Claims For Extra Work And Back Charges: A Tale Of Two Trades

A claim for "extras" - a claim for payment work done outside the scope of a contract - is one of the most common issues giving rise to disputes on construction projects. Perhaps equally as common are disputes arising from "back charges" levied by one party against another lower down the contractual chain.

In the recent Court of Queen's Bench of Alberta decision, Impact Painting Ltd v Man-Shield (Alta) Construction Inc, 2017 ABQB 743, the Court dealt with disputes arising from both of these things.

Man-Shield was the general contractor on a retirement community construction project in Edmonton. Impact was Man-Shield's subcontractor with respect the painting and wallpaper installation.

At the end of its work on the project, Impact issued a number of invoices to Man-Shield for "extras", totalling approximately $134,000 for which no written change orders had been issued. Man-Shield denied the vast majority of those invoices. Impact registered a builders' lien against the project and commenced an action against Man-Shield to seeking payment for the extra work and other unpaid amounts.

The Court held that in determining the liability for costs of extra work the following questions must be answered:

Was the work performed, in fact, extra work? If so, did the party from whom payment is being sought give instructions, express or implied, that work be done or was the work otherwise authorized? Was the party from whom payment is being sought informed or necessarily aware that the extra work would increase the cost Did the party from whom payment is being sought waive the contractual provision requiring changes to be made in writing or acquiesce in ignoring those provisions? If a contractor can prove each of these elements, then it will be entitled to payment for a reasonable amount for the extra work completed.

Man-Shield filed a counterclaim against Impact in the amount of approximately $209,000 for 12 back charges it had issued to Impact throughout the course of Impact's work on the project.

The Court held that a party...