Concurrent Delay:

A Modest ProposalR.B. Reynolds and S.G. Revay

The Revay ReportVolume 20 Published by Construction ConsultantsNumber 2 Revay and Associates andJune 2001 Limited Claims Specialists

The readers of theRevay Report, inresponding to a recentsurvey, selected delayanalysis as theirnumber one interest.We have discusseddelay analysis in pastissues more than once,last time in Number 2of Volume 13 (June

1994). Nevertheless the request isunderstandable considering the rapidevolution of available techniques and moreimportantly the judicial treatment of thistopic. No wonder there is no generallyaccepted technique today. It has often beensaid that delay analysis is an art and not ascience. If this statement is true of delayanalysis in general, then it is doubly so withrespect to concurrent delay analysis. In thisarticle we are trying to chart a possiblecourse for future development.

Bruce Reynolds, the co-author of this article,for those of you who may not know him, ishead of the Construction and SuretyProfessional Group for the national law firmof Borden Ladner Gervais LLP. He is listed inthe Canadian Legal Lexpert Directory 2000as one of the “most frequently recommended”construction litigators in Toronto. He is theco-author of Scott and Reynolds on SuretyBonds, and is the author of many papers andarticles on construction and surety law. He isPast Chair and Legislative Co-ordinator ofthe Construction Law Section of theCanadian Bar Association (Ontario) and is aFounding Governor and Past Treasurer(1999-2000) of the Canadian College ofConstruction Lawyers. His practice area forthe past 18 years (called to the Ontario Barin 1983) has been construction and suretybond law, including construction claims andconstruction insurance claims.

Mr. Reynolds would like to thank hiscolleagues Sharon Vogel and Dan Boan fortheir assistance with this paper.

S.G. Revay

1. INTRODUCTION

Concurrent delay is experienced on a pro-ject when two or more separate delayevents occur during the same time periodand each, independently, affects the com-pletion date. Delays may occur as a resultof the actions, or inaction, on the part ofthe owner, the contractor, subcontractors,or the designer, and when delays do occurclaims for both extra time and additionalcompensation arise. Not infrequentlysuch claims are resisted based upon alle-gations of concurrent delay, either a con-current delay by the claimant or aconcurrent delay by another project par-ticipant, which arguably deprives theclaimant of the ability to establish causa-tion.

Most of the literature dealing with concur-rent delay comes from the United Statesand the majority of it is based on judg-ments in the area of federal contracting.Generally, viewed from the perspective ofthe owner-general contractor relationship,the following principles can be derivedfrom the U.S. caselaw:

• if an excusable (e.g. a force majeureevent) or a compensable delay occursconcurrently with a non-excusabledelay, the delay is treated as excusable;

• if an excusable delay occurs concur-rently with a compensable delay, thedelay will be treated as excusable butnon-compensable.

Normally, non-excusable delay arises as aresult of an event within the contractor’scontrol. Examples of non-excusable delaysinclude late performance by subcontrac-tors, untimely performance by suppliers,

faulty workmanship, strikes caused by thecontractor, etc. (see: T.J. Trauner, Construc-tion Delays (Kingston, MA: R.S. MeansCompany, Inc., 1990) at p. 4).

Recent U.S. caselaw continues to demon-strate an emphasis on the critical pathanalysis approach to treatment of delay.(See, for example, Williams EnterprisesInc. v. Strait Manufacturing and WeldingInc., 728 F. Supp. 12 (D.D.C. 1990); Wilnerv. United States, 23 Cl. Ct. 241 (1991); PCLConstruction Services Inc. v. UnitedStates, 47 Fed. Cl. 745 (2000).) Thismethod, of course, provides fertileground for the assertion of concurrentdelay defences.

To understand the underlying rationalefor the principles derived from U.S.caselaw, it is important to recognize that,as noted above, the defence of concurrentdelay arises where the claimant which iscontending that certain actions or omis-sions on the part of the defendant gaverise to compensable delay, is met witheither the argument that the claimantitself is responsible for either an excus-able or non-excusable concurrent delay,or the argument that another partyinvolved in the project was involved in anexcusable or non-excusable concurrentdelay. In essence, the defendant takes theposition that, although it (i.e. the defen-dant) may have delayed completion of theproject, the fact that there was a concur-rent delay elsewhere on the project,affecting the critical path, means that theclaimant would have suffered the samedamages even if the defendant had notdelayed the project, and that, therefore,the claimant cannot prove that the defen-dant caused its damages.

R.B. ReynoldsS.G. Revay

The inequitable aspect of the concurrentdelay defence is that, where accepted, itresults in a wrongdoer avoiding the con-sequences of its acts. In the paradigm sit-uation, an innocent claimant can be metwith two or more wrongdoers arguingthat the claimant must bear its own lossdue to its inability to establish that anyone of the defendants was the proximatecause of the claimant’s damage. Interest-ingly, although the defence of concurrentdelay is widely used by the leading claimsconsultants in Canada, the Canadianjurisprudence dealing with constructiondisputes provides no direct assistance inrespect of how to address this significantdefence.

Importantly, the general concept of con-current delay has been recognized byCanadian courts. For example, in Conti-nental Breweries Inc. v. 707517 OntarioLtd. (C.O.B. Northern Algonquin BrewingCo.), [1993] O.J. No. 2395 (Ont. Ct. (Gen.Div.)) Northern, as owner, entered into anagreement with Continental BreweriesInc. (“CBI”), as contractor, to construct abrewing facility. The completion of thebrewery was delayed and the facility didnot “come on stream with a completedbrewing facility” for one year past thecompletion date contemplated in the orig-inal agreement. As a result, CBI com-menced an action against Northern torecover for work and materials suppliedand for delay. Northern counterclaimedfor lost profits as a result of the delay.After assessing all the evidence in respectof the delay, Davidson J. found that CBIbore primary responsibility for the delay,in that the initial schedules drawn up werenever met because of its use of inade-quate forces, lack of detailed drawings,late ordering of material, general lack ofexperience in projects of that magnitudeand complexity, cash flow problems, andinability to organize the fundamentalinstallation of the necessary connectedand interdependent elements of the pro-ject. Justice Davidson also found thatNorthern was partly responsible for thedelay, since it requested changes forlabelling design, obtaining sufficientlabelling information, and changed filterswhich, in turn, delayed CBI. In thisrespect, Davidson J. found that, to a limit-ed degree, the delay was attributable toNorthern; however, the totality of thedelay attributable to Northern was only 12weeks since a delay of twelve weeks wasdue to the labelling design and gettingsufficient label design information and thechanged filter caused an additional sixweek delay, but that it was concurrentwith the 12 week delay of the labelchange. Therefore, Davidson J. attributed80% of the delay to CBI and 20% to North-ern. Justice Davidson also allowed North-ern’s counterclaim for lost profit but

reduced this amount by 20% to representthe amount of delay which was attribut-able to Northern.

Also, in Foundation Co. of Canada v. Unit-ed Grain Growers Ltd. (1996), 25 C.L.R.(2d) 1 (B.C.S.C.), var’d (1997), 33 C.L.R.(2d) 159 (C.A.), United Grain Growers Ltd.(“United Grain Growers”) entered into acontract with Foundation Co. of Canada(“Foundation Co.”) for a renovation of itsgrain terminal. CWMM was United GrainGrowers’s engineer. Foundation Co. sub-contracted the sheet metal work toCrosstown Metal Industries Ltd.(“Crosstown Metal”). The constructionwas delayed. Foundation Co. sued UnitedGrain Growers and CWMM for damagesfor breach of contract and negligent mis-representation and advanced a claim forextras. Crosstown Metal sued FoundationCo. for damages for breach of contract,however, most of these claims were refer-able to the acts and omissions of UnitedGrain Growers and CWMM, from whichFoundation Co. claimed contribution andindemnity. United Grain Growers counter-claimed against Foundation Co. for eco-nomic losses caused by Foundation Co.’sdelay. At trial, Brenner J. considered eachportion of the project which the partiesalleged resulted in delay and found thatFoundation Co. was delayed by the actsand omissions of United Grain Growersand/or CWMM for a period of threemonths past completion. Justice Brenneralso found that Foundation Co. estab-lished that there were other delays whichwere the responsibility of United GrainGrowers and/or CWMM which likelydelayed Foundation Co., but that thesedelays were concurrent, and thereforewould not extend the 3-month entitle-ment of Foundation Co. With respect toCrosstown Metal, Brenner J. found thatFoundation Co. contributed to the delaysexperienced by Crosstown Metal. Thus, inassessing the extent to which CrosstownMetal was entitled to indemnity, BrennerJ., apportioned responsibility for thedelays for which Crosstown Metal wasentitled to compensation at 75% forCWMM and United Grain Growers and25% for Foundation Co.

