinthemodelwhetherornotitwouldwork?

A.No,Ididn't.

Q.Whatdidyouanticipate?

A.Ianticipatedwhenthegateswereopenthatthewaterlevelwoulddropandallthesedimentwouldgobackto
theriver.

Q.Andinfactthatdidn'thappen,didit?

A.No.

Q.Itfailedinthisproject.Isthatright?

A.Well,itwasn'tbuiltthatway,itwasjustbuiltinthemodelanditdidn'tfunction.

Q.That'swhatImean.

A.Yes,right.

Q.Themodelofthedesignfailedforitspurpose?

A.Right.

[40]Inmyview,theEastRaptiRiverIrrigationProjectmeetsallofthecriteriaofSRED.Themyriadoftechnological
uncertaintiesareobvious.Itisclearthattheseuncertaintiescouldnotberemovedbyroutineengineering.Indeedeven
withtheappellant'shighlydevelopedskillsinthisareaanumberoftheproblemscouldnotberesolved.Themethodical
testingofhypothesesisapparentfromthedetailedreportssubmitted.ThetechnologicaladvanceswerediscussedbyDr.
Babb both in his viva voce testimony and the conclusions which are reproduced above. I have not reproduced any
passagesfromExhibitR7,relatingtothehydraulicdesignandspecificationsforhydraulicmodeltestsforheadwork.It
doeshoweverunderline,inthelistofobjectives,evenmorethanthefinalreportandtheevidenceofDr.Babb,thehigh
degreeofriskanduncertaintyinherentintheproject.

[41]ThisprojectclearlyqualifiesasSRED.

TheWaltersDamApronRepair

[42]OnthiscasetheappellantwasretainedbyCarolinaPower&LightCompany.TheWaltersDamisanarcheddam
with 14 gated bays. Water passes over a short crest section at the top through the gates and plunges 180 feet into a
concretebasin.Duringperiodsoffloodingwhenlargevolumesofwaterpassoverthedam,theconcreteaprononwhich
itfallsisdamaged.

[43]Thedamwasbuiltin1930andthedamagefromthefallingwaterwasrepairedin1972and1990.Dr.Babband
HankFalveyofNHCvisitedthedamonDecember6,1990andwrotetoCarolinaPower&LightCompanyonJanuary15,
1991andsetouttheproblem:

AnalysisofFailure

Theattachedtripreportdescribesthefollowingdamageproducingprocesses:

. High pressure created by the impact of the water falling 180 ft on the concrete apron finds a path to the
undersideoftheapronthroughbothopengroutpipesandconstructionjoints.

. The original uplift has a perimeter bounded by a large crack, having an approximate diameter of 40 ft, and
occurredasaresultofexcessiveshearstresses.

.Thecrackwasproducedbyverticalupliftforcesthatexceededthecombinedtensilestrengthoftheconcrete,
theweightoftheconcreteslab,andtheimpactforceofthewater.

. The uplift either delaminated the apron from the foundation, or of the newer, upper apron slab from the
original lower apron. This resulted in uplift of the slabs at the downstream end of the apron with the uplift force
transmittedfromoneslabtothenextthroughthesteelreinforcingbars.

.Theaveragepressurerequiredtogeneratethisupliftisestimatedtobeslightlymorethanhalfthereservoir
pressure.

[44]OnJanuary25,1991,theclientwrotetoNHCsettingouttheobjectivesofthemodelstudy:

In response to your letter dated January 15, 1991, we are writing to finalize the objectives for the model study. Our
primaryobjectivesforthemodelstudyareasfollows:

1.Reproducetheconditionsthatledtotheaprondamage.

2.Determinethemaximumupliftpressures.

3.Determinethewaterflowand/orgateopeningcombinationwhichresultsinthemaximumupliftpressure.
4.Documentifthemaximumupliftisatransitoryphenomenon.

Asecondaryobjectiveforthestudywouldbetodocumenttheeffectofaplungepool.Whilethisisapotentialapproach
toreducetheupliftontheapronslab,thedesignandconstructionofadownstreamweirisprobablynotjustifiablewhen
comparedtoananchoredslab.

[45]Amodelonascaleof1:40wasconstructed.

