A financial safeguard for builders

By Dean G. Giles, Fillmore Riley LLP

Many construction projects proceed without incident. Unfortunately, experience shows that damage can occur during construction, leading to significant repair or replacement costs. Builder’s risk insurance is specifically designed to indemnify against property loss to buildings and structures while they are under construction. 

In the leading case of Commonwealth Construction Company v. Imperial Oil Limited, the Supreme Court of Canada described the function of builder’s risk insurance (also known as course of construction insurance) as follows:

Best to own it!

By Steven Z. Raber, Fillmore Riley LLP

Most talk of “building your brand” properly focuses on marketing issues. Some-times, what gets overlooked are the legal processes available to protect a brand.

Business owners – and their advisors – are good at fulfilling their legal obligations around the registration of corporate names and business names. Where they often fall down is in actually protecting their brands.

It should be noted that the requirement to register under legislation like The Business Names Registration Act or The Corporations Act is not intended to confer rights on the owner. These statutes are intended to protect the public so, if something goes wrong, the public knows who to pursue.

Strange new world of OHS issues at construction sites

By Patrick Groom and Victor Kim, McMillan LLP

In this strange new world of construction during the COVID-19 pandemic, new types of protective equipment, physical distancing measures, hygiene practices and health screening measures – many of which were unimaginable or unnecessary on construction sites only a few months ago – have become widely accepted. These measures will likely remain in place throughout the pandemic and may continue after.

Proceed with caution!

By Steven Z. Raber

It is not uncommon to find dispute resolution clauses in contracts of all kinds. They often lurk towards the end of commercial contracts, or in the “fine print” of consumer agreements. Many folks do not give them much, if any, notice until it’s too late.

A cautionary tale from Alberta's highest court

By Jason E. Roberts, Fillmore Riley LLP

Limitation of liability clauses are often found in con- struction contracts. These clauses generally serve to limit the amount payable as damages by a party in the event of faulty design or workmanship on its part.

However, the recent decision of the Alberta Court of Appeal in Swift v. Tomecek Roney Little & Associates Ltd. signals that parties to construction contracts should exercise caution when relying on limitation of liability clauses.

The facts of the case are reasonably straightforward and, although they involve the construction of a single-family home, there is no reason to suggest that the principles set out by the court would be inapplicable to other types of construction contracts. Mr. and Mrs. Swift owned land on Vancouver Island, on which they planned to build a home. Mr. Swift entered into an agreement with an architectural firm (the “Architects”) to design the home (the “Agreement”). The Agreement contained a limitation of liability clause, which protected the “Architects (referred to in the Agreement as the “Designer”)”:

The duty of good faith in contractual performance

By Dean G. Giles, Fillmore Riley LLP

A 2014 decision of the Supreme Court of Canada dealing with the question of good faith contractual performance, and a more recent lower court decision that applies its reasoning, could have a significant impact on the way in which contracts created as part of the tendering process are interpreted. 

Relief from strict compliance with timelines under builders' liens legislation

By Jason E. Roberts, Fillmore Riley

With limited exceptions, those who are unpaid for the performance of work, provision of services or delivery of materials to a construction project have the right to register a builder’s lien against the legal title of the owner of the land on which the work, services or materials were performed, supplied or delivered. Typically, the lien is registered for the value of the unpaid work, services or materials. Once the lien is proved, the lien claimant may take steps to sell the owner’s interest in the land in order to be paid.

The provincial builders’ liens statutes set out rigid timelines for filing the liens, as well as filing actions to prove the liens, and registering certificates of pending litigation (“CPLs”) against title to the affected land. The rationale for rigid timelines is that the timely administration of the construction lien process provides certainty for lenders who are financing the project, as well as subsequent purchasers of the property, all of whom rely on the accuracy of title information when advancing funds or closing a purchase. For this reason, courts have typically taken a hard line when it comes to compliance with the statutorily imposed timelines. However, two recent decisions from the Alberta courts suggest that strict compliance with these timelines can sometimes be avoided.

Different legal requirements for group terminations when operating in the Canadian North

By Genevieve E. Mushaluk and Jenna R. Seavers, Fillmore Riley LLP

In December 2015, a mass termination of employment took place at the troubled De Beers Canada mine, located in Snap Lake, N.W.T. CEO Kim Truter personally advised 434 employees that they were out of work and that the mine would be closing. Of the 400 permanent employees, about 100 were northerners.