The lack of a definitive approach to thedefence of concurrent delay in the Cana-dian jurisprudence on construction lawrepresents a troublesome conundrum.Justice Wallace, in his decision on amotion for judgment, in Pacific CoastConstruction Co. Ltd. v. Greater Vancou-ver Regional Hospital District (1986), 23C.L.R. 35 (B.C. S.C.), highlighted the con-text within which the concurrency debatenormally arises when he stated, in part:

I find that the contractor is entitled toclaim the delay costs incurred by it asa result of the three week owner-

caused delay. However, the calcula-tion of such impact costs is a verycomplex exercise and can only beaccomplished, if at all, at a trial of theissue. Evidence is before me of thetime within which a reasonable con-tractor could complete the contract,and this is compared to the actualcompletion time. To reach any properconclusion as to the costs from thedelay one would be required toanalyse the contractor’s progress anddetermine to what extent the differ-ent causative factors, such as con-tractor-caused delays, unavoidabledelays and owner-caused delay con-tributed to the overall delay experi-enced by the contractor. It would alsobe necessary to evaluate the validityof the contractor’s original contractschedule and the “reasonable con-tractor” schedule.

However, Wallace J. did not undertake theanalysis described above, because he wasof the view that such an exercise couldnot be undertaken on a motion for judg-ment. Unfortunately, there is a dearth ofCanadian caselaw which directly grappleswith the issue of the defence of concur-rent delay in terms of conducting the kindof analysis described by Wallace J. anddetermining the resulting apportionmentof responsibility for concurrent delay.

In order to appreciate the context withinwhich expert claims consultants analysethe issues of concurrent delay, it is usefulto consider the various analyticalapproaches available.

2. ANALYTICAL APPROACHES TO

SOLVING THE CONCURRENCY

DILEMMA

From the claims consultant’s perspective,there is a number of analytical approach-es available to establish the basis for adelay claim.

i.The Snapshot Method

In complex claims, simplifying considera-tions must be adopted by dividing theproject into windows of time, where eachwindow must be analyzed independently.

Scheduling is a dynamic process. For aschedule to be meaningful and acceptablefor valid delay analysis it must be keptcurrent and must reflect both the delaysor gains as they occur and the then gov-erning planning (e.g. sequencing andresource loading) of the contractor [seeFortec Constructors v. U.S. 760 F.2d 1268(Fed. Cir. 1985)]. Schedules which are notkept current (i.e. periodically updated tofaithfully reflect the actual status of theproject at various intervals) are not con-sidered a valid medium for delay analysis.

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Because the snapshot analysis focuses onspecific periods of the project and alwaysmeasures gains or delays against the thencurrent critical path, it is considered asuperior technique for the purposeintended, assuming of course that thewindow periods selected are of sufficient-ly short duration to properly capture anysignificant shifting of the critical path andthat the progress at the end of the periodrepresents real progress as opposed todesired (i.e. invalid) progress.

The word “snapshot” describing this tech-nique underscores the need for relyingonly on factual as opposed to fictionaldata.

The schedule run at the end of the win-dow period (i.e. the snapshot schedule)must therefore give effect to the actualprogress achieved as well as to the delays(extended activity duration) and gains(reduction in the activity duration) experi-enced by the project during the windowperiod. Based on these revisions to activ-ity duration and the progress actuallyachieved, the revised project completiondate is recalculated applying the originalplanning (i.e. the logic used for the sched-ule in force at the beginning of the win-dow period) to the part of the schedulecovering the work to be performedbeyond the end of the window period,including the unprogressed activities orthe remaining portions of those activitieswhich have been partially progressed dur-ing the window period.

The completion date projected by thissnapshot schedule, if compared to thecompletion date projected by the unpro-gressed schedule (the schedule asplanned at the beginning of the windowperiod), indicates the overall delays orgains resulting from the achievedprogress or lack thereof.

Although the snapshot schedule is, attimes, used as the as-planned schedulefor the next window period, more oftenthan not the schedule is revised by chang-ing the sequencing of activities or intro-ducing other accelerating measures,thereby probably shifting the critical path.Most of the time the projected completiondate of this “revised” or “updated” sched-ule is different (usually brought back)from that of the snapshot schedule.Because of the acceleration which mighthave been introduced by subsequentupdates, the measure of the total project,which has to be determined to assess res-ponsibility for the causes giving rise todelays and/or to determine the degree ofentitlement to acceleration cost, is thecumulative total of the delays or gainsdetermined for each snapshot. Allocationof liability for the delays will, of course,have to be carried out independently for

each window. (This determination can bebased on common sense, the “dominantcause” or “collapsed as–built schedule”analysis, as described hereinafter.)

Perhaps the most authoritative opinion onthe snapshot method was rendered by theArmed Services Board of ContractAppeals, in Gulf Contracting, Inc., ASBCANos. 195, et al., 89-Z BCA (explained inNumber 2, Volume 13 of The RevayReport).

ii.The Dominant Cause Approach

The line of reasoning used by the court inWilliams, supra, is very similar to theprinciple favoured by the English courts,where it is called the “dominant causeapproach”. According to this approach theplaintiff may recover its damages if it canestablish that the delay for which thedefendant must assume responsibility isthe overriding or the “dominant” cause ofthe loss suffered. Which cause is domi-nant is a question of fact which is notsolved by mere order of occurrence, but isto be decided by applying common sensestandards. For example, if progress on asection of the work was suspended on aMonday because an essential piece ofequipment supplied by the owner wouldnot arrive for another ten days, then with-out other delays it is safe to assume thatthe cost of the suspension should be paidto the contractor by the owner. Now, if onWednesday a heavy rain storm causedflooding, thereby preventing work on theentire site for a number of days, is thecontractor still entitled to compensationfor all of its damages? Pursuant to the“dominant cause approach” it would beentitled to all of its extended durationcosts relating to the section of work sus-pended, but not to the cost resulting fromthe flooding to the other parts of the work.

There is a long line of English decisionswhich follow the dominant causeapproach, starting with Leyland ShippingCo. Ltd. v. Norwich Union Fire InsuranceSociety Ltd., [1918] A.C. 350 (H.L.) andcontinuing through Galoo Limited v.Bright Grahame Murray, [1995] 1 All E.R.16 (C.A.). All of these English cases andarguably also the Williams case representrelatively straightforward problems suit-able for “common sense” determination.Unfortunately, this is not always the case.On projects that sustain multiple overlap-ping changes or delays with long dura-tions (including concurrent delays) , asmay be the case, for example, on manyprocess or power plants, neither the dom-inant cause approach nor other commonsense approaches may suffice because ofall the assumptions that must be maderegarding remaining durations of activi-ties being affected not even taking into

account the possible relocation of the crit-ical path.

iii. Collapsed As-Built Schedule

Method

The collapsed as-built schedule method,also known as the “but for” method, has,in recent years, been gaining consider-able popularity primarily because of itssimplicity. Under this method one takesthe as-built schedule, identifies the impactof delays caused by one or moreparty(ies) (usually the defendant(s)), andthen removes those impacts from the as-built schedule. The remaining durationallegedly represents the schedule withinwhich the claimant could have completedthe project “but for” the faults (acts oromissions) of the defendant. Althoughthis apparent simplicity carries inherentdangers with it (i.e. the method can beabused easily), it may nevertheless pro-vide a vehicle for the application of con-tributory negligence principles to delayanalysis, as discussed below.

