Strategies for Defending Liability Claims in the Construction Context Andrew J. Heal 416.593.3934
[email protected]
Blaney McMurtry LLP - 2 Queen Street East, Suite 1500 - Toronto, Canada
www.blaney.com
Construction claims are complicated multi party, multi issue relationships primarily contractual usually involves some allegation of professional negligence overlap of tort and contract
Every major construction claim involves a professional eg. architect and/ or engineer (and specialty sub-consultants) building inspector and plans examiner contractor, specialty contractor, manufacturer
Who is a professional? no all inclusive definition specialized skill derived from training and experience committed to higher standards of service and principles for the benefit of the community as a whole self regulating admission and standards
Regulation of Professions
generally provincially Law Society Act Professional Engineers Act Architects Act
Civil Liability “With the added prestige and value of his or her services has come, as leaders of the profession have recognized, a concomitant and commensurately increased responsibility to the public.”
Some professionals may be able to take advantage of statutory protections eg. municipal building inspectors contractual protections eg. financial advisor account agreements, geotechnical engineers limitation of use or reliance language eg. lawyers retaining the right to act against former clients in unrelated transactions
Professional liability claims may arise for breach of contract and in negligence
concurrent liability contract sets the standard of care can limit liability can’t reduce the professional’s performance below that of reasonable care
Standards of practice evolve over time standards of legal, engineering and medical practice of the 1950’s aren’t the standards of today must keep on top of new developments and new technology
Construction Context I am not dealing with coverage do note that many claims are being defended which years ago may not have triggered coverage
Examples contractor sues owner claims a lien owner counterclaims, sues contractor and bonding company separately under the performance bond defence triggered
Examples everyone third parties subcontractors direct damages claimed, consequential damages claimed, pure economic loss claimed a headache!
Examples (cont’d) take two aspirin and call your defence counsel to properly defend must value claim for unpaid contract balance work with bonding company (they hold indemnity from principals of contractor) was there truly fault on the part of contractor or simply failure to perform
Examples (cont’d) is there a contractual indemnity (to the owner) is there a contractual indemnity (from the subcontractor) sometimes can get subcontractor to assume the defence
Examples (cont’d) always check the contract language sets the standard of performance and hence breach (tort or otherwise)
Under the Ontario Rules, three main pre-trial attacks on a proceeding motion to strike (Rule 21) dismissal for delay (Rule 24) summary judgment (Rule 20)
motion to dismiss for delay brought by defendant motion to strike or for summary judgment can be brought by any party most of my comments from a defendant’s perspective
motion to strike (Rule 21)
is it plain and obvious the plaintiff’s case cannot succeed? is the plaintiff without legal capacity to sue?
must bring the motion promptly the whole idea is to bring the proceeding to an early halt not inexpensive
a legal issue with a novel aspect is not suitable for determination under Rule 21 where “factual considerