Time's Up ' Appeal Court Confirms Strict Time Limits For Construction Claims

• Published date: 08 May 2020
• Author: Mr Len Andrychuk, Q.C., Andrew Konopelny, Milad Alishahi and Josh Morrison
• Subject Matter: Litigation, Mediation & Arbitration, Real Estate and Construction, Arbitration & Dispute Resolution, Trials & Appeals & Compensation, Construction & Planning
• Law Firm: MLT Aikins LLP

The Saskatchewan Court of Appeal recently released a decision dealing with statutorily imposed deadlines for commencing lawsuits in Saskatchewan. This decision will directly impact when a party must commence a lawsuit, particularly in the context of disputes arising during long-term construction projects.

In Saskatchewan (Highways and Infrastructure) v Venture Construction Inc., 2020 SKCA 39 [Venture Construction], the Saskatchewan Court of Appeal reversed a lower court decision on a limitations period issue, concerning whether a claim had been brought in time.

Background

The specific facts of the case were fairly straightforward:

• Venture Construction contracted to perform road construction for the Ministry of Highways.
• Venture Construction hired a subcontractor, Johnston Bros, to lay down the subgrade.
• The contract contained subgrade specifications and oversight control of the work, and payment approval was delegated to an engineer designated by the Ministry.
• Johnston completed its work in December 2010, at a time when Venture was not on site at all. Venture was paid in full by the Ministry for the work performed by Johnston in 2010, and Johnston was paid by Venture.
• When Venture arrived at the project site in May 2011, it discovered that the subgrade work required remediation. The Ministry argued that the subgrade work was initially satisfactory but deteriorated due to Venture's failure to properly prepare for winter, and that Venture had to take responsibility for remediation. Venture remediated the subgrade at its own expense.
• Venture suspected in May 2011 that the Ministry had not properly tested the subgrade and knew it had not received test results. In December 2012, Venture received records from the Ministry that it said demonstrated the subgrade testing in 2010 had not been properly conducted.
• There was back and forth between Venture and the Ministry as to requested payment for the remediation work through 2013 and 2014 but Venture commenced a lawsuit on April 7, 2014. Venture sought damages of more than $4 million, alleging negligence and breach of contract by the Ministry.

The Ministry brought a summary judgment application to have the claim dismissed for being brought after the two-year limitation period under The Limitations Act. The application was initially rejected, and the Ministry appealed.

The Court of Appeal's Decision

The Court of Appeal determined that the claim was brought outside of the two-year limitation period and dismissed...