Notice (Still) Means Notice: Ontario Court of Appeal upholds dismissal of contractor’s claim for failure to provide notice of the claim to the owner as required by the contract

Hot off the presses is Technicore Underground Inc. v. Toronto (City) in which the Ontario Court of Appeal has upheld the lower Court’s decision to dismiss a contractor’s (Clearway) claim against the owner (City of Toronto) as a result of Clearway’s failure to give the City of Toronto notice of its claim within 30 days “…after completion of the work affected by the situation” as was required by the contract between the parties.

Clearway gave the City of Toronto notice for part of its claim within the 30 day period required by the contract but didn’t give notice of another, much larger, component of its desired claim until more than three years later and within the context of the litigation that was commenced following the initial notice was given.  The City of Toronto brought a motion for partial summary judgment to dismiss the portion of Clearway’s claim for which notice had not been given within the required 30 days.  The motions judge granted partial summary judgment and dismissed the bulk of Clearway’s claim (more than $2.1M) for failure to give notice as required by the contract.

On appeal, Clearway argued that:

  • the notice provision was merely procedural and required “failing which” (or my preferred, “or else…”) language to have the drastic effect of permitting the dismissal of the claim;
  • in the absence of prejudice to the City of Toronto arising from the failure to give notice, the failure to give notice should not be fatal;
  • the City of Toronto’s own failure to comply with a different provision of the contract should disentitle it from relying on the notice provision;
  • portions of the claims for which no/late notice was given were really just extensions of the parts of the claim for which notice was given; and
  • the City of Toronto waived its right to rely on the notice provision.

The Court of Appeal rejected all of Clearway’s arguments and dismissed the appeal.  In so doing, the Court relied heavily on the Supreme Court of Canada Decision in Corpex (1977) Inc. v. The Queen in right of Canada (and the BC and Ontario Decisions in Doyle Construction Co. v. Carling O’Keefe Breweries of Canada Ltd. and Bemar Construction (Ontario) Inc. v. Mississauga (City of)).  I’m not going to repeat or summarize the Court’s reasoning but, if you are so inclined, it is worth the 15-20 minute read.

For contractors and owners, the primary take-away from this Decision is the reminder of how critical it is to know what is in your contract, understand what is required in various situations, and if the contract requires that you do something – to do it!  The consequences of failing to follow the requirements of your contract are not always this dramatic (and sometimes there will be some fact or event that can relieve you from a failure to comply) but why take the chance?

For fellow lawyers, aside from the substantive utility and importance of this Decision, I think we can all take note of the increasingly obvious reality that one of the most effective, appropriate, and useful applications of the new Rule 20 regime for summary judgment motions is the early and inexpensive resolution of claims that can be determined on the basis of the interpretation of contractual provisions (and their application to uncontroversial facts).