When Courts Will Permit Deviation From Notice Requirements

My last article explained that courts will generally enforce contractual notice requirements contained in construction contracts. This article will explore the circumstances in which courts have permitted claims to advance despite a lack of strict compliance with notice requirements.

Constructive Notice

Constructive notice is when a claimant is able to show that, formalities aside, the defendant had all of the requisite knowledge of the claim.

For example, in W.A. Stephenson Construction (Western) Ltd. v Metro Canada Ltd., [1987] CLD 1499, 1987 CarswellBC 675 (BCSC) [W.A. Stephenson], the Court allowed the contractor's claim despite its failure to comply strictly with the contractual notice requirements. It distinguished Corpex and Doyle,1 and found that the owner had actual or constructive knowledge of the claims through various notices issued throughout the course of the project, as well as "meticulous" meeting minutes documenting the contractor's concerns.2

In Centura Building Systems Ltd. v Cressey Whistler Project Corp., 2002 BCSC 1220, 19 CLR (3d) 142 [Centura], the Court refused to dismiss a claim despite a lack of technical compliance with a contractual notice requirement. The Court held that the notice requirement constituted a condition precedent for a successful claim,3 but stated that:

The weight of authority favours the defendants' view that it is the substance rather than the form of the notice under GC 9.2.2 that is important. The course of dealings between the parties may provide the required notice: Foundation at paras. 455-456, 484, 489-498; TNL Paving Ltd. v. British Columbia (Ministry of Transportation & Highways) (1999), 46 C.L.R. (2d) 165 (B.C. S.C.) at p. 260; W.A. Stephenson Construction (Western) Ltd. v. Metro Canada Ltd. (1987), 27 C.L.R. 113 (B.C. S.C.), at pp. 180-182. What is critical is that the notice provide sufficient particularity to ensure that the recipient understands a claim will be advanced against it for costs related to delays.4 [Emphasis added

The Court held it was necessary to explore the entire factual scenario in order to determine if the owner received "adequate notice" of the claim,5 and found that a trial was required to resolve the issue.6

In Banister Pipeline Construction Co. v TransCanada Pipelines Ltd., 2003 ABQB 599, 30 CLR (3d) 1 [Banister], the contractor claimed for a significant amount of additional work performed outside the scope of the contract, but failed to strictly comply with the change order procedure. The Court allowed the claim regardless, holding that the owner "was always aware" of the extra work being carried out, and that it would be "unconscionable" to deny payment in the circumstances.7 The Court stated that:

TCPL benefited from the work. It had to know that it would increase the cost. It is simply not fair for it to approve the work, watch it being carried out, sign off on the work as it was being...