City Star Roofers v. 216942 Ontario Limited 2022 Ont CA
After a mediation, the parties agreed that the owner could hold back $30,000. It would be released to the contractor after the contactor completed all deficiencies to the satisfaction of the owner’s engineer. The contractor has a specified time to do so and, upon failure, would receive none of the money. The contractor attended to fix deficiencies, but the engineer reported after the due date that the contractor still needed to complete about $10,000 worth of deficiencies. The contractor argued that the remaining deficiencies were only worth about $2,500. The owner kept all of the $30,000. The court held that the mediation terms were not unconscionable and refused relief from forfeiture: the mediation agreement was made with counsel and merely adopted a practical solution to resolving the parties’ dispute. It was not a penalty.
Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.