In addition to making difficult business decisions, companies must also navigate employment law to ensure the execution of “group terminations” is in accordance with employment legislation. In the De Beers layoff, which involved the termination of more than 300 employees, the legislation provides that permanent employees were entitled to 16 weeks’ notice of the termination of their employment. Further, pursuant to the legislation, De Beers was required to inform the government of its intention to terminate the employees.

“Group termination” refers to a situation in which an employer will be terminating numerous employees working in a single location, either simultaneously or within a short timeframe. In most provinces, when an employer plans to terminate 50 or more employees in a span of four weeks or less, employment legislation requires that the employer be mindful of specific group termination legal obligations. One of the requirements is that the employer must provide notification to the government.

Group terminations are covered in both federal and provincial employment legislation. The general requirements are largely similar for employers operating federally and within most of the Canadian provinces; however, different rules come into play when dealing with the northern provinces and/or territories, specifically Yukon, Northwest Territories and Nunavut.

Alberta government loosens requirements for joint worksite health and safety committees and health and safety representatives

By Sheena Owens and David Price, Stikeman Elliott LLP

On Dec. 13, 2019, the assistant deputy minister of the Department of Labour and Immigration issued a Director’s Order loosening the requirements for joint worksite health and safety committees and health and safety representatives in Alberta (the Order). The Order came into effect on Jan.31, 2020.

SOMETIMES IT DOESN'T PAY TO "SHOP AROUND"

By Steven Z. Raber, Fillmore Riley LLP

The Ecklands, an Ontario couple, wanted to build a new house. They had a sense of what they wanted in their new home and looked for a builder. That led them to Oakcraft, a builder of custom homes in their area.

Employers must avoid discrimination during their hiring process

By Dayna M. Seinfeld, Fillmore Riley LLP

It is often said that human rights law sets out a “minimum floor” of rights and obligations that becomes part of every employment relationship. This minimum floor does not depend on the existence of an employment agreement. Rather, these rights and obligations are engaged at the hiring stage, from the time an employment advertisement is posted or a pre-hiring process is started. Every employer needs to be aware of what their human rights obligations are each time they embark on the process of hiring a new employee.

What you need to know about the new Breach Notification Rules under PIPEDA

By Kelsey M. Yakimoski and Paul K. Grower, Fillmore Riley LLP

On Nov. 1, 2018, the new mandatory breach notification rules under the Personal Information and Protection and Electronic Documents Act (PIPEDA) and the related Breaches of Security Safeguards Regulation came into force. PIPEDA applies to organizations that are either: 1) federally regulated; 2) move personal information across provincial or international borders; or 3) located in provinces who have failed to adopt similar legislation to PIPEDA – which, at present, is every province except Alberta, British Columbia and Québec.

Failure to take reasonable safety precautions and provide adequate training can result in hefty fines

By Kirk A. Vilks, Fillmore Riley LLP

In the Q4 2013 edition of Piling Canada, James Wishart wrote about the Ontario Court of Appeal decision in R. v. Metron Construction Corp. (Metron). In that case, the Ontario Court of Appeal handed out fines to corporate defendants for criminal negligence that were large enough to potentially bankrupt the companies. It was held that that the courts should not take companies’ financial situation into account when determining fines for criminal negligence. More recently, Canadian courts have continued to follow this approach by awarding large fines without consideration of the financial implications for the companies

In 2013, the Ontario Court of Justice convicted Sunrise Propane Energy Group Inc. for multiple regulatory offences under the Ontario Environmental Protection Act (EPA) and Occupational Health and Safety Act (OHSA). The judgement – R. v. Sunrise Propane Energy, 2016 CarswellOnt 3399 – pertained to an incident that caused propane explosions in Toronto in 2008 that killed a young worker and caused a fire.

There were a series of explosions that caused extensive damage to surrounding properties and injuries to neighbours. Some surrounding homes were left uninhabitable for over a year. Approximately 12,000 residents had to evacuate the area within a 1.6-kilometre radius. Local businesses were forced to close, and one nearby car dealership was completely destroyed. At the time of the explosion, there were two employees on site; one was able to escape with minor injuries, but the other was killed.