3.THE GENERAL CANADIAN RULE

OF ASSESSING DAMAGES

In considering the legitimacy of and thetreatment to be accorded to the defenceof concurrent delay from a Canadian per-spective, it is also useful to review thelegal context within which such a defencefunctions, i.e. as a bar to the recovery ofdamages. Generally, Canadian courtshave adopted the principle that where acourt determines that the plaintiff has suf-fered a loss the court must do “the best itcan” to ascertain its damages.

In this respect, S.M. Waddams inThe Lawof Damages, looseleaf ed. (Toronto: Cana-da Law Book Inc., 1942+) writes, at 13.10to 13.30, as follows:

The general burden of proof liesupon the plaintiff to establish thecase and to prove the loss for whichcompensation is claimed. In manycases the loss claimed by the plaintiffdepends on uncertainties; these areof two kinds: first, imperfect knowl-edge of facts that could theoreticallybe known and secondly, the uncer-tainty of attempting to estimate theposition of the plaintiff would haveoccupied in hypothetical circum-stances, that is to say, supposing thatthe wrong complained of had notbeen done.

American law has had considerabledifficulty with this second type ofuncertainty. The courts have used therequirement of certainty to inhibit orset aside what they consider to beexcessive jury awards, with rigorousstandards laid down in many cases.

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The consequence that, where recov-ery is thought to be justified, thecourts must strive to reconcile theresults desired with prior restrictiveholdings.

In Anglo-Canadian law, on the otherhand, perhaps because of the declinein use of the jury, the courts haveconsistently held that if the plaintiffestablishes that a loss has probablybeen suffered, the difficulty of deter-mining the amount of it can neverexcuse the wrongdoer from payingdamages. If the amount is difficult toestimate, the tribunal must simply doits best on the material available,though of course if the plaintiff hasnot adduced enough evidence thatmight have been expected to beadduced if the claim were sound, theomission will tell against the plaintiff.In Ratcliffe v. Evans, Bowen L.J. said:

As much certainty and particular-ity must be insisted on, both inpleading and proof of damage,as is reasonable, having regardto the circumstances and to thenature of the acts themselves bywhich the damage is done. Toinsist upon less would be torelax old and intelligible princi-ples. To insist upon more wouldbe the vainest pedantry.

This principle was applied by theSupreme Court of Canada in Wood v.Grand Valley R. Co. (1915), 51 S.C.R. 283.In Wood the Supreme Court of Canada,referring to the decision of Chaplin v.Hicks, [1911] 2 K.B. 786, stated, at page289, as follows:

It was clearly impossible under thefacts of that case to estimate withanything approaching to mathemati-cal accuracy the damages sustainedby the plaintiffs, but it seems to me tobe clearly laid down there by thelearned judges that such an impossi-bility can not “relieve the wrongdoerof the necessity of paying damagesfor his breach of contract” and thaton the other hand the tribunal to esti-mate them whether jury or judgemust under such circumstances do“the best it can” and its conclusionwill not be set aside even if theamount of the verdict is a matter ofguess work. [Emphasis added].

This issue was again considered by theSupreme Court of Canada in PenvidicContracting Co. v. International Nickel Co.of Canada, [1976] 1 S.C.R. 267. There, Pen-vidic entered into a contract with Interna-tional Nickel to lay track and do the topballasting on a railroad constructed byInternational Nickel. International Nickeldid not complete its preliminary work of

preparing the site by providing a railwayconnection. Penvidic had to revise itsmethod of construction, and as a result,suffered increased expenses and delay.The evidence proved that InternationalNickel breached its contract with Penvidicand that damages resulted. Penvidic esti-mated its damages by leading evidenceas to the costs of the extra ballasting onan additional sum-per-ton basis ratherthan by ascertaining items of expensefrom its records. The trial judge adoptedthis method to assess damages. Onappeal, the Supreme Court of Canadacited the decision of Wood v. Grand ValleyRailway Company, supra, for the proposi-tion that the court must do “the best itcan” to ascertain the damages and foundthat under the circumstances, the plaintiffwas entitled to the damages which thetrial judge properly assessed.

Another example of the court doing “thebest it can” is found in the decision of Pot-ter Station Power Co. v. Inco Ltd. (1998),43 C.L.R. (2d) 53 (Ont. Ct. (Gen. Div.)).Bluebird Construction (Potter Station wasthe successor of Bluebird Construction)entered into a contract with Inco. Duringthe course of Bluebird’s contract a num-ber of problems arose, including interfer-ence and delay. As a result, Bluebirdclaimed against Inco for damages, includ-ing, impact costs, head officeoverhead/administration, and loss of pro-ductivity. In assessing Bluebird’s impactand loss of productivity costs, RosenbergJ., wrote, at page 61, as follows:

I find that with the number of prob-lems involved it would be impossibleto calculate the impact and loss ofproductivity attributable to eachproblem. When a part is delayed theimpact and loss of productivity can-not be determined. The best that canbe done is to estimate the totalimpact of all of the problems andextras on productivity and efficiency.

Justice Rosenberg further wrote, at page65, as follows:

Inco took the position that for eachFWI claimed there should be includedthe amount for loss of productivityand impact. This may be appropriate ifthere were a few changes and delaysin the contract, but with hundreds ofsuch changes there is no practical wayto so allocate. If a piece of equipmentis originally due June 1st and thenInco advises that it is now expectedJune 15th and later advises that it isexpected July 1st and so on from timeto time, it is not possible for Bluebirdto say, when there are hundreds ofsuch incidents, that this particular inci-dent caused us X dollars as a result ofthe impact and loss of productivity.

The only practical way of measuringthe overall impact and loss of produc-tivity is in the way that Ms. Tardif hasdone, and that is to attribute the extrahours spent beyond those estimated(subject to proof that the estimates arereasonable) to loss of productivity andimpact.

Rosenberg J. held, at page 71, that:“although it cannot be precisely mea-sured, the best estimate that I can make isthat Inco is not responsible for 40% of thedelay in the project because of the latestart, strikes, etc.”

Applying the authorities set out above tothe problem of concurrent delay, an argu-ment may be advanced that, in caseswhere it is difficult to assess damages,including issues of concurrency, if theplaintiff proves that the defendant is awrongdoer and materially contributed tothe delay and the plaintiff suffered dam-ages, the court is obligated to do “the bestit can” to assess these damages. Ofcourse, it must be recognized that thedecisions cited above do not deal specifi-cally with the issue of concurrent delay,yet one is left with the sense that, in rela-tively complex fact situations, whereissues of concurrency were likely involvedto some degree, Canadian courts havetended to allocate responsibility on abroad brush approach.

4. APPORTIONMENT OF LIABILITY

The concept of apportionment of liabilitymay provide a more direct approach toaddress the concurrent delay defence.

One tool for allocating the responsibility for delay which is available to the courtsof certain of the common law provinces iscontained in legislation addressing theapportionment of liability in negligence.

