Legal Blog

Accelerated Delay

In our July/96 newsletter, we reported on the B.C. Supreme Court’s decision in Foundation Company of Canada v. United Grain Growers. That matter was appealed and, recently, a decision has been given by the Court of Appeal.

Let us first refresh your memory by giving you a quick summary of the facts.

An owner was renovating a grain terminal and hired a general contractor to complete the renovations. The general contractor contracted with a sheet metal subcontractor. The project was delayed and all three parties blamed each other.

The judge awarded the subcontractor damages for four months of delay. He held that the general contractor was liable for one month of those damages and that the owner was liable for three months of those damages. The judge also awarded damages for delay to the general as against the owner.

What is particularly interesting about the case is that it involved 99 days of discovery and 132 days of trial. The damages ordered were in excess of $1,000,000 but the costs incurred were in excess of $5,000,000. The reasons for decision of the trial judge were 212 pages in length. The case comment by Jonathan Speigel was published in the Construction Law Reports and was approximately 20 pages in length.

Of course, the appeal brought by the owner was equally complex. Transcripts of evidence had to be typed, 37,000 pages of exhibits had to be collated, and factums (i.e. statements of fact and law) provided to the Court of Appeal, that are normally limited to 30 pages, were over 200 pages. The appeal took five days to argue.

The court noted that “appellate courts should not interfere, whether the findings (of fact of a trial judge) are based on credibility or otherwise, if there is evidence upon which such findings may be made. In all but the most exceptional circumstances, we are not able to substitute our views of the evidence for those of the learned trial judge.”

At the end of the day, the owner was unsuccessful on every ground of appeal that it raised. The general contractor was successful on the one, relatively minor, ground of appeal that it raised against the subcontractor. The owner, no doubt, will have to pay its own lawyers for the appeal and, in addition, a portion of the legal fees of the general contractor and subcontractor. This litigation therefore, has proved to be extremely costly to the owner.