[46] The first solution considered was to construct radial divide walls, the purpose and effect of which was to
simulatetheeffectofopeningallofthegatesatonceinthatitdeflectedthefallingjetofwater.

[47]Thesecondsolutionwassimplytochangethesequenceofthegates,orpassthewaterthroughmoregates.
Essentiallythepurposeofthissolutionwastodissipatethewaterfallingontheconcrete.

[48]Othersolutionsinvolvedthereshapingoftheapronandthesealingofapronjoints.Theideaofrepairingthe
aproninitselfishardlyinnovative.Repairsareaninevitableconcomitantofdamage.Thesolutionsuggestedwentbeyond
mererepair.Itinvolvednotmerelytheconstructionoffourfootlayersofconcrete,butratheralargemassofconcrete
whichpressuresfrombelowcouldnotmove.

[49]Therewasclearlyatechnologicaluncertaintythatconventionalengineeringcouldnotremove.Imaginativeand
innovative hypotheses were tested methodically anda technological advance was made in understanding the effect of
thefallingjet,andthespreadingofflowthroughthechangeinthesequenceofopeningthegatesaswellasthroughthe
dividewallsystem.

[50] The technological advance was not spectacular but, as observed above, what may seem routine in hindsight
involvedinnovativehypothesesaswellasconsiderableexperimentation.

[51]IthinkthisprojectqualifiesasSRED,althoughitisnotoneofthemoreobviouscases.

TheWhiteRiverDiversionDam

[52]ThisprojectinmyviewrankswithorjustbelowtheRaptiRiverprojectintermsoftechnologicaluncertaintyand
difficulty.

[53]TheWhiteRiverDiversionDamwasconstructedin1910.ItisownedbythePugetSoundPowerandLightCo.
NHCwasretainedbyafirmofengineers,HDREngineeringInc.ofBellevue,Washington.

[54] The purpose of the dam is to divert the river to an intake that leads to a power canal for the purpose of
generatinghydroelectricpower.Dr.Babbputthepurposeasfollows:

A. Primarilykeeping thebed material, again the sands and the gravels out of the intake, andalso the
establishmentoffavourablefishattractioncurrentstotheseentrances.

Q.Whatwerethedevelopmentphasesthatyouundertookinproceedingalongthisproject?

A.Intheinitialdesign,itwasprimarilydonebyHDR.Hehadinputtotheinitialdesignthatwastestedin
themodel.Oncethemodelwasconsiderednecessary,thenthestagesthereweretoessentiallycheckthemodeltosee
thatitreproducedtheobservedconditionsinthisalreadybuiltstructure.Thesecondwastotesttheinitialdesign.Thirdly
wastoifthedesigndidn'tperformitsdesiredobjectives,wastodevelopthatdesign,andfourthlywastodocumentthe
adopted final design over a series of different flow conditions, which involved also establishing a certain gate opening
sequence.

[55]ItshouldbenotedthattheappellantwasretainedbyHDREngineeringInc.whichisitselfalargeengineering
firmwhoseexpertiseincludedhydraulicengineering.

[56]InExhibitA12,therearesetoutanumberofalternativesconsideredbytheappellantforthephysicalmodels.
Thatexhibitdescribestheoperationalproblemsthattheprojectwasintendedtocorrect.

OPERATIONALPROBLEMS

Theoperationalproblemsthataretobecorrectedbytheprojectcanbesummarizedasfollows:

.Waterlevelcontrolupstreamofthediversiondamoverafullrangeofdischarges.Theexistingdamisatimber
crib structure with 7foot high flashboards that maintain water levels during normal flows but can be removed or will
washoutathighflows.Thesearetobereplacedbyoperationalgatesofsomekind.

.Theslidegatesintheintakestructureareoldandneedrefurbishmentorreplacementasnecessarytosupport
overalldesign.

. Therivertransportsasignificantbedloadofsand,gravelandcobblesthatcollectsupstreamofthediversion
damandentersanddepositsintheintakeandinterfereswiththeoperationoftheintakegatesandobstructstheflow.
Accordingtosamplestakenfromthebedbelowanyarmouring,thismaterialiscomposedofabout75%gravel,20%sand
and5%fines.Themediansizeofthegravelfractionisabout80mm.Thelargestsizesampledisabout100mm.

