The Generals - Fall/Winter 2017 - 41

Have a

Whether or not the
communication was
actually a "claim made
in writing" was critical,
because only "claims
made in writing" prior
to project completion
survived the general
waiver of claims that
otherwise applied as
of the date of the final
certificate for payment.

hat constitutes a notice of claim?
Parties to construction lawsuits
often find themselves disputing
whether a particular email or letter
is a valid notice of a claim that complies with the
notice provisions of their contract. While some
contracts spell out exactly how a notice is to
be prepared, sent and addressed, others are
vague or silent on the issue. In light of the recent
decision in Ledore Investments Ltd. v. Ellis-Don
Construction Ltd., 2016 ONSC 5441, parties
should be aware that courts are concerned more
about whether notice was properly given rather
than how it was given.
In Ledore, an arbitrator had concluded that the
contractor's relatively robust notice of claim to a
subcontractor did not satisfy the requirements
of the contract, and the contractor appealed to
the Court. Specifically, the Court was asked to
decide whether the letters sent by Ellis-Don to its
subcontractor, Ross Steel, constituted a "claim
made in writing". Whether or not the communication was actually a "claim made in writing" was
critical, because only "claims made in writing"
prior to project completion survived the general
waiver of claims that otherwise applied as of the
date of the final certificate for payment.
The notice in question was in the form of a
letter. Among other things, the letter referred to
and listed outstanding issues to be resolved,
major factors contributing to site delay and
schedule slippages. There was no dispute that
Ross Steel received the letter nor was there
any dispute that Ellis-Don clearly described
the damages that it believed were Ross Steel's
fault. Despite this, Ross Steel argued that the
notice fell short of being a claim because there
was no demand made against Ross Steel. Ross
Steel focused on the portion of the letter which
stated: "It is our intention to contest the assessment of liquidated damages by the owner and
we will advise you of any further developments
in regards to this matter."
In the initial arbitration decision, the arbitrator looked at the "ordinary meaning" of the wording in the letter and found that Ellis-Don failed to
make a demand, or assert a right while seeking
consequences or relief. In short, the arbitrator
agreed with Ross Steel, and reasoned that EllisDon's letter was merely notice of an intention
to make a claim, and was never quantified or
pursued. In the arbitrator's words, "Intention to
claim is not the same as a claim."
To many in the construction industry, such
a finding is consistent with the commonly-held

belief that a notice of claim (about project delay,
for example) needs to clearly state that a claim
is being made and include the specific amount
being claimed. Many also believe that the claimant is restricted to the claim amount stated in
a notice letter.
In the Ledore appeal, the Court overturned
the arbitrator's decision and instead focused
on whether "notice" was given, as opposed to
whether a demand was made.
Justice Morrissette found that the arbitrator did not apply the key principles regarding
notice that were previously established in Doyle
Construction Co. v. O'Keefe Breweries of Canada
Ltd., 27 BCLR (2d) 89 ("Doyle"). In Doyle, the
BC Court of Appeal found that requirements for
a proper notice will be satisfied where:
* the complaint goes beyond "grumblings" to
display or indicate an "intention to claim";
* the claimant provides some particulars as
to what the complaint is, so that the other
party has an opportunity to consider its position and the possibility of taking corrective
measures; and
* the complaint is timely; e.g. given "in enough
time" to permit the other party to take "guarding measures" if it so desires.
In applying these principles to the Ellis-Don
letter, the Court found that the Ellis-Don letter
clearly laid out unsettled claims made in writing, and should have been enough to satisfy the
contractual provision that would allow it to survive
the waiver of claims. In other words: a contractual
provision requiring claims to be made in writing
should be treated the same way as provisions that
require written notice of claims. The Court found
that the arbitrator had made an error in treating
them as two different types of notices, and in
not properly analyzing whether the necessary
elements for a proper notice were met.
The finding in Ledore represents a good lesson for parties wanting to dispute the validity of
a notice or reject a claim. If a contract provides
that a notice of claim must be made in writing-to allow it to survive a waiver provision, for
example-then any analysis about whether the
notice is valid should focus on its merits, and
less on its form.
■
The information and comments herein are for
the general information of the reader and are not
intended as advice or opinion to be relied upon
in relation to any particular circumstances. For
particular applications of the law to specific situations, the reader should seek professional advice.
Fall/Winter 2017