Legislation establishing joint and severalliability amongst multiple tortfeasors andallowing apportionment of liability in neg-ligence has been introduced in all of theCanadian common law jurisdictions (see:Negligence Act, R.S.O. 1990, c. N-1; Con-tributory Negligence Act, R.S.N.B. 1973, c.C-19; Contributory Negligence Act, R.S.Y.1986, c.32; The Tortfeasors and Contribu-tory Negligence Act, R.S.M. 1987 c. T90;Negligence Act, R.S.B.C. 1996, c.333; Con-tributory Negligence Act, R.S.A. 1970, c. C-23; Contributory Negligence Act, R.S.N.1990, c. C-33; Contributory NegligenceAct, R.S.N.W.T. 1988, c. C-18; ContributoryNegligence Act, R.S.N.W.T. 1988, c. C-18,as duplicated by the Nunavut Act, S.C.1993, c. 28, as amended; ContributoryNegligence Act, R.S.N.S. 1989, c.95 andthe Tortfeasors Act, R.S.N.S. 1989, c. 471;Contributory Negligence Act, R.S.P.E.I.1988, c. C-1; and The Contributory Negli-gence Act, R.S.S. 1978, c. C-31). This legis-

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lation allows the courts to apportion lia-bility between plaintiffs which are contrib-utories and tortfeasors, as well asbetween joint tortfeasors (which remainjointly and severally liable to the plaintiffdespite any apportionment of liability asbetween them by the court). (Such legisla-tion is hereinafter referred to as “contrib-utory negligence legislation”.)

Pitch and Snyder point out that “notwith-standing the similarity of this legislation,its application by the courts to contractactions has varied from province toprovince”: see H.D. Pitch & R.M. Snyder,Damages for Breach of Contract, 2nd ed.(looseleaf) (Toronto: Carswell, 1989+), at9§3(b). The technical restriction on theapplication of this legislation to negli-gence still exists in Alberta, Manitoba,New Brunswick, Newfoundland, Ontario,Prince Edward Island and Saskatchewan.On the other hand, the courts of BritishColumbia and Nova Scotia have relied onnegligence legislation in respect of con-tract claims (see: Pitch & Snyder, Dam-ages for Breach of Contract, supra, at9§3(b)(i) to (viii)). However, given the gen-eral approach of Canadian common lawcourts to the application of the principlescontained in contributory negligence leg-islation to contractual situations, the dis-tinction as to the direct applicability of thelegislation is of diminished significance.

For example, with relation to apportion-ment between a claimant and a defendantin contract, in the New Brunswick Court ofAppeal case of Coopers & Lybrand v. H.E.Kane Agencies Ltd. (1985), 17 D.L.R. (4TH)695, Coopers, an accountancy firm, wasKane’s auditor and conducted an annualaudit of Kane. In its action, Kane allegedthat Coopers failed to exercise reasonablecare, skill, and competence, or alterna-tively, that it was negligent in the perfor-mance of its duties to Kane since Coopersfailed to detect a system that CharlesKane, the principal of Kane, devised whichresulted in excessive credit being extend-ed to one of Kane’s customers. The cus-tomer subsequently went intoreceivership and Kane was unable torecover part of its debt. The Court ofAppeal agreed with the trial court thatCoopers did not meet the standard of careand skill called for in the circumstances.The Court of Appeal also found that thebad business judgment of Charles Kanewas a proximate cause of Kane’s loss,however, this conclusion did not provideCoopers with a complete defence. Withrespect to apportionment, Stratton, J.A.delivering the judgment of the court,found, at page 708, as follows:

… I am satisfied that the duty ofCoopers & Lybrand arose from theircontract of engagement. Whetherone accepts the argument that at

common law damages could beapportioned in actions in contract aswell as in actions of tort and that theContributory Negligence Act,R.S.N.B. 1973, c. C-19, should beapplied by analogy, or adopts the the-ory of the reasonable expectations ofthe parties, or the notion of reliancethat was either qualified or unreason-able, or simply that in fairness and todo justice the damages ought to beapportioned, I do not think that in thecircumstances of this case the trialjudge erred in concluding that theactions of the company president,Harold Kane, and of Charles Kane, itsemployee, contributed to the compa-ny’s loss. Nor am I able to say that theapportionment of the degrees of faultof each party is wrong.

Also, see Doiron v. Caisse Populaire D’Ink-derman Ltee. (1985), 17 D.L.R. (4th) 660(N.B. C.A.) for an excellent considerationof this entire area of the law by Justice LaForest.

The problem of apportionment between aclaimant and a defendant in contract wasalso addressed in Tompkins Hardware Ltd.v. North Western Flying Services Ltd. et al.(1982), 139 D.L.R. (3d) 329 (Ont. H.C.J.).There, the plaintiff took its aircraft to thedefendant for maintenance and change-over from floats to skis. The existing shockcords were replaced with new cords. Anaeronautical engineer employed by thedefendant inspected the work and certi-fied the aircraft as airworthy. After pickingup the aircraft from the defendant, theplaintiff’s pilot took off for his camp. Heencountered problems controlling the air-craft and made his own temporary repairsby attaching “tie downs” to the landinggear. During a flight the next day the pilotwas forced to make an emergency land-ing which resulted in extensive damage tothe aircraft. The plaintiff sued the defen-dant in both contract and tort. JusticeSaunders found that the defendant failedto perform its obligations to the plaintiff ina workmanlike manner and also that thepilot was negligent since it was unreason-able for him not to have left the aircraftwith the defendant after the first incidentwhen he encountered problems control-ling the aircraft. The plaintiff argued thateven if its pilot was negligent, such negli-gence did not reduce the defendant’s lia-bility in contract. In this respect, SaundersJ. found, at pages 340-341, as follows:

The principle that where a man is partauthor of his own injury he cannotcall upon the other party to compen-sate him in full, has long been recog-nized as applying in cases of tort: seeNance v. B.C. Electric R. Co., [1951] 3D.L.R. 705 at p. 711, [1951] A.C. 601 atp. 611, 2 W.W.R. (N.S.) 665. I see no

reason why it should not equally beapplicable in cases of contract. …Mosbeck [the pilot], by negligentlytaking the aircraft up, created the sit-uation where the damage occurredbecause of the inadequate shockcords installed by the defendant. Insuch circumstances, there should, inmy opinion, be apportionmentwhether the action be brought in con-tract or in tort.

In apportioning, Saunders J. did not holdthat the Negligence Act applied but ratherthat “the principles set out in s. 2 of theNegligence Act seem appropriate to applyto a claim in contract even though thestatute itself does not apply” (page 341).

The decision of Saunders J. in Tompkinswas followed by Grange J. in Ribic v.Weinstein (1982), 140 D.L.R. (3d) 258 (Ont.H.C.J.). Also, in Cosyns v. Smith et al.(1983), 41 O.R. (2d) 488 (C.A.), the Court ofAppeal, in obiter, commented on the rea-soning of Saunders J. in Tompkins andadopted by Grange J. in Ribic as follows:

I am satisfied that, in the presentcase, the duty of the defendantsarose from the contract. It is not nec-essary to decide whether a duty alsoarose under the law of torts. In anyevent, I do not think that it is neces-sary for this court to pronounce onthe attractive conclusion reached bySaunders J. and adopted by GrangeJ. I say this because of the conclusionwhich I have reached on the secondissue, i.e., the legal validity of thefinding of contributory negligencemade against the plaintiff in this case.[The Court of Appeal found that theplaintiff was not negligent].

Similarly, in Wells Construction Ltd. v.Thomas Fuller Construction Company(1958) Ltd. (1986), 22 C.L.R. 144 (Nfld. S.C.)Thomas Fuller contracted with HerMajesty in the Right of Canada for theconstruction of buildings. In turn, ThomasFuller subcontracted the excavation andbackfill, rock removal, clearing and grub-bing, site grading, and some drilling toWells. Wells began to experience financialdifficulties which it attributed to the lack ofpayment of invoices rendered to ThomasFuller for work completed. As a result,Wells withdrew its workers and informedThomas Fuller that it would return to thesite, but only after its progress invoiceswere paid. The issues were not resolvedand Thomas Fuller completed the workunder the subcontract. Wells commencedan action to recover from Thomas Fullerand the bonding company the balancedue for labour, materials, equipment, andservices rendered under the subcontract.Thomas Fuller counterclaimed. Part ofThomas Fuller’s counterclaim was based

5

on the damages suffered as a result ofhaving to complete the backfill work,which Wells argued should be appor-tioned. With respect to this portion of thecounterclaim, Woolridge J. agreed withthe decision of Saunders J. of TompkinsHardwood, supra, holding that the princi-ples set out in Section 2 of The Contribu-tory Negligence Act, R.S.N. 1970, c.61 areappropriate to apply to a claim in contract.As a result, Woolridge J. found thatThomas Fuller was 80% liable, and Wells20% liable, for the costs of the backfill.