.Theriveralsotransports,insuspension,alargequantityofsandthatistransportedthroughtheintakealong
with the flow going to the Lake Tapps storage reservoir. This sand is deposited in intermediary basins and is removed
periodically.

.Therivertransportssignificantquantitiesoffloatingdebristhatcollectsinfrontof,orenters,theintakeand
disruptsoperations.

.Theexistingdikesthatprotectdevelopmentalongtherightbankoftheriverfromfloodingduringhighflows,
needtoberaisedandupgradedandprotectedfromerosionbyfloods.

.Therearefishfacilitiesatthediversiondamonbothbankswhichmustcontinuetooperatesuccessfullywiththe
new design. These include fish trap facility on the left bank operated by the Corps of Engineers to collect upstream
migrants and transport them above Mud Mountain Dam and a fish hatchery on the right bank operated by the
Muckleshoot Indian Tribe. In addition, the fisheries agencies have imposed operational restrictions on the diversion
relatedto:

.minimumflowreleases,and

.therateatwhichflowchangesareimposed(rampingrates),

andmayimposeoperationalrestrictionsonsedimentreleases.

.Operationrequiresanattendant24hoursperday.Thefacilityistobeautomated.
[57]Theportionofthereportthatisquotedaboverepresentstheidentificationandarticulationoftechnological
uncertainty.

[58]Thefollowingpassagesetsoutthehypotheseswhichthetestingprogramwasintendedtotest:

PROJECTOPTIONS

HDRhasidentifiedfiveprojectdesignoptions.Thenumberofoptionsorthefeaturesoftheoptionsmightbechanged
before or during the physical modelling program. Three of the design options are currently under consideration for
physicalmodellinginvestigation.Thethreeoptionswhicharecandidatesformodellingincludethemodificationstothe
intakewhichwereincludedintheFERClicenseapplicationandcanbedescribedasfollows:

.intakeentrancemovedabout30feettowardsriver,

.louvereddebrisbarrier(replaceablebystoplogs)atentrance,

.overhung,submergedheadwallatintakeentrance,

.cantileveredintakedecktoformabedloadsedimentbarrier,and

.twoslidegatesreplacebyonelargerradialgate.

Otherproposedfeaturesincludealogboomandaboatbarrier.Theoptionsalsoallincludenewconcretestructureswith
various gate arrangements. They differ only in the arrangement of gates and sluices in the dam. The options can be
describedasfollows:

OptionIThisoptionincludesradialgatedsluicesandafreeogeecrestarrangedfromlefttorightacrossthe
damasfollows:

.3sluicebays,each50feetlongwithflooratEl660ftcontrolledby11foothighradialgatesonasillatEl660.5ft.
ThesebayswouldbeseparatedupstreamanddownstreambytrainingwallsextendingverticallytoEl666ft.

.freeogeecrestEl671.5extendingfromthesluicebaystotherightabutmenttooperateonlyifflowsexceeded
18,000cfs.

OptionIIThisoptionincludesflowreleasecontrolbycollapsiblerubberdamswitharrangementfromleftto
rightacrossthedamasfollows:

.anarrowsedimentsluicewithflooratEl660ftanda20footsluicegate11feethigh.

.3bays,each50feetlongwithflooratEl660ftcontrolledby11foothighcollapsiblerubberdamsfastenedtoa
sillatEl660.5ft.Thesebaysareseparated,downstreamonly,bytrainingwalls.

.freeogeecresttoEl671.5extendingtotherightabutment.

OptionIIIThisoptionwasincludedintheFERClicenseapplicationandincludesfoursedimentsluicesseparated
byoverflowsectionswithbasculegateswitharrangementfromlefttorightasfollows:

.overflowsection28feetlongwithcrestatEl666ftandcontrolledbyabasculegatetoEl671ft.
.anarrowsedimentsluicewithflooratEl660ftanda20footsluicegate11feethigh.

.overflowsection28feetlongwithcrestatEl666ftandcontrolledbyabasculegatetoEl671ft.

.anarrowsedimentsluicewithflooratEl660ftanda20footsluicegate11feethigh.

.overflowsection65feetlongwithcrestatEl666ftandcontrolledbyabasculegatetoEl671ft.

.anarrowsedimentsluicewithflooratEl660ftanda20footsluicegate11feethigh.

