Blaney McMurtry LLP - 2 Queen Street East, Suite 1500 - Toronto, Canada www.blaney.com

Strategies for Defending Liability Claims in the Construction ContextAndrew J. Heal416.593.3934aheal@blaney.com

Construction claimsare complicatedmulti party, multi issue

relationships primarily contractualusually involves some allegation of professional negligenceoverlap of tort and contract

Every major construction claiminvolves a professional eg. architect and/ or engineer (and specialty sub-consultants)building inspector and plans examinercontractor, specialty contractor, manufacturer

Who is a professional?no all inclusive definitionspecialized skill derived from training and experiencecommitted to higher standards of service and principles for the benefit of the community as a wholeself regulating admission and standards

Regulation of Professionsgenerally provinciallyLaw Society ActProfessional Engineers ActArchitects Act

Civil Liability“With the added prestige and value of his or her services has come, as leaders of the profession have recognized, a concomitant and commensurately increased responsibility to the public.”

Some professionals may be able to take advantage of

statutory protections eg. municipal building inspectorscontractual protections eg. financial advisor account agreements, geotechnical engineers limitation of use or reliance language eg. lawyers retaining the right to act against former clients in unrelated transactions

Professional liability claims may arise for breach of contract and in negligence

concurrent liabilitycontract sets the standard of carecan limit liabilitycan’t reduce the professional’s performance below that of reasonable care

Standards of practice evolve over timestandards of legal, engineering and medical practice of the 1950’s aren’t the standards of todaymust keep on top of new developments and new technology

Construction ContextI am not dealing with coveragedo note that many claims are being defended which years ago may not have triggered coverage

Examplescontractor sues ownerclaims a lienowner counterclaims, sues contractor and bonding company separately under the performance bonddefence triggered

Exampleseveryone third parties subcontractorsdirect damages claimed, consequential damages claimed, pure economic loss claimeda headache!

Examples (cont’d)take two aspirin and call your defence counselto properly defend must value claim for unpaid contract balancework with bonding company (they hold indemnity from principals of contractor)was there truly fault on the part of contractor or simply failure to perform

Examples (cont’d)is there a contractual indemnity (to the owner)is there a contractual indemnity (from the subcontractor)sometimes can get subcontractor to assume the defence

Examples (cont’d)always check the contract language

sets the standard of performance and hence breach (tort or otherwise)

Under the Ontario Rules, three main pre-trial attacks on a proceeding

motion to strike (Rule 21)dismissal for delay (Rule 24)summary judgment (Rule 20)

motion to dismiss for delay brought by defendantmotion to strike or for summary judgment can be brought by any partymost of my comments from a defendant’s perspective

motion to strike (Rule 21)

is it plain and obvious the plaintiff’s case cannot succeed?is the plaintiff without legal capacity to sue?

must bring the motion promptlythe whole idea is to bring the proceeding to an early halt not inexpensive

a legal issue with a novel aspect is not suitable for determination under Rule 21 where “factual considerations arise”damages evidence still had to be led at a trial, no real cost savings, and factual inferences were being made from the pleadingsPDC 3 Partnership v. Bregman + Hamman [2001] O.J. No. 422 (CA)

you can’t use Rule 21 to decide an admissibility question or whether to move for summary judgment BDO Dunwoody v. Buckingham Securities (2008) O.R. (3d) 207 (SCJ)

three tips on a motion to striketactically, does it seriously undermine the plaintiff’s case?are you making the plaintiff’s pleading better?don’t focus unduly on dismissing the whole action, attack parts where possible

motion to dismiss for delay (Rule 24)

can be brought when statement of claim not served in the prescribed timewhere more than six months after pleadings closedplaintiff has had action struck off trial list and has not moved for leave to put it back on within 30 says

is the default intentional and contumeliousis there inordinate delayput in the evidence of the affected parties

Armstrong v. McCall 2006 CarswellOnt 3134

has a witness died?how long has it been since the events in question?has the plaintiff demonstrated necessary witnesses have a sufficient recollection of events

Baranick .v Counsel Trust 2007 CarswellOnt 3287, affirmed 2008 ONCA 142 (CA)

moving party must not be in defaultdo you need to show actual prejudice or presumption of prejudice?

three tips for motions to dismiss for delayalways prepare and serve your sworn affidavit of documents are you really asking for case management or a timetable?what is the real prejudice?

motion for summary judgment (Rule 20)

can move after delivery of pleadingsplaintiff can move with leave where special urgency shown

must show there is no genuine issue for trialno genuine factual issuean issue of credibility on a material fact can create a triable issue

can be brought at any timebefore or after discoveries

get admissions at discoveryavoid the discovery cost, and move before discoverybut there will be cross examinations

whole process very expensiveif unsuccessful, risk substantial indemnity costsdon’t do it if you are essentially not saving much time or money, have the trial

Where a court is satisfied there is no genuine issue for trial with respect to a claim or defence, must grant summary judgment

Irving Ungerman v. Galanis (1991) 4 O.R. (3d) 545 (CA)

to oppose, must show “real chance of success”at trial

Guarantee Company v. Gordon Capital [1999] S.C.J. No.60

to oppose judgmentmust offer affidavit evidence in responsecannot be mere denialsconsider use of Rule 39.03

seek in the alternative, partial summary judgmentan order defining what material facts are not in dispute

summary judgment remains the exception not the rule, but…“A summary judgment motion cannot be defeated by vague references to what may be adduced in the future, if the matter was allowed to proceed.”

Canada (Attorney General) v. Lameman 2008 SCC 14

three tips for summary judgmentis the motion the application of settled law to essentially undisputed facts?almost always cross examine best if you can prove the facts out of the mouth of the opponent’s deponent, or documentary evidence

Conclusion

Construction professionals who hold themselves out as having special skills and expertise face exposure concurrently in contract and tortclaims against professionals can be attacked a number of ways before trial if you are defending a professional liability claim there must be evidence of the appropriate standard of practicemay well need independent expert evidence