Also, in Convert-A-Wall Ltd. v. BramptonHydro-Electric Commission (1988), 65 O.R.(2d) 385 (Div. Ct.), Convert-A-Wall (the“Contractor”) contracted with Bramptonfor the construction of additions and mod-ifications to offices and warehouse prop-erty of Brampton. There were delays in theprogress of the work which the Contractorattributed to Brampton and Brampton’sarchitect (the “Architect”). As a result, thework was behind schedule. Liens werealso registered and the amounts claimedwere held back by Brampton. The Contrac-tor began to experience a cash-flow prob-lem and Brampton continued to hold backthe amount of the claims for lien of whichit had notice. The situation steadily deteri-orated until Brampton terminated the con-tract. The court found that the only defaultby the Contractor was failure to completein a timely fashion. Brampton was respon-sible for some of the delay to the Contrac-tor and the trial judge awarded theContractor damages for those delays. Thetrial judge also found that Brampton wasentitled to completion costs. The trialjudge found that the delays caused by theowner, at least in part, led to the Contrac-tor’s default, however, the trial judgefound that the Contractor had the respon-sibility of performing the contract in accor-dance with its terms and that a reasonablecontractor would have anticipated thefinancial problems and the possibility ofdelay. The trial judge essentially appor-tioned the completion costs between theContractor and Brampton by awarding theContractor damages arising as a result ofthe delay and Brampton some of its com-pletion costs. On Appeal, Saunders J.,stated, at page 393, as follows:

The recovery of completion costs isakin to damages. Those costs com-pensate an owner for an expensewhich he would not have otherwiseincurred. If an owner is partly respon-sible for the incurring of the expense,then it is appropriate to apportion theliability in the same manner as isdone in a tort action.

…

The apportionment of liability cannotbe a precise calculation. In effect, the

learned trial judge apportioned liabil-ity by disallowing the costs to theOwner of architectural and legal ser-vices although he did not express hisreasons in those terms. The result ofhis decision was that the completioncosts were borne by the Contractorand the Owner in a proportion ofapproximately 77:23.

Further, in Dartmouth (City) v. Acres Con-sulting Ltd. (1995), 138 N.S.R. (2d)163(S.C.), the City engaged Acres to preparethe designs and specifications for theconstruction of ramps and floating docksfor the Dartmouth cross harbour ferry ter-minals. The City also contracted withMcAlpine as general contractor.McAlpine subcontracted with Semper tosupply labour, materials, and equipmentfor the installation of the roofing. In turn,Semper subcontracted to Connor toinstall and supply the roofing in accor-dance with the plans and specifications.Construction was completed; however,about five years later water was detectedleaking from the ceiling of one of theramps. The City investigated the cause ofthe leaks and discovered that the roof hadexperienced rot and concluded thatextensive repairs were required. The Citycommenced an action to recover thecosts of these repairs. The evidenceshowed the presence of considerablewater and moisture within the sandwichconstruction of the roof which led to therotting of the wood and vapour barrier inthe roof. Justice Grant canvassed severaldifferent causes which led to the roofdamage and found that McAlpine andConnor failed to follow the specifications.As a result, Grant J. found that Acres wasnot negligent and not liable. JusticeGrant did not canvass the law of appor-tionment as it applies to claims arising intort and contract, but, in any event,apportioned the damages in the follow-ing manner: 20 % to the City (10% foraccepting changes of materials and 10%for work done by City workers); and 80%to McAlpine (20% for negligence inrespect of carpentry work and 60% fornegligence in respect of the roofing). Jus-tice Grant also found that the City was tobe indemnified by its consulting engineerfor 10% of the damages for accepting thechanges in the roof materials. Further,McAlpine was to receive indemnity fromConnor for the 60% of the damagesresulting from the roofing negligence asConnor had performed the work.

Clearly, where available, the principlescontained in the Coopers & Lybrand,Tompkins Hardware, and Convert-A-Wallcases contribute an element of flexibilityinto the analysis of shared responsibilityfor damages in contract, including, in theview of the authors, delay damages, par-

ticularly in circumstances where theclaimant has contributed to the delay.

Such an approach is to be compared withthat contained in U.S. cases such as Coath& Goss, Inc., A Corporation v. The UnitedStates, 101 Ct. Cl. 702 (1944), and Blinder-man Construction Co., Inc. v. The UnitedStates, 695 F.2d 552 (U.S.C.A., 1982), pur-suant to which apportionment is onlyallowable where there is proof of a clearallocation of the delay and expense attrib-utable to each party.

Again, however, it does not appear thatthe issue of the defence of concurrentdelay has been specifically addressed bythe court in the cited Canadian jurispru-dence on apportionment. In other words,where concurrent delay clearly occurs,and the defence is squarely raised, appor-tionment, as it has been applied in theconstruction context to date, does notdirectly address the basic causation issueinherent in the defence.

Importantly, the Supreme Court of Cana-da in Athey v. Leonati, [1996] 3 S.C.R. 458,140 D.L.R. (4th) 235 can be referenced (byanalogy) in this context. Athey v. Leonatideals with personal injury; however, Jus-tice Lee considered the principles set outin Athey v. Leonati in the context of con-current delay in The City of Edmonton v.Lovat Tunnel Equipment Inc. (2000), 3C.C.L.T. (3d) 78 (Alta. Q.B.).

In his decision, Justice Lee, responding toan argument submitted by the City ofEdmonton that the “collapsed as-builtschedule” delay analysis presented by itsscheduling expert was in accordance withthe test adopted by the Supreme Court ofCanada in Athey v. Leonati, had this tosay:

[520] The court in Athey v. Leonaticonfirmed that causation is estab-lished when the plaintiff proves on abalance of probabilities that thedefendant has caused or contributedto the injury. Generally, a “but for”test is employed for causation, pur-suant to which the plaintiff mustestablish that the injury complainedof would not have occurred but forthe negligence of the defendant.

[521] Under various circumstances,the Courts will recognize that causa-tion may be established where thedefendant’s negligence materiallycontributed to the occurrence of theinjury. Where there are numerous fac-tors contributing to the injury, thedefendant will be liable for all of theinjuries caused or materially con-tributed to by his or her negligence.

The Athey v. Leonati decision (written byJustice Major), and its forbears, provideauthoritative Canadian support for the

6

“material contribution” approach to theapportionment of damages in negligence,as well, it is contended, in contract.

Justice Major, in addressing apportion-ment, in Athey v. Leonati makes a veryclear differentiation between tortious andnon-tortious causes, noting that:

Apportionment between tortiouscauses is expressly permitted byprovincial negligence statutes and isconsistent with the general principlesof tort law. The plaintiff is still fullycompensated and is placed in theposition he or she would have beenin but for the negligence of the defen-dants. Each defendant remains fullyliable to the plaintiff for the injury,since each was a cause of the injury.The legislation simply permits defen-dants to seek contribution andindemnity from one another, accord-ing to the degree of responsibility forthe injury.

In the present case, the suggestedapportionment is between tortiousand non-tortious causes. Apportion-ment between tortious and non-tor-tious causes is contrary to theprinciples of tort law, because thedefendant would escape full liabilityeven though he or she caused or con-tributed to the plaintiff’s entireinjuries. The plaintiff would not beadequately compensated, since theplaintiff would not be placed in theposition he or she would have beenin absent the defendant’s negligence.