.overflowsection65feetlongwithcrestatEl666ftandcontrolledbyabasculegatetoEl671ft.

.anarrowsedimentsluicewithflooratEl660ftand20footsluicegate11feethigh.

.overflowsection65feetlongcrestatEl666ftandcontrolledbyabasculegatetoEl671ftextendingtotheleft
abutment.

[59]Thefollowingpassagesetsouttheobjectiveswhichthemodellingprogramisintendedtoachieve:

OBJECTIVESOFMODELLINGPROGRAM

The performance of the three structure options will be judged on the basis of a model testing program designed to
determine:

.Abilityofthestructuretopassbedloadwithoutallowingittoenterthecanal,depositinthevicinityofthecanal
intake,orinterferewiththedownstreamfishpassagefacilities;

.Abilityofgatedoutletstoremovesedimentsdepositedimmediatelyupstreamfromthedam;

.Abilitytoreleaseflowsdownstreamfromthestructurethatproduceacceptablescouranddepositionpatterns
andsafe,controlleddissipationofkineticenergy;

.Sensitivityofstructureperformancetoshiftsinupstreamapproachflowdirectioncausedbychannelinstability;

.Waterlevelscorrespondingtofloods;

.Uniformityofflowenteringcanal.Anytendencyforunevenflowsproducingdeadareasorupstreamdirected
currentsareconducivetosettlingofsuspendedsedimentandincreasedheadloss,andshouldbeavoided.

. Headlossesforflowenteringthroughthecanalintake,todetermineiftherequiredofftakecapacitycanbe
achievedwithindesignwaterleveldifferencesbetweenforebayandcanal;

.Capabilitytomanagefloatingdebrisbypreventingitfromenteringtheintakearea,andguidingittopreferred
collectionareas.

In addition to the above criteria established for comparison of the options, the following model objectives will be
achievedforthepreferredoption:

.Measurementofvelocitiesforuseinupstreamdikedesign;
.Establishingadetailedstrategyofdamgateoperationforeffectivepassageofbedload;

.Determinationofnumber,extent,alignmentandtopelevationofanyneededdividewalls;

.Assessmentoffeasibilityofnearfieldsedimentexcludernearcanalintake(optional).

[60]Ishallnotquoteextensivelyfromtheportionofthereport"NeedforPhysicalModelling"beyondobservingthat
the appellant is very familiar with numerical modelling and rejected it as a reliable form of testing its hypotheses.
Numerical modelling is an alternative to physical modelling only where "flow conditions and sediment transport
processesaresimpleenoughtoberepresentedbyanumericalsimulation".

[61] In a complex project of this sort a form of testing that is essentially twodimensional is, in the view of the
appellant,simplyinadequateandindeedrisky.Iaccepttheappellant'sopiniononthispoint.

[62] The result of the numerous tests that were performed was that a design was developed that resolved the
uncertaintiesassociatedwiththeinitialdesign.Sedimententeringthecanalwasreduced,theintakeflowdistributionwas
improved,theaccumulationofdebriswasreducedanddownstreamscourwasreduced.

[63]Themostsignificantdifferenceinthefinaldesignfromtheinitialdesignwastheconstructionofradialgates,the
inflatablerubberweirs,andthreewalls,(excluder,divideanddeflector)adjacenttotheintaketothepowercanal.

[64] Of all of the projects put in evidence this one in my view resulted in the greatest amount of technological
advance.Itistruethatanyoneofthefeaturesofthefinaldesignmayhavebeenknownrubberweirs,radialgatesand
wallsofdifferenttypeswereknown.Itwastheinnovativecombinationandalignmentofthesefactorsthatmakesthis
projectunique.

