Articles 2020

The Companies' Creditors Arrangement Act proceedings involving Carillion Canada and related entities have been an ongoing area of interest for the construction industry since proceedings began in early 2018. Recently, Ernst & Young, (in its capacity as Monitor of Carillion Canada in the CCAA proceeding), brought a motion seeking a declaration that certain funds received in relation to various construction projects were deemed statutory trust funds pursuant to the Construction Lien Act.

A recent decision by Justice Steele in the Ontario Superior Court of Justice has brought some much-needed clarity for road building contractors seeking to uphold (or overturn) an interim-binding decision of a referee under MTO’s dispute resolution procedures.

In December 2020, the Supreme Court of Canada has released a much-anticipated decision on the contractual duty of honest performance, which principle the SCC recognized as a “new” good faith doctrine, formulated in its previous decision Bhasin v. Hyrnew . In Callow, the SCC was divided in its views on the duty of honest performance, with a five-judge panel rendering the majority decision, three judges concurring and one strongly dissenting.

The changes to the Construction Act, including the introduction of prompt payment and adjudication, were designed, in part, to bring construction projects to completion faster and with fewer payment delays. In the construction context, adjudication is the determination of a dispute arising under a contract by an adjudicator who is a qualified person appointed to conduct an investigation and make a quick decision.

The new CCDC 2 updates the standard form contract to catch up with recent prompt payment and adjudication changes in Ontario. It also introduces a number of other changes to both reflect more recent trends in contracting and to otherwise streamline the contract. This article provides a brief summary of some of these changes, with references to the corresponding paragraphs of the CCDC 2.

The impact of the COVID-19 pandemic has provided the impetus for the increased use of technology in many industries – including the construction industry, which has historically been criticized for having productivity problems and being slow to embrace new technology.

Effective January 1, 2021, Ontario Regulation 689/20 substantially amended the Rules of Civil Procedure. In many ways, the changes reflect the reality of litigation in Ontario since the onset of the COVID-19 Pandemic and focus on a technological shift in the nature of litigation, which was both necessary, and needed. Not only do the changes affect litigation under the Construction Act but they will also have an impact on the prompt payment and adjudication provisions therein.

In Chandos Construction v Deloitte Restructuring, the Supreme Court clarified one aspect of bankruptcy law – the scope and application of the anti-deprivation rule – while leaving an unsettled area of contract law – the penalty doctrine – to be resolved for another day. Here, we consider the implications of the newly-clarified anti-deprivation rule as it applies to the construction industry.

Perhaps one silver lining to the COVID-19 Pandemic has been the accelerated implementation of technologically based tools by both the construction industry and the courts to overcome the hurdles arising from the need to maintain “physical distancing’.

On May 11, 2020, the Federal Court of Appeal upheld a sweeping order for Canada’s tax authorities to obtain customer information from Roofmart Ontario Inc. (“Roofmart”) to investigate its customers’ tax compliance.