Legal Blog

Delay Claims (part two)

Owners and contractors, whether generals or subs, will at one time or another be faced with a delay claim. In Total Meter Services Inc. v. Aplus General Contractors Corp., a 2015 decision of the Ontario Superior Court of Justice, a sub claimed, by way of motion, for money due on contract and the general countered with a delay claim and a deduction for non-compliance with the sub’s duties to provide as built drawings and warranty documents.

Documents

The general held back $260,000, about 10% of the total contract. The sub attempted to suck and blow simultaneously. Its president stated that the sub refused to provide the documents because it had not been paid; he then stated that the sub had provided all necessary documents. The motions judge decided that the holdback was reasonable and that the issue of document production would be decided at trial.

Delay

 The judge held that the general had provided no real evidence to satisfy the criteria for a delay claim and struck that aspect of the defence. In doing so, he set out the ground rules.

 “In order to recover damages for a delay claim, the following must be established:

(a) the cause of the delay must be isolated and defined;

(b) the delay must be analyzed to determine whether it is excusable or the responsibility of the contractor;

(c) if the delay is the contractor’s responsibility, the contractor must bear the cost. If it is excusable, the extent of the delay must be determined;

(d) the contractor must prove that actual or constructive notice of the delay was given if required by the contract;

(e) it must be established whether the delay affected items on the critical path or whether it merely reduced or eliminated the float;

(f) the contract must be reviewed to assess whether it provides that the contractor is entitled to a remedy of extension of time only or time and compensation; and

(g) the quantum of compensation must be determined.

… these principles apply equally to claims brought by a contractor against its subtrade.”

In some situations, these matters can be proven through ordinary testimony. In most, however, expert evidence is necessary to make sense of a complex construction project with many inter-related, and often concurrent, causes of delay and how they affected the project.

Image courtesy of Jppi, Creative Commons.

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