Contractors and the law

I hope they notice me:

Enforceability of notice provisions in Alberta

It is a common feature of many construction contracts that a years from the date of Substantial Performance. In that case, party wishing to advance a claim must provide notice of its two years had passed since the issuance of the Certificate of intention to do so within a specified period of time or before Substantial Completion, the final certificate for payment had a particular milestone in the progress of a project. However, been issued and no notice had been given, but the owner later depending on when the circumstances giving rise to the claim discovered circumstances for which it wished to claim. Though arose, and the consequence of failing to provide notice, the Althe defendants sought to escape liability on the basis that the berta Limitations Act may render the notice requirement invalid. owner’s claim was contractually barred, Justice Goss ultimately Meeting the deadline to satisfy a notice requirement is not determined the effect of the clause, in the circumstances of that always straightforward. In the heat of the moment, it can be case, was to provide for the reduction of the statutory limitation difficult to recognize if a claim has arisen, what the total magniperiod and was, as a result, invalid. tude of a claim may be, or if giving notice of a claim, with the The determination of the validity of a notice requirement risk of damaging the working relationship, is even worth it. All of will be fact specific. When reviewing a notice requirement in a these considerations can be especially murky when the parties contract, the question simply boils down to whether the Limitaare focused on completing the project. tions Act (Alberta) would allow the plaintiff to sue past the 2014 ABQB 537, Justice Goss of the Alberta Court of Queen’s

Bench reviewed a term similar to that regularly contained within date specified in the contract. If so, the

“When assessing the validity of notice requirements a key contractual provision is likely invalid. However, it is important to keep in distinguishing feature is whether the clause purports to limit mind that not all contractual limitation the time for bringing all claims or only a specific claim.” periods will offend section 7 (2) of the Limitations Act. For example, in NOV Enerflow ULC v. Enerflow Industries Inc., 2015 ABQB 759 the Alberta Court of In Alberta, if a claimant fails to give timely dates on representations and warranties in a Purchase and Sale notice, but later wishes to advance a claim, section Agreement did not violate the Limitations Act, if the expiry 7(2) of the Limitations Act may provide some relief, as that dates applied only to specific representations and warranties section prohibits agreements which purport to shorten a limitaand not all claims that may arise. In that case, the Court found tion period. For responding parties this statutory relief may the expiry date did not preclude bringing a claim entirely, as create uncertainty to terms that they thought were otherwise compared to the waiver and release of all claims in the CCDC clear, unambiguous, and readily understandable. provision.

As an example, certain standard form CCDC contracts Consequently, when assessing the validity of notice requireinclude a term to the effect that five days prior to the expiry of ments a key distinguishing feature is whether the clause the lien period for the place of the work, the claimant waives purports to limit the time for bringing all claims or only a and releases the responding party from all claims except those specific claim. Further, whether a claim is being waived, as claims where, among other things, a notice in writing has opposed to expiring, may also change the outcome. Regardalready been issued. However, in Alberta, if the circumstances less, parties should review their notice obligations carefully that gave rise to the claim arose less than two years before the and remain vigilant as the project progresses. Relying on notice contractual claim deadline, the contractual notice provisions requirements alone may not insulate a party from later claims which purport to bar the claim may not be enforceable. and it is always preferable to keep open communication as

In Wood Buffalo Housing & Development Corp. v. Flett, issues arise.

Queen’s Bench held that imposing expiry

CCDC contracts. The clause in that case included language that Patricia (Trish) Morrison and Theron Davis practice Construction the owner expressly waived and released the contractor from Law at Borden Ladner Gervais LLP. This article is provided for all claims except where a written claim was made prior to the general information only and may not be relied upon as legal date of the final certificate for payment or within a period of 2 advice. Please send comments to editor@on-sitemag.com