CONSTRUCTION LAW
The Act states in Section 6 that a claim is discovered
on the day when the claimant first knew
or ought to have known:
(a) the injury, loss, or damage has occurred;
(b) the injury, loss, or damage appears to
have been caused by or contributed to by
an act or omission that is the subject of
the claim;
(c) the acts or omissions appear to be from
the person or entity whom the claim is
made against; and
(d) commencing a claim is an appropriate
way to address the injury, loss or damage.
When a claim is challenged based on a limitation
period, the relevant question is: when
was the claim discoverable? This answer is:
when all four discoverability requirements
from Section 6 of the Act were first present.
In Saskatchewan (Highways and
Infrastructure) v. Venture Construction Inc.,
2020 SKCA 39, the Court of Appeal reviewed
the Act and discussed when the four discoverability
requirements will be satisfied.
What events led
to this case?
In 2010, the Ministry of Highways and
Infrastructure (the “Ministry”) contracted
Venture Construction Inc. (“Venture”) to perform
provincial highway work that required: (i)
preparatory work; (ii) laying down subgrade;
and (iii) surface paving. Venture subcontracted
the preparatory and subgrade work to Johnston
Bros. (Binscarth) Ltd. (“Johnston”). Johnston
began its scope of work in August 2010 and
completed a portion of the preparatory and subgrade
work by December 2010.
In May 2011, when Venture attempted to
begin surface paving, it discovered the subgrade
was not up to standard and required
extensive remediation before surface paving
could commence. The Ministry opined
Johnston had adequately performed the
subgrade work, relying on previous testing
results, and concluded Venture failed to properly
prepare the subgrade work for the winter
and was ultimately responsible for any deterioration
that occurred over the winter.
In July 2011, Venture requested the
Ministry’s testing results on the subgrade
work from 2010. The Ministry did not immediately
respond; however, it did represent
to Venture the subgrade had been adequate
when the testing was completed but became
non-compliant due to excessive winter and
spring runoff.
In December 2012, Venture received unofficial
results from the Ministry’s 2010 subgrade
testing. Venture took the position the
test results demonstrated the Ministry improperly
tested the subgrade work.
By July 2013, Venture had completed the project,
which included remediation of the subgrade
work prior to beginning surface paving.
In December 2013, Venture requested the
Ministry compensate them for expenses incurred
to remediate the subgrade. In January 2014, the
Ministry advised it would review the request and
provide a formal response in the future.
In April 2014, after receiving no response,
Venture commenced a claim against the
Ministry to recover its remediation costs in
the amount of $4,000,000.00. The Ministry
denied Venture’s allegations and brought a
summary judgment application to dismiss the
claim for being statute-barred because the limitation
period had expired.
The Queen’s
Bench decision
According to the Queen’s Bench Chambers
Judge, the limitation period began in July
2013, based on the following accepted facts:
(a) Venture did not know, nor could it have
reasonably known, it suffered a loss until
the work under the contract was completed
in 2013 because an Extra Work
clause in the contract made it reasonable
for Venture to believe it might be compensated
for the remedial work;
(b) It was not until Venture submitted its
claim for payment and the Ministry denied
it, that Venture became aware of the
loss; and
(c) It would not have been appropriate for
Venture to commence its claim in 2011
or 2012 because there were juridical reasons
for delaying the claim, such as:
(i) The possibility the contract provided
a mechanism for Venture to pursue
compensation from the Ministry
for the remedial work before filing a
claim; and
(ii) Commencing the claim in 2011 or
2012 would have brought the project
to a halt, and therefore the public
interest (keeping the highway
open) would not be fostered by filing
a claim until the work under the
contract was completed.
Ultimately, the Ministry’s application for
summary judgement was dismissed (see:
2018 SKQB 293). The Ministry appealed to
the Saskatchewan Court of Appeal.
42 Think BIG | Quarter 3 2020 | saskheavy.ca
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