Construction law case studies are important sources of lessons that counsel and clients can use for their current and future projects. It's good practice to be regularly updated on these case studies, so we’ll go over some of them in this article.
Why are construction law case studies important?
Since Canada’s justice system recognizes court rulings as precedents for future cases, Supreme Court rulings are important for construction lawyers and their clients. In addition, the decisions of the provincial superior courts and courts of appeal are binding to legal matters under its jurisdiction.
This is why when court decisions come out, lawyers are quick to check these cases.
Significant to the construction industry
Construction law is not exempt from these changes. Every now and then, significant decisions are made that affect the relationship between sectors in the construction industry. This includes principal project owners, architects, engineers, contractors, down to sub sub-contractors.
Include cases that do not go to court
Not all significant construction law case studies are court decisions. Some cases are settled, and they don’t go to court. These cases are still important for the construction industry.
What are the important construction law case studies in Canada?
For the most recent and significant construction law case studies in the different provinces, watch this video covering cases until 2021:
More on these cases, plus other case studies, are discussed below. If you’re from Saskatoon or Regina, consult with one of the Lexpert-ranked best construction lawyers in Saskatchewan for more on these construction law case studies.
Breach of contract cases
One of the important issues in construction law is breach of contract. With a simple breach, millions of resources from different stakeholders are threatened to be wasted. Aside from using the adjudication process of provincial construction laws, breach of contract cases can also be resolved by going to court.
Constructum Developments Inc. v. Hogaboam
One of the significant construction law case studies on breach of contract is the case of Constructum Developments Inc. v. Hogaboam, 2015 BCSC 1490. This case highlights the common principle that a contractor’s refusal to complete any deficiencies can be considered as a breach of contract.
It can ultimately result in the repudiation of the construction contract and allowing a homeowner for the correction of all deficiencies before they can be obliged to make the final payment.
Negligence and professional liability
The liability of any party to the construction project can be contractually limited (e.g., waiver of liability clauses), if the parties agree. Construction law case studies have established and expanded this legal principle, which has long been a practice in the construction industry.
Giffels v. Eastern Construction
The classic case of Giffels v. Eastern Construction, [1978] 2 S.C.R. 1346, is one of the cases that is now the basis for contractual limitation of professional liability. Here, the court says that a party (e.g., contractor, engineer, and architect) can be protected by a valid contractual limitation of liability. Consequently, they cannot be compelled to pay damages to a third party, who suffered injuries because of the subject conduct that was limited by the contract.
Construction insurance disputes
The nature of construction projects prompts parties to get insurance policies to cover any unforeseen circumstances affecting these projects. However, disputes may arise among insurance companies, the project owner, the contractor, or other parties. For this, construction law case studies are instructive on how these disputes can be resolved.
Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co.
In terms of insurance disputes in the construction industry, the case of Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37 comes to mind.
Here, the court settled the issue of what standard of review must be used in a standard form contract, such as an insurance policy. Should courts use the correctness standard or the deferential standard?
In holding that it must be the correctness standard, the court said that the interpretation of a standard form contract is an exception to the rule in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53.
In Sattva, it was held that the interpretation of a contract is a question of mixed fact and law, which should use the deferential standard during appeal. In other words, the review of a standard form contract must be based on pure questions of law.
For standard form contracts, facts are less relevant since the receiving party only has a “take-it-or-leave-it” choice, much like contracts of adhesion.
In addition, the court said that it would be terrible for courts to inconsistently interpret similar provisions of standard forms without any justifiable reason. Because standard form contracts are widely used, inconsistent interpretations of it based on facts would cause disorder for the industry.
Health and safety in construction
Related to construction law in Canada are the laws on occupational health and safety (OHS), considering that a construction site is a pitfall of workplace hazards and accidents. Aside from the federal and provincial OHS laws are the construction law case studies that interpreted what these laws say.
R. v. Greater Sudbury (City)
The R. v. Greater Sudbury (City), 2023 SCC 28 is one of the recent Supreme Court decisions that affects the construction industry. Due to the split decision by the high court in this case, the decision of the Ontario Court of Appeal stays.
It held that a construction project owner who hires the following can be considered an “employer” under the Ontario’s OHS Act:
- a quality control staff, inspector, or personnel, to supervise the general contractor
- a general contractor, to be the “constructor” under the Act
As an effect, the project owner has an overlapping liability with the “constructor” under Ontario’s OHS Act for the overall authority for health and safety matters.
Want to learn more about these construction law case studies? Reach out to the best construction lawyers in Canada as ranked by Lexpert.