[65] In fact, it was described in a published paper by Dr. Babb, Michael Blanchette, a senior engineer with Puget
SoundPower&LightCo.,andRobertKing,anengineerwiththeclientHDREngineeringInc.Theconclusionofthearticle
wasasfollows(ExhibitA13):

Conclusions

TheproposedreplacementdamfortheWhiteRiverProjectusesbedloaddeflectorandexcluderwallsandaflow
dividewallcombinedwithsetopeningsequencesforthegatesandrubberweirstoprovidetheeffectivebedloadpassage.
Thereplacementstructureusesa12bayintakeworksattheleftabutmentofthedamwithareleasesystemfeaturing
two radial gates and two rubber weirs. The structure successfully diverts flow with a minimum of bedload material
entering the intake. Favourable attraction flows to the left bank fish entrance were established with the riverward
relocationoftheentranceandtheearlyuseofRG1topassflowsadjacenttothefishentrancetoeliminatethereturn
eddy.AbuckettypedissipaterisuseddownstreamofRG2tocontrolscourandtoreducethemagnitudeofthereturn
flow.Mostdebrisapproachingthedamwillaccumulateontheleftbankupstreamfromtheradialgates,fromwhereit
will be either hydraulically passed or removed mechanically. The design of the proposed facilities was studied and
improvedwiththeuseofahydraulicmodel.Significantbenefitsofthephysicalmodelincluded:designrefinement,gate
sizing,scourprediction,bedloadbehaviourprediction,andagencydemonstrationandconsensusbuilding.

[66]Mr.Kingtestifiedconcerningtheneedtoretaintheappellantanditwasbecausehebelievedthatevenafirmas
largeashishadreachedthelimitofitscapabilities.

[67]IhavedealtatlengthwiththeWhiteRiverProjectbecauseitrepresentsinmyviewamodelofwhatanSRED
projectshouldbe.Everyelementofthecriteriasetoutatthebeginningofthesereasonsismet:technologicaluncertainty,
engineeringthatgoesfarbeyondtheroutine,methodicaltestingofuntestedandinnovativehypothesesandsignificant
technologicaladvances.
[68]Iamgreatlyindebtedtothetwohighlyqualifiedandimpressiveexpertsthatwerecalled.ProfessorC.D.Smith,
wascalledbytheappellantandJoePloegwhowascalledbytherespondent.

[69]Althoughtheyarrivedatverydifferentconclusionstheywere,interestingly,notthatfarapartinsomeoftheir
approaches. I think that what divided them was the question whether the appellant's activities constituted routine
engineeringorstandardpracticeandwhethertechnologicaladvanceswereachieved.

[70]Mr.Ploegadoptedthestatementintheinformationcircular:

StandardPracticereferstodirectlyadaptingaknownengineeringortechnologicalpracticetoanewsituationwhenthere
isahighdegreeofcertaintythattheknowntechnologyorpracticewillachievethedesiredobjective.

[71] In his initial report Mr. Ploeg appeared toconcentrate on the question whether advances were made in the
theoryorpracticeofhydraulicmodelling.Thatwasnotthebasisoftheclaims:

Thedesign,calibrationandoperationofthehydraulicmodelsforthe17projectsincludedinthisSR&EDclaim,canonly
bedescribedas"standardpractice"or"routineengineering".Theproposalsforhydraulicmodeltests,preparedbyNHC
expressahighdegreeofconfidencethattheirtechnologicalknowledgebase(i.e.theirknowledgeandunderstandingof
the theory and practice of hydraulic modelling) is quite comprehensive and certainly sufficient to achieve the desired
objectives(ref.par.4.2ofIC864R3).

...

Havingcarefullyreviewedall17projects,itismyopinionthatnonewmaterials,devices,productsorprocesseshavebeen
created, or existing ones improved. Each project provided important information to NHC's clients, allowing them to
optimizethedesignofastructureorasystem.Allprojectspresentednewsituations,butstandardhydraulicmodelling
practicescouldbeusedtoachievetheobjectivesofeachproject.

[72] In his rebuttal report Mr. Ploeg concentrated rather on whether the projects led to generic or specific
technologicaladvancements,andstated:

The actual method used for solving an engineering design problem, be it physical or mathematical modelling, does by
itselfnotleadtoadvancingthetechnologicalbase.

[73] This observation may be true but the real question is whether the projects themselves led to technological
advances.Mr.Ploegstatedinparagraph2.2ofhisrebuttalreport:

Adetailedreviewofthe17projects,withparticularreferencetothe"advancements"listedinappendix1oftheExpert's
Report,shows,however,thatnorealneworimproveddevicesorprocessesweredeveloped.