41



Table of Contents for the Digital Edition of The Generals - Fall/Winter 2017

Chairman’s Message
President’s Message
Incoming Chair’s Message
Government Relations Report
Events
The Construction Lien Act Discussion
The New Construction Act: Coming to a Jobsite Near You
Modernizing the Construction Lien Act – Welcome Changes
Bill 142, Construction Lien Act Amendment – A Construction Owner’s Perspective
Bill 142 – Worth the Wait
Legend: Pertinent Acronyms
The Effect of Adjudication on the Construction and Legal Industries
The Proposed New Construction Act: A Dose of Realism
Employer Did Not Discriminate Against Cocaine Addict Who was Dismissed for Cause
COR Safety Certification: It’s Not just for Large Generals
Recent Decision Confirms that Notices of Claims Do Not have a “Standard Form”
Maple Reinders: After 50 Years, their Passion for Building Keeps Growing … and Growing
OGCA Golf Tournament
Associate Partners Program
Index to Advertisers
The Generals - Fall/Winter 2017 - Intro
The Generals - Fall/Winter 2017 - cover1
The Generals - Fall/Winter 2017 - cover2
The Generals - Fall/Winter 2017 - 3
The Generals - Fall/Winter 2017 - 4
The Generals - Fall/Winter 2017 - 5
The Generals - Fall/Winter 2017 - 6
The Generals - Fall/Winter 2017 - Chairman’s Message
The Generals - Fall/Winter 2017 - 8
The Generals - Fall/Winter 2017 - President’s Message
The Generals - Fall/Winter 2017 - 10
The Generals - Fall/Winter 2017 - Incoming Chair’s Message
The Generals - Fall/Winter 2017 - 12
The Generals - Fall/Winter 2017 - Government Relations Report
The Generals - Fall/Winter 2017 - 14
The Generals - Fall/Winter 2017 - Events
The Generals - Fall/Winter 2017 - The Construction Lien Act Discussion
The Generals - Fall/Winter 2017 - 17
The Generals - Fall/Winter 2017 - 18
The Generals - Fall/Winter 2017 - The New Construction Act: Coming to a Jobsite Near You
The Generals - Fall/Winter 2017 - Modernizing the Construction Lien Act – Welcome Changes
The Generals - Fall/Winter 2017 - 21
The Generals - Fall/Winter 2017 - 22
The Generals - Fall/Winter 2017 - 23
The Generals - Fall/Winter 2017 - Bill 142, Construction Lien Act Amendment – A Construction Owner’s Perspective
The Generals - Fall/Winter 2017 - 25
The Generals - Fall/Winter 2017 - Bill 142 – Worth the Wait
The Generals - Fall/Winter 2017 - 27
The Generals - Fall/Winter 2017 - 28
The Generals - Fall/Winter 2017 - Legend: Pertinent Acronyms
The Generals - Fall/Winter 2017 - The Effect of Adjudication on the Construction and Legal Industries
The Generals - Fall/Winter 2017 - 31
The Generals - Fall/Winter 2017 - The Proposed New Construction Act: A Dose of Realism
The Generals - Fall/Winter 2017 - 33
The Generals - Fall/Winter 2017 - Employer Did Not Discriminate Against Cocaine Addict Who was Dismissed for Cause
The Generals - Fall/Winter 2017 - 35
The Generals - Fall/Winter 2017 - 36
The Generals - Fall/Winter 2017 - COR Safety Certification: It’s Not just for Large Generals
The Generals - Fall/Winter 2017 - 38
The Generals - Fall/Winter 2017 - 39
The Generals - Fall/Winter 2017 - Recent Decision Confirms that Notices of Claims Do Not have a “Standard Form”
The Generals - Fall/Winter 2017 - 41
The Generals - Fall/Winter 2017 - Maple Reinders: After 50 Years, their Passion for Building Keeps Growing … and Growing
The Generals - Fall/Winter 2017 - 43
The Generals - Fall/Winter 2017 - 44
The Generals - Fall/Winter 2017 - 45
The Generals - Fall/Winter 2017 - OGCA Golf Tournament
The Generals - Fall/Winter 2017 - 47
The Generals - Fall/Winter 2017 - Associate Partners Program
The Generals - Fall/Winter 2017 - 49
The Generals - Fall/Winter 2017 - 50
The Generals - Fall/Winter 2017 - 51
The Generals - Fall/Winter 2017 - 52
The Generals - Fall/Winter 2017 - 53
The Generals - Fall/Winter 2017 - Index to Advertisers
The Generals - Fall/Winter 2017 - cover3
The Generals - Fall/Winter 2017 - cover4
The Generals - Fall/Winter 2017 - outsert1
The Generals - Fall/Winter 2017 - outsert2
The Generals - Fall/Winter 2017 - outsert3
The Generals - Fall/Winter 2017 - outsert4
The Generals - Fall/Winter 2017 - outsert5
The Generals - Fall/Winter 2017 - outsert6
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