Supreme Court of Canada rules in favour of proactive reporting

By Anthony R. Foderaro

The Supreme Court of Canada has recently held that an obligee under a labour and material

Canadian businesses and the European Union’s General Data Privacy Regulation

By Ranish Raveendrabose, Fillmore Riley LLP

Beginning in May 2018, users of social media may have noticed they were inundated with updated Terms and Conditions to which they had to agree before they were permitted to continue using the platform. Those who live and die by their smartphone were subjected to a deluge of these prompts. What instigated this? Four letters: GDPR.

Being unprepared or unknowledgeable can cost your company thousands of dollars or more

By Paul K. Grower, Fillmore Riley LLP

On July 1, 2017, Canada will be “celebrating” the third anniversary of Canada’s Anti-Spam Legislation – generally known as CASL (pronounced “castle”).

Whether a celebration is warranted is questionable. While the legislation was purportedly designed

 By Dean G. Giles,Fillmore Riley LLP

Contracts used in the construction and engineering fields often contain so-called “exclusion of liability” or “limitation of liability” clauses that purport to reduce a party’s exposure to certain claims that may arise in connection with a project. Clauses of this sort are a means by which parties to the contract seek to minimize risk and protect themselves from what might otherwise be a ruinous damages award should something go wrong and litigation ensue.

In some instances, the clause in question may operate to cap a party’s exposure at a specific monetary amount, while others seek to exempt a party from liability for certaintypes of losses. A common example, often found in construction contracts, is a provision stating that the contractor “shall not be liable loss of earnings or other consequential damages howsoever caused,” or containing words to that effect.

Consequential damages are those that arise from the nature of the innocent party’s business and include such things as lost profits, lost customers and loss of reputation. This is in contrast to so-called “direct damages,” which are those that, without taking into account the particular circumstances of the party suffering the loss, one would reasonably expect to flow from a breach of contract. Still other clauses may limit a party’s exposure to damages caused by negligent acts.

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Construction claims and COVID-19

By Krista Chaytor, Michael Swartz and Brian Kuchar, WeirFoulds LLP

As the economy sputters back to life following the interruption caused by COVID-19, members of the construction industry are surveying the economic havoc wrought by the pandemic and considering how to recoup their losses and move forward. This article explores some of the issues surrounding delay claims and offers guidance to contractors.

Be sure you know what you’re getting, and when

By James C. Wishart, Fillmore Riley LLP

For better or worse, the readers of Piling Canada are likely familiar with pay-when-paid clauses. Usually found in subcontracts between general contractors and subcontractors or suppliers, pay-when-paid clauses are intended to postpone the general contractor’s obligation to pay its subcontractors or suppliers until the general contractor has been paid by the owner for the relevant work. Even some industry standard contract documents, such as the CCA 1 – 2008 (Stipulated Price Subcontract), include pay-when-paid clauses.

The question that we most frequently get about pay-when-paid clauses is: what happens if the owner doesn’t pay the general contractor – does the subcontractor or supplier still have a right to be paid for its work or has it waived that right by accepting the pay-when-paid clause? In A&B Mechanical Ltd. v. Canotech Consultants Ltd. et al, 2013 MBQB 287, the Manitoba Court of Queen’s Bench considered a pay-when-paid clause and answered that question.

How vacating liens just doubled in price

By Sven T. Hombach, Fillmore Riley LLP

Construction liens are an unfortunate reality of virtually every large construction project, and many smaller ones as well. Designed to ensure that building trades are protected from non-payment, they have a history in Canada that dates back more than 100 years. Site owners who have ever had to deal with an insolvent contractor are well familiar with paying twice - once to the contractor, and once more to the unpaid trades who filed liens. However, in light of a recent Manitoba Court of Appeal decision, contractors are now facing that issue as well, at least on a temporary basis.

While the rules of construction liens are complex, the concept is very simple – unpaid contractors or trades can claim a lien against the underlying land. Since the land has value, the party who claims the lien will ultimately get paid, either because the owner has to remove the lien and pay out the party who filed it, or because the land is sold and the party who filed the lien is paid out of the proceeds of sale.