Legal Blog

Conditions for Substantial Performance

1838120 Ontario Inc. v. Township of East Zorra- Tavistock 2021 Ont SCJ

The contractor issued a number of invoices for extras. The judge noted that a limitation period for each invoice would commence within a reasonable period of time for the invoice to be issued and a reasonable period of time for the invoice to be paid. What is reasonable is context-dependent and circumstance-dependent and follows the parties’ contract and past practices regarding the issuance of invoices and when payments were made. The court also noted that postponement of a limitation period from the date when it is legally appropriate will not allow a party to delay the commencement for some tactical or other reason beyond two years from the date the claim is fully ripened. Using these criteria, the judge noted that claimed extra work done in July should have been paid by August 6 and work done in August should have been paid by September 18 and that the limitation periods commenced on the next day after each. The judge also noted that a clause in the contract stipulated that the contractor had to provide a statutory declaration indicating all liability incurred by the contractor and the subcontractors in carrying out the contract had been discharged. Since the contractor never did so (because subcontractors had not been paid), the contract administrator was not obliged to issue a certificate of substantial performance.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.