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Valard Construction Ltd. v Bird Construction Co. 2016 Alta CA

Same situation as in Dolvin Mechanical v. Trisura 2014 Ont SCJ only the bond was taken out by the electrical subcontractor (the principal) in which the obligee was the general contractor. The bond surety denied coverage because the subsub applied for payment on the bond past the time limitations set out in the bond. The subsub sued the general contractor claiming that it should have notified the subsub of the bond’s existence. As in Dolvin, the majority held that an obligee had no duty to inform the bond beneficiaries of the bond’s existence. The minority held that the principal had a fiduciary duty to post the bond at the construction trailer so that subsubs would know about it.

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