In the following excerpt, Justice Majorsets out some of the general principles tobe considered:

Causation is established where theplaintiff proves to the civil standardon a balance of probabilities that thedefendant caused or contributed tothe injury: Snell v. Farrell, [1990] 2S.C.R. 311; McGhee v. National CoalBoard, [1972] 3 All E.R. 1008 (H.L.).

The general, but not conclusive, testfor causation is the “but for” test,which requires the plaintiff to showthat the injury would not haveoccurred but for the negligence of thedefendant: Horsely v. MacLaren,[1972] S.C.R. 441.

The “but for” test is unworkable insome circumstances, so the courtshave recognized that causation isestablished where the defendant’snegligence “materially contributed”to the occurrence of the injury: Myersv. Peel County Board of Education;[1981] 2 S.C.R. 21, Bonnington Cast-ings, Ltd. v. Wardlaw, [1956] 1 All E.R.615 (H.L.); McGhee v. National CoalBoard, supra. A contributing factor is

material if it falls outside the de min-imus range: Bonnington Castings,Ltd. v. Wardlaw, supra; see also R. v.Pinske (1988), 30, B.C.L.R. (2d) 114(B.C.C.A.), aff’d [1989] 2 S.C.R. 979…

[…]

To understand these cases, and tosee why they are not applicable to thepresent situation, one need only con-sider first principles. The essentialpurpose and most basic principle oftort law is that the plaintiff must beplaced in the position he or shewould have been in absent the defen-dant’s negligence (the “original posi-tion”). However, the plaintiff is not tobe placed in a position better than hisor her original one. It is therefore nec-essary not only to determine theplaintiff’s position after the tort butalso to assess what the “original posi-tion” would have been. It is the dif-ference between these positions, the“original position” and the “injuredposition”, which is the plaintiff’s loss.

The last paragraph, cited above, is clearlyin accord with the approach set out byJustice Wallace in the Pacific Coast Con-struction Co. Ltd. case.

In the result, the Supreme Court didapportion between tortious and non-tor-tious causes in Athey v. Leonati.

The Supreme Court of Canada also adopt-ed the “material contribution” test, dis-cussed in Athey v. Leonati, in its recentdecision of Walker Estate v. York FinchGeneral Hospital, [2001] S.C.J. No. 24. InWalker Estate, three plaintiffs, Osborne,“M”, and Walker, contracted HIV fromblood and blood products supplied by theCanadian Red Cross Society (“RedCross”). The plaintiffs claimed that theRed Cross was negligent in its proceduresused to screen blood donors. Osborneand “M” were successful at trial; however,the trial judge found that Walker could notprove causation. The Ontario Court ofAppeal agreed with the trial judge’s deci-sion with respect to Osborne and “M”, butreversed the trial judge’s decision withrespect to Walker finding that if the trialjudge applied the correct causal analysishe would have found the necessarycausal link. In dismissing the appeal of theRed Cross, the Supreme Court of Canadastated as follows, at paras. 87 and 88:

With respect to negligent donorscreening, the plaintiffs must estab-lish the duty of care and the standardof care owed to them by the C.R.C.S.[the Red Cross]. The plaintiffs mustalso prove that the C.R.C.S. causedtheir injuries. The unique difficultiesin proving causation make this areaof negligence atypical. The generaltest for causation in cases where a

single cause can be attributed to aharm is the “but-for” test. However,the but-for test is unworkable insome situations, particularly wheremultiple independent causes maybring about a single harm.

In cases of negligent donor screen-ing, it may be difficult or impossibleto prove hypothetically what thedonor would have done had he orshe been properly screened by theC.R.C.S. The added element of donorconduct in these cases means thatthe but-for test could operate unfair-ly, highlighting the possibility of leav-ing legitimate plaintiffsuncompensated. Thus, the questionin cases of negligent donor screeningshould not be whether the C.R.C.S.’sconduct was a necessary conditionfor the plaintiffs’ injuries using the“but-for” test, but whether that con-duct was a sufficient condition. Theproper test for causation in cases ofnegligent donor screening is whetherthe defendant’s negligence “material-ly contributed” to the occurrence ofthe injury. In the present case, it isclear that it did. “A contributing factoris material if it falls outside the deminimis range” (see Athey v. Leonati,[1996] 3 S.C.R. 458, at para. 15). Assuch, the plaintiff retains the burdenof proving that the failure of theC.R.C.S. to screen donors with taint-ed blood materially contributed toWalker contracting HIV from the taint-ed blood. [Emphasis added.]

In situations where there are concurrentdelays (whether all such delays are non-excusable or some are non-excusable andone or more are excusable), notwith-standing causation concerns, it wouldappear equitable to apportion damagesamongst the wrongdoers which havematerially contributed to the delay, andthe consequent damages. For example, ina situation of pure concurrent delay, suchthat two or more parties have delayed inperforming their obligations in respect ofthe same time period and the innocentplaintiff is unable to prove which party iscausally responsible, it would appearclearly inequitable to allow the wrongdo-ers to escape liability and have the inno-cent claimant incur the entire damage.Rather, in appropriate circumstances, thecourts could apply the principles enunci-ated in the relevant contributory negli-gence legislation, whether directly or byanalogy, and apportion the damages (per-haps equally) amongst the wrongdoers.(In cases where both the claimant and thedefendant(s) have contributed to thedelay, it is inequitable for either theclaimant or the defendant(s) to incur all ofthe damages. In such a case, it may be

7

equitable for the court to apportion thedamages (perhaps equally).)

As contended above, the paradigm situa-tion in terms of the inequity inherent inthe concurrent delay defence ariseswhere at the same time there is an inno-cent plaintiff and two or more other pro-ject participants in delay. Here, the law oftort, and, in particular, the concept of“material contribution”, is also relevant.A.M. Linden in Canadian Tort Law, 6th ed.(Toronto: Butterworths Canada Ltd., 1997)writes, at pages 109-110, as follows:

The “but for” test ran into stormysailing where two or more defen-dants combined to cause loss. If theinjury would have transpired if eithercause alone had been operating, nei-ther party might be a cause under the“but for” test. Suppose A and B neg-ligently light fires at different placesand the fires spread to engulf theplaintiff’s house. A and B might arguethat the fire would have resultedwithout their negligence. Conse-quently, a blinkered court might holdthat neither of the defendants,although both negligent, was thecause of the loss, because it wouldhave occurred in any event.

This just could not be tolerated and,happily, the courts have handled thissituation with common sense. Theydevised the substantial factor test,which holds that if the acts of twopeople are both substantial factors inbringing about the result, then liabili-ty is imposed on both on the theorythat both “materially contributed tothe occurrence”. Consequently, inLambton v. Mellish, two merry-go-round operators were sued for nui-sance as a result of the maddeningnoise made by their organs. Injunc-tions were granted against them indi-vidually, because according to Mr.Justice Chitty:

If the acts of two persons, eachbeing aware of what the other isgoing, amounted in the aggre-gate to what is an actionablewrong, each is amenable to theremedy against the aggregatecause of complaint. The defen-dants here are both responsiblefor the noise as a whole so far asit constitutes a nuisance affect-ing the Plaintiff, and each mustbe restrained in respect of hisown share in making the noise.

In another case, Corey v. Havener, theplaintiff, in a horse and wagon, waspassed by two motorists driving at ahigh rate of speed, one on each side.The horse took fright and the plaintiffwas injured. Although the defendants

acted independently, judgment wasgiven against both of them for the fullamount of the plaintiff’s damagesbecause “if each contributed to theinjury, that is enough to bind both”. Asimilar case is Arneil v. Paterson,where two dogs were held responsi-ble for the entire damage “becauseeach dog did in the eye of the lawoccasion the whole of the injury ofwhich the pursuers complain”. Thus, ifthe concurrent negligence of twopeople combined to kill someone,each would be equally responsiblefor the death. A group of pollutersmay be jointly liable though the harmcaused by each cannot be deter-mined.

