Compliance with notice requirements critical in construction contracts with government owners

9 décembre 2021 | Michael McCluskey, Sabrina Lau

( Disponible en anglais seulement )

As previously discussed in our 2019 Article “Notice requirements in construction”,[1] the Canadian courts tend to favour strict compliance and interpretation of notice provisions in construction contracts, especially when they are clear and unambiguous. These requirements remain consistent and have been recently reaffirmed in two recent decisions relating to construction contracts with government owners.

Recent Ontario Case Law Reaffirm the Importance of Compliance with Notice Requirements

In the 2021 Ontario Superior Court of Justice case Elite Construction Inc. v Canada,[2] the contractor, Elite Construction Inc., did not strictly comply with the contractual notice provisions for requests for extensions of time. Specifically, the multiple notices provided by the contractor contained various deficiencies. For example, one of the notices failed to include the required written consent of the bonding corporation and another was submitted after the timeframe stipulated in the construction contract. The Court pointed to a long list of Canadian case law reiterating the importance of compliance with notice provisions and ultimately, did not accept Elite Construction Inc.’s various attempts to deliver notice, as they did not strictly comply with the provisions agreed to in the contract.[3] Similarly, in the 2021 Ontario Divisional Court case Tower Restoration v Attorney General of Canada[4], the Court found that the contractor was barred from bringing the claim against the Government of Canada because they failed to deliver notice to dispute a final decision in the time frame established by the dispute resolution provisions in the contract.[5]

The Supreme Court of Canada and other appellate courts have taken a unified stance with respect to notice requirements. The Courts continue to be reluctant to allow non-compliance with notice provisions in construction contracts since this would be in direct conflict with the overarching policy objective of providing the other party sufficient opportunity to consider its options and take corrective action prior to a contractor pursing a claim against them.[6] Furthermore, the Courts seem to be unsympathetic to sophisticated commercial parties bringing an action after failing to provide notice in compliance with the applicable construction contract. Strict compliance is especially applicable to government construction contracts, as these often involve a competitive bidding and selection process, use of public funds, and are contracts of adhesion.[7]

Moving Forward

Given the consistent trend in the case law pertaining to notice requirements in construction contracts, compliance with notice provisions is typically seen as a condition precedent to maintaining a claim in the courts.[8] Thus, it is best practice for contractors to ensure that they strictly adhere to the notice provisions in the general contract to protect their rights under the contract. Our Miller Thomson Construction Law Team is here to assist in drafting, negotiation, and litigation construction contracts and notice provision compliance.

[1] Notice requirements in construction contracts, December 12, 2019 by Nick Willis – Miller Thomson LLP

[2] Elite Construction Inc v Canada, 2021 ONSC 562 (Ont Sup Ct)

[3] Elite at para 65.

[4]Tower Restoration v Attorney General of Canada, 2021 ONSC 3063 (Ont Div Ct)

[5] Tower at para 24.

[6] Tower at para 24-25.

[7] Tower  at para 26.

[8] Elite at para 67.

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