ThedevicesandprocessesdevelopedbyNHCinthecourseofthemodellingworkforthese17projectsmayhavebeen
"new"inthesenseofanewlocation(i.e.ahydraulicstructurethatwasnottherebefore,ortheimplementationofariver
improvementscheme),butalloftheworkdescribedintheNHCprojectreportsreferstostandarddevicesandprocesses,
whichareroutinelyusedinsimilardesignsituationsallovertheworld.

Afterreviewingthe17projectsatissue,Ihaveconcludedthatnoneoftheprojectsledtogenericorspecifictechnological
advancements,withthepossibilityofcreatingneworimprovingexistingdevicesorprocesses,whichcouldalsohavebeen
usedinotherengineeringdesignsituations.Atestofsuchanadvancementwouldbethepossibilityofapatent.

Interpretation Bulletin IT439 (17 Sep. 1974) which applies to most of the projects, is quite specific in defining the
meaningof"new".Par.8ofthisbulletinstates:"ItistheDepartment'sviewthat"new"referstoaproductorprocessthat
isnewtotheparticulartaxpayerinCanada.However,whereataxpayermerelyduplicatesanotherperson'sproductor
process,thescientificresearch(i.e.systematicinvestigation)carriedoutwillprobablybeminimalandwillbeconsidered
routinetesting,whichisanexcludedactivitybyvirtueof2900(e)."

[74]ProfessorSmith,inhisreport,analyzedthequalificationsofthepersonsatNHCwhoengagedintheactivities,
and discussed the concepts of technological uncertainty, technological advancement, and systems uncertainty. His
conclusionwasasfollows(ExhibitA14):

WithregardtoNHCLexperimentaldevelopmentworkusingphysicalhydraulicmodels,itmaybeconcludedthat:

a) The work has been performed using a systemic approach using qualified personnel with relevant
experience.

b)Ineachofthe17projectsreviewed,withoutexception,problemsrequiringsolutionswereidentified
that could not be resolved by analytical methods alone. An experimental development program including the use of a
physicalhydraulicmodelwasrequiredineachcase.

c)Technologicaladvancementhasbeenachievedinseveralways.First,atechnologicaluncertaintywas
eliminated or reduced, without which the project could not proceed. Second, design solutions which were found
experimentallyadvancedtheunderstandingoftheproblemsothattheknowledgegainedcouldbeusedtoadvantageon
subsequentstudiesofsimilarproblems.Third,asaresultofcumulativeexperiencegainedfromeachnewinvestigation,
theknowledgebaseoftheNHCLengineersandspecialistswasadvanced.

In summary, in the opinion of the writer, the 17 NHCL projects reviewed satisfy the criteria for experimental
developmentasdefinedintheIncomeTaxAct.

[75]Hiscommentsoneachoftheprojectsthatwereputinevidencewereasfollows:

1EastRaptiIrrigationProject(1984)

Location:Nepal

Client:NipponKoeiCo.Ltd.,Tokyo

Object:Developmentofhydraulicstructuresandriverprotectionworks

Modeltype:Rivermodel(distorted)1:200,1:50scale,hydraulicstructure(2models)1:30scale

Uncertainty:Theunknowneffectofheavysedimentmovementandcomplicatedstructurecombination(including
weir, sluiceway, headgate, ejector, settling basin, fish ladder, log passage and river training works) on project
performance.

Observations:Problemswithadverseflowpatterns,scour,sedimentation,anddischargecapacitywereobserved.

Advancement:Modificationsweremadetotheupstreamrivertrainingworks,sluiceway,canalintake,apronsand
logpassagethusfacilitatingdevelopmentoftheproject.

...

4SchuylkillRiverSedimentationstudy(1991)
Location:Pennsylvania

Client:CityofPhiladelphia

Object:Investigatesedimentationproblematboatdock

Modeltype:Rivermodel,1:65scale

Uncertainty:ThecauseofexistingsedimentationproblemsatBoathouseRow,andremediationmeasuresneeded
tocorrecttheexistingundesirableandunsafeconditions.

Observations:Adversenaturalsedimentationpatternswereobserved.Anattemptedcorrectionbybankgroins
wasunsatisfactory,andbyflushingwasunsatisfactory.Aninlinedividingwallwithanupstreamgroinwasmosteffective.
Dredgingwasfoundtobeatemporarysolutiononly.

Advancement:Thesedimentationpatterncausedbythebendeffectwascorrectedbyadividingwall.

5WaltersDamApronRepair(1991)

Location:NorthCarolina

Client:CarolinaPowerandLightCo.,RaleighNC

Object:Investigateapronfailureofexistingspillway

Modeltype:Hydraulicstructure,1:38scale

Uncertainty:Thecauseofthefailureoftheexistingapron,andthenatureofcorrectiveactionrequiredtoavoid
futureproblems.

Observations:Theapronfailurewascausedbyupliftpressurerelatedtothedesignandoperationoftheexisting
structure.

Advancement:Agatesequenceoperationtoreduceupliftforceontheapronwasdetermined,andasetofradial
dividewallswasdevisedforthebasintoimproveflowdistribution.

...

7WhiteRiverDiversionDam(1992)

Location:Washington

Client:HDREngineeringInc.,Bellevue

Object:Rehabilitationandupgradingof80yearolddiversiondam

Modeltype:River/hydraulicstructure,1:40scale
Uncertainty:Theeffectofdesignmodificationsonperformance,andthemechanismforcontrolofsediment&
debrisflowsatintakeandproblemsoffloodpassageduringconstructionwereunknown.

Observations:Flowpatternsandbedloadmovementforseveralgatealternativesandintakearrangementswas
observed,anddownstreamscourpatternswereobserved.Adividewallwasrequiredfortheintakestructure.

Advancement:Thecofferdamarrangementforconstructionwasdevisedandthegatesequenceoperationsfor
sedimentevacuationweredetermined.Theuncertaintieswereremoved.

...

17BellevilleHydroelectricProject(1994)

Location:OhioRiver,Ohio

Client:OmegaJV5,AMPOHIO,Westerville

Object:Studyimpactofpowerhouseadditiononproject

Modeltype:Rivermodel,scale1:100;powerhousesectionmodel,scale1:30

Uncertainty: The effect of cofferdam works and powerhouse discharge on navigation, stage, surge and
sedimentationwasobserved.Thepowerhousewaslocatedinadeeprecessintheleftbank.

Observations:Highleftbankvelocitiesandincreasedbedmobilitywerenoteddownstreamfromthepowerhouse,
requiringdesignchangesinthepowerhousetailracechannel.

Advancement: Design improvements were made, the uncertainties were removed and project development
facilitated.

[76]Inhisrebuttalreport,inwhichhecommentsonMr.Ploeg'sreport,ProfessorSmithstated:

InallbutoneofthestudiesclaimedbyNHC,theirclient(ortheclient'sengineer)hadappliedstandarddesignpracticein
attemptingtoadaptaknownengineeringpracticetoanewsituation.Butthey,ortheregulatoryagencyresponsiblefor
grantingapprovals,orboth,didnothaveahighdegreeofcertaintythattheresultingdesignwouldachievethedesired
objectives.Itisbecauseofthisuncertaintythatanexperimentalinvestigationusinghydraulicmodellingwasundertaken.

[77]Inparagraph2.4ofhisrebuttalreportheobserved:

Giventhatextensivemodificationswererequiredonanumberofthedesignssubjectedtoexperimentalevaluationand
developmentandthattheendproductoftenborelittleresemblancetotheinitialconceptualdesign,itisunrealisticto
depictthetechnologicalcharacteroftheproduct(hydraulicstructureorsystem)asbeingsubstantiallyset'.Realistically
theobjectivesweretodetermineiftheinitialdesignworkedatall,todeterminewhattheperformanceproblemswere,
andtosystematicallyresolvetheseproblemsinanexperimentaldevelopmentprogram.

Afurtherindicationthattechnologicaladvancementoccurredisrelatedtotheuncertainty,inthemindsofthedesigners,
orregulators,aboutthecapabilityoftheinitialdesigntoperformsatisfactorilyintermsofthedesignobjectives.Itisthis
uncertainty that resulted in the need to have NHC undertake an experimental investigation. In almost all cases the
experimental work showed that the uncertainty was well founded as the experimental evaluation indicated significant
performance problems. These problems were solved by subsequent experimental development work. It is my opinion
that this constitutes a technological advance in that known engineering practices could, as a result of experimental
development, be confidently applied to a new situation where this could not be done solely through application of
standarddesignpractice.

[78]Theconclusionsstatedinhisrebuttalreportwereasfollows:

IhaveconcludedthatthePloegReportisincorrectwithrespecttothefollowing:

1.ThebasisfortheNHCclaimisintheareaofexperimentaldevelopmentofdesignsforhydraulic/sedimentcontrol
structures,notinmodeltestingtechnology.

2. NHC work in development of designs for hydraulic/sediment control structures by physical hydraulic model
testingdoesnotfallinthecategoryofstandardpracticeinhydrotechnicalengineering.

3.ThemethodologyfollowedbyNHCinconductingtheirexperimentalstudieswastouseahydraulicmodelasa
tooltoevaluateperformanceoftheirClient'sinitialdesign,toidentifyperformanceproblemsandtosystematicallysolve
theseproblemsinanexperimentaldevelopmentprogram.Thisdifferssignificantlyfromamethodologywherebymany
variantsofadesignaretestedwiththetestdatathenusedtoprepareasatisfactoryandoptimaldesign.

4.NHCmodellingspecialistsclearlyhadamajorresponsibilityintheexperimentaldevelopmentworkineachofthe
studiesincludedintheclaim.

5.Atechnologicaladvancewasmadeforeachofthestudiesundertaken,includinganincreaseinthetechnological
knowledgebaseoftheNHCspecialists.

[79]Itwasobviousthateachexperthadgreatrespectfortheability,experienceandqualificationsoftheotherone.
Although I recognize and respect Mr. Ploeg's expertise in this area, I have concluded that Professor Smith's opinion is
moreconsonantwiththeevidenceadducedandmyownviewofwhatconstitutesSREDforthepurposesoftheIncome
TaxAct,exceptthatIamnotpersuadedthattheSchuylkillprojectconstitutesSRED.

[80]Therespondent'sposition,ablyarticulatedbyMr.Yaskowich,wasessentiallythattheappellant,admittedlya
worldleaderinthefieldofhydraulicmodeltesting,byitsownexcellencesetsthestandardforwhatrepresentsroutine
engineeringorstandardpractice.

[81]WithrespectIthinkthatthissetsanunrealisticallyhighstandardindeedastandardofperfectionthatwould
discouragescientificresearchinCanada.

[82]Itisquitetrue,asMr.Yaskowichobserves,thattheworkdonebyNHCdoesraisetheclient'sconfidenceina
solutionthatisproposedordevised,butIdonotthinkthatthisfactinitselfdetractsfromthenatureoftheactivity,or
makesitanythelessSRED.Hecontendsfurtherthatitiswrongtoequatetechnologicaluncertaintywiththeclient'slack
of confidence that a design will work. Expressed in that way, I agree, but it goes beyond that. The technological
uncertaintyissomethingthatexistsinthemindofthespecialistsuchastheappellant,whoidentifiesandarticulatesit
andappliesitsmethodstoremovethatuncertainty.

[83]IhaveconcludedthatfourofthefiveprojectsdescribedabovequalifyasSRED.

[84] Since the parties are still actively negotiating figures counsel for the appellant is directed to prepare a draft
judgmentincorporatingtheseconclusions.Theappellant,havingbeensubstantiallysuccessful,isentitledtoitscosts.

SignedatOttawa,Canada,this1stdayofMay1998.
 "D.G.H.Bowman"

J.T.C.C.

COURTFILENO.:NorthwestHydraulicConsultantsLtd.
andHerMajestyTheQueen

STYLEOFCAUSE:97531(IT)G

PLACEOFHEARING:Vancouver,BritishColumbia

DATESOFHEARING:February1618,1998and

March24,1998

REASONSFORJUDGMENTBY:D.G.H.Bowman

DATEOFREASONS:May1,1998

APPEARANCES:

CounselfortheAppellant:WilliamA.Ruskin,Esq.

CounselfortheRespondent:JamesO.Yaskowich,Esq.

COUNSELOFRECORD:

FortheAppellant:

Name:WilliamA.Ruskin,Esq.

Firm:Clark,Wilson

Barristers&Solicitors

Vancouver,BritishColumbia

FortheRespondent:GeorgeThomson

DeputyAttorneyGeneralofCanada

Ottawa,Canada