Importantly, it may be possible to arbitrar-ily apportion degrees of fault amongst thewrongdoers. Potentially, this is extremelysignificant dealing with the concurrentdelay defence. Specifically, all contributo-ry negligence legislation provides that if itis not possible to establish degrees offault, then the court must apportion liabil-ity equally. For example, Section 1(1) ofthe Contributory Negligence Act, R.S.N.B.1973, c.C-19, as amended, provides as fol-lows:

Where by the fault of two or morepersons damage or loss is caused toone or more of them, the liability tomake good the damage or loss is inproportion to the degree in whicheach person was at fault but if, havingregard to all the circumstances of thecase, it is not possible to establishdifferent degrees of fault, the liabilityshall be apportioned equally.

As discussed above, in jurisdictionswhere the courts have determined thatcontributory negligence legislation doesnot apply to contractual claims theauthorities nevertheless exist to supportthe proposition that the principles set outin the contributory negligence legislationcan be applied to allow apportionment incontract. Accordingly, the presumption ofequal apportionment of liability may beavailable to overcome the causation hur-dle inherent in the concurrent delaydefence.

5. CONCURRENT LIABILITY IN

TORT AND CONTRACT

Another important principle which intro-duces flexibility into the assessment ofresponsibility for damages, and may beseen as enhancing access to contributorynegligence legislation, is the principle ofconcurrent liability in contract and tort.

As stated above, some Canadian courtshave declined to apply contributory negli-gence legislation to claims arising in con-tract. As an alternative, some courts have

elected to apply contributory negligenceprinciples to apportion damages amongstwrongdoers (see: Tompkins, supra, andRibic v. Weinstein et al., supra). Important-ly, however, in provinces where the courtsare unlikely to apply contributory negli-gence legislation directly to contractclaims, the courts have nevertheless, incertain instances, arrived at the sameresult by holding the defendant liable tothe claimant concurrently in tort and incontract (see: Husky Oil Operations Ltd. v.Oster (1978), 87 D.L.R. (3d) 86 (Sask. Q.B.);Canadian Western Natural Gas Co. v.Pathfinder Surveys Ltd. (1980), 12 Alta.L.R. (2d) 135, 12 C.C.L.T. 211 (C.A.); andDominion Chain Co. Ltd. v. Eastern Con-struction Co. Ltd. (1976), 12 O.R. (2d) 210(C.A.), aff’d [1978] 2 S.C.R. 1346 in whichthe Ontario Court of Appeal found that theOntario Negligence Act does not apply toactions in contract, but allowed contribu-tion on the basis that the plaintiff sued inboth tort and contract).

The leading case on the doctrine of con-current liability in contract and tort is theSupreme Court of Canada decision inCentral Trust v. Rafuse, [1986] 2 S.C.R. 147.The principal issue on appeal in CentralTrust v. Rafuse was whether a solicitorwas liable to a client in tort and contractfor damages caused by a failure to meetthe requisite standard of care in the per-formance of services for which the solici-tor was retained. The Court canvassed thelaw with respect to concurrent liability intort and contract and rejected the require-ment set out in J. Nunes Diamonds Ltd. v.Dom. Elec. Protection Co., [1972] S.C.R.769, that tort liability must arise indepen-dent of contract, holding that the commonlaw duty of care is not confined to rela-tionships which arise apart from contract.The effect of the decision was reduced,however, as the Court further stated, atpage 206, as follows:

A concurrent or alternative liability intort will not be admitted if its effectwould be to permit the plaintiff to cir-cumvent or escape a contractualexclusion of liability for the act oromission that would constitute thetort. Subject to this qualification,where concurrent liability in tort andcontract exists the plaintiff has theright to assert the cause of action thatappears to be most advantageous tohim in respect of any legal conse-quence.

In BG Checo International Ltd. v. BritishColumbia (Hydro and Power Authority),[1993] 1 S.C.R. 12, Hydro contracted withCheco to erect transmission towers andstring transmission lines on a right ofway. The tender documents also providedthat Checo was to satisfy itself of the siteconditions and that others would clear the

8

right of way. Hydro contracted the clear-ing work to another party and, to Hydro’sknowledge, the work was done inade-quately. In fact, no further clearing wasdone which resulted in Checo having diffi-culties and increased costs. Checo suedHydro seeking damages for negligentmisrepresentation, or, in the alternative,breach of contract. The contract containedan exclusion clause which limited Hydro’sliability for the clearing of the right of way.The Court followed its decision of CentralTrust v. Rafuse, supra, and held at pages26-27, as follows:

In our view, the general rule emerg-ing from this Court’s decision in Cen-tral Trust v. Rafuse, [1986] 2 S.C.R. 147,is that where a given wrong primafacie supports an action in contractand in tort, the party may sue ineither or both, except where the con-tract indicates that the parties intend-ed to limit or negative the right to suein tort. This limitation on the generalrule of concurrency arises because itis always open to parties to limit orwaive the duties which the commonlaw would impose on them for negli-gence. This principle is of greatimportance in preserving a sphere ofindividual liberty and commercialflexibility.

Therefore, the general rule whichemerges from the decisions of CentralTrust v. Rafuse and BG Checo, is that aparty may sue in both tort and contractunless the contract limits or regulates theparty’s right to sue in tort.

To the extent that the defendant is liablein negligence, recourse to contributorynegligence legislation and caselawshould be available in all of the commonlaw jurisdictions.

Unfortunately, the utility of the concurrentliability argument may be limited by thedoctrine of pure economic loss as devel-oped by the Supreme Court of Canada inCanadian National Railway Co. v. NorskPacific Steamship Co., [1992] 1 S.C.R.1021; Winnipeg Condominium Corpora-tion No. 36 v. Bird Construction Co., [1995]1 S.C.R. 85; Hercules Management Ltd. v.Ernst & Young, [1997] 2 S.C.R. 165; BowValley Husky (Bermuda) Ltd. v. Saint JohnShipbuilding Ltd., [1997] 3 S.C.R. 1210;and Martel Building Ltd. v. Canada, [2000]S.C.J. No. 60.

The Supreme Court of Canada adoptedthe test set out in Anns v. Merton LondonBorough Council, [1978] A.C. 728 (H.L.) inKamloops City v. Nielsen, [1984] 2 S.C.R. 2to determine whether pure economic lossis recoverable. The Supreme Court ofCanada has also adopted the categoryapproach of Professor Feldthusen whosets out the following categories of exclu-

sions to the non-recoverability of pureeconomic loss doctrine:

• the independent liability of statutorypublic authorities;

• negligent misrepresentation;

• negligent performance of a service;

• negligent supply of shoddy goods orstructures;

• relational economic loss.

However, the Supreme Court of Canadahas not restricted recovery to cases fallingwithin these categories of exclusions andhas applied the Anns test to determinenovel cases of pure economic loss whichfall outside of these categories.

In the construction context, where a plain-tiff claims for delay both in contract andtort, the plaintiff might be able to arguethat its claim falls within the categories ofnegligent misrepresentation or negligentperformance of a service. For example,where a general contractor negligentlyrepresents that it will complete the projectby a particular date, and fails to do so, theowner will be able to argue that it canrecover for pure economic loss on thebasis of negligent misrepresentation. Amore difficult problem arises where thereason for the delay is not a negligent rep-resentation as to the completion date, butwhere the defendant was negligent in per-forming its obligations.

