Refresher On Extras And Back Charges: Impact Painting Ltd v Man-Shield (Alta) Construction Inc

During the course of a construction project, the question often arises as to what is a valid extra and what is a valid back charge. These issues were discussed in some detail in the recent Alberta Court of Queen's Bench decision in Impact Painting Ltd v Man-Shield (Alta) Construction Inc.1

Man-Shield was the general contractor for the construction of the Laurel Retirement Community in Edmonton. Impact was hired by Man-Shield as a painting subcontractor. Upon completion of the project, Impact issued invoices for extras, which were disputed by Man-Shield. Impact registered a builder's lien and claimed $237,676.12. Man-Shield issued back charges to Impact that totalled $208,579.73. After calculating the amount already paid to Impact, the valid extras and the valid back charges, the court concluded that $57,397.86 remained payable to Impact, with interest from the date of the last invoice issued.

Extras

Justice Burrows adopted the test for determining the validity of extras from Kei-Ron Holdings Ltd v Coquihalla Motor Inn Ltd,2 a case that dealt with extras charged by a general contractor to an owner. He found that essentially the same test applies for subcontractors, subject to some modifications. The test places the onus on the party asserting the validity of the extras to show, with respect to each disputed extra, on a balance of probabilities the following:

The work was outside the subcontractor's scope of originally contracted work; The subcontractor was either expressly or impliedly instructed by the general contractor to do the work; The general contractor was informed or would have necessarily known that the extra work would increase cost; and The general contractor waived or acquiesced in not following formal change order provisions. Back charges for Deficiencies

The court in Impact Painting did not mention any authority as to the test to determine the legitimacy of a back charge. Justice Burrows at paragraph 28 found that the party claiming the back charge has the onus to prove that:

The back charge is for an expense actually, necessarily and reasonably incurred by the party claiming it; By terms of the contract, or some other agreement between the parties, the charge related to a task for which the subcontractor undertook responsibility; The general contractor incurred the expense because of the subcontractor's default to which the charge relates; and Prior to incurring the charge, the general contractor gave notice to the subcontractor of default and provided a reasonable opportunity to cure it. Analysis of the claim for Extras

Step one of the test to determine if there is a valid extra requires that the scope of work be considered. The subcontract in this case contained only a brief summary of the scope of work. A more detailed...