Legal Blog

Holdback Calculation

Thompson v. Carleton University 2019 Ont SCJ

The judge discusses basic holdback and notice holdback. He rejected the general’s “after-the-fact” attempt to reduce the value of the contract because of payments being made directly to the subcontractor’s material suppliers. Those payments were merely to be credits towards amounts due on contract. The judge noted that, although certification of the value of the contract can be revisited, the party wishing to do so has a significant onus to show that the payment certificate was issued in error. In this case, the subcontractor had not even requested payment of the amount due; rather, the general, on its own initiative, determined the value of the contract performed as the date of the payment certification. The judge calculated the basic holdback based on that certificate of payment.

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