Professor Feldthusen in Economic Negli-gence, 4th ed. (Toronto: Carswell, 2000)sets out the test to determine if a defen-dant will be held liable for economic lossfor negligently performing a service, atpage 120, as follows:

There is a general agreement amongthe courts in all common law jurisdic-tions that the defendant will be heldliable for the plaintiff’s economic lossif: (1) the defendant voluntarilyundertakes to perform a specific ser-vice for the plaintiff’s benefit; (2) theplaintiff relies on the defendant toperform the undertaking; and (3) thenegligent performance of the serviceinjures the plaintiff.

Thus, in the construction context, whereplaintiff contracts with a defendant to per-form a service, if the defendant is foundconcurrently liable in contract and tort, itis contended that the category of negli-gent performance of a service wouldapply and the plaintiff should be able torecover for pure economic loss.

Where a delay claim is made by an owneragainst a subcontractor the courts mayarrive at a different conclusion. In thisrespect, Professor Feldthusen, in Econom-ic Negligence, writes, at pages 136-137, asfollows:

Unlike the other services cases theowner will, at least in theory, have anadequate legal remedy already underthe main contract with the generalcontractor. For this reason and otherreasons, the case in favour of a directaction against the subcontractor isnot compelling. On the other hand,provided the relevant obligationbreached in the subcontract is identi-cal to the obligation specified in themain contract, there is little harm inrecognizing the direct suit. The gener-al contractor may be regarded as amere conduit of obligations, and thetwo contracts in effect collapsed intoone between the owner and the sub-contractor.

It must be noted, however, that while Pro-fessor Feldthusen writes that the generalcontractor may be regarded as a conduit,the British Columbia Supreme Court dis-missed an owner’s claim against subcon-tractors with which it did not have privityof contract. In Status Electrical Corp. v. Uni-versity of British Columbia, [2000] B.C.J.No. 2569, the University counterclaimedagainst several of the general contractor’ssubcontractors alleging that the Universitysuffered delay damages as a result of thesubcontractors’ negligence. On applica-tion, Sigurdson J. dismissed the Universi-ty’s counterclaims finding that this was notthe type of situation in which a new cate-gory of recoverable pure economic lossshould be created, nor should one of thecurrent categories be expanded.

However, Status Electrical is not a case ofconcurrent liability in contract and tort.Further, it is curious that Sigurdson J. stat-ed that it was not seriously suggested thatthe facts brought the claims within one ofrecognized categories. Following the testfor negligent performance of a serviceillustrated by Professor Feldthusen, setout above, it would appear that it mayhave been possible to argue that the sub-contractor negligently performed a ser-vice, since the subcontractors voluntarilyundertook to perform a service whichdirectly benefited the University, the Uni-versity relied on the subcontractors, andthe University suffered loss.

Nevertheless, the doctrine of pure eco-nomic loss must be recognized as a pos-sible limiting factor to advancing a claimin negligence.

6. SUMMARY

Concurrent delay arises where two sepa-rate delay events occur during the sametime period and both, independently, affectthe completion date. As a result, both par-ties causing the delay may argue that theclaimant cannot meet the “but for” testand prove the proximate causation which

9

has been traditionally a condition prece-dent to compensation. Such a conclusionbars an innocent claimant from recovery, aresult, which on its face, appears to beunjust. Even where the claimant has mate-rially contributed to the delay, it appearsinequitable to allow a wrongdoer toescape responsibility through the occur-rence of a fortuitous event.

In Canadian common law jurisdictionswhere the courts have found that contrib-utory negligence legislation applies tobreach of contract claims, the claimantnot only has an argument that the courtmust do the “best it can” to determine theapportionment of damages between thewrongdoers, but, as well, the court, if sat-isfied that the defendant has “materiallycontributed” to the delay, may rely uponsuch legislation to overcome the impedi-ment to compensation represented by theprinciple of several liability and to appor-tion liability (and damages). If the court isunable to determine the appropriateapportionment, then, arguably, the courtmay apportion the damages equally.

In Canadian common law jurisdictionswhere the courts have found that contrib-utory negligence legislation does notapply to breach of contract claims, theclaimant may nevertheless argue that thecourt must do the “best it can” to deter-mine the damages, and the claimant mayalso argue that the court, so long as it issatisfied that the defendant has “material-ly contributed” to the delay, should, byanalogy, apply contributory negligenceprinciples and apportion liability (anddamages) accordingly, or that the defen-dant(s) are concurrently liable in negli-gence, giving rise to the apportionmentpowers provided by the contributory neg-ligence legislation.

Normally, it is only after the court is satis-fied that causation has been establishedthat it will turn to an assessment of thedamages suffered, the issue as to whetherthe claimant is contributorily responsible,and a potential apportionment asbetween the wrongdoers. Accordingly, in

the context of delay analysis, in consider-ing the approaches available to a claimsconsultant, it appears that the collapsed-as-built schedule method may be themost appropriate vehicle for assessingdamages. Importantly, a court must bepersuaded that, as between two or morewrongdoers, responsibility must be allo-cated so that the innocent party is madewhole. If the claimant is not an “innocentparty”, then the claimant must share theresponsibility with the wrongdoers.

In essence, the solution to the conundrumof the concurrent delay defence is for thecourt to accept that, in circumstances ofconcurrent delay(s), each person guilty ofnon-excusable delay has “materially con-tributed” to the critical path delay and isliable for an apportioned amount of thedamages suffered, whether specificamounts of damages can be attributed toseparate causes or not.

In a legal environment which clearlyinvolves the convergence of contract andtort theories, it should be open to the courtto embrace the tools of contributory negli-gence legislation and the related caselawin order to overcome the hurdle of therestrictive approach to causation which isinherent in the concurrent delay defence.

The fundamental challenge posed by theconcurrent delay defence itself was clear-ly articulated, in obiter, by McLachlin J.(as she then was), of the Supreme Courtof Canada, (dissenting) in Sunrise Co. v.Lake Winnipeg (The), [1991] 1 S.C.R. 3,where she stated:

… Moreover, it can be argued thatapplying strict logic, adoption of thisapproach might result in the defen-dant’s recovering nothing in the casewhere its ship is damaged by twoconsecutive tortfeasors and the timerequired to effect both sets of repairswas the same.

The following example illustrates thisconclusion. Assume that the ship wasdamaged in two separate and unre-lated tortious collisions, and that the

repair of the damage caused by eachrequires 10 days to complete. Theship is then taken out of service for 10days and both repairs are performedconcurrently. From the perspective ofthe first tortfeasor the fact that theship had to be taken out of service for10 days to repair the damage causedby the second tortfeasor would serveto bar the recovery of damages forthe losses suffered during the deten-tion. The second tortfeasor couldobviously make precisely the sameassertion and argue that it should notbe held liable for the detention as therequirement to repair the damagecaused by the first tortfeasor meantthat the ship would not have been “aprofit-earning machine” during therepair period even in the absence ofthe damage caused by the secondtortfeasor. In short, where there aretwo operative causes of the deten-tion, it can be argued by the partiesrespectively responsible for each thatto the extent the detention wascaused by the others’ act, it is notresponsible. This would serve to barthe owner from recovering anydetention losses caused by concur-rent repairs due to two separate inci-dents that the owner, by default,would end up bearing the loss.

This result would appear, ab initio, anincorrect one and particularly unfairwhen all the damage was tortiouslycaused. To avoid such result, it is nec-essary to introduce a factor otherthan pure causation. What is requiredis a rule that says (a) that one of thetwo causes of the concurrent loss isresponsible (e.g., the “first in time”rule) or (b) that the concurrent delayshould be apportioned between thetwo causes of the concurrent loss.

Here, Chief Justice McLachlin identifiedthe need for a solution to the conundrumof the concurrent delay defence, and, withrespect, advanced a modest proposalwhich we have endeavoured to further.

The Revay Report is published by Revay andAssociates Limited, a national firm of Construc-tion Consultants and Claims Specialists, assistingowners and contractors in achieving profitableand trouble-free construction projects.

Contents may be reproduced, with a credit asto source appreciated. Your comments andsuggestions for future articles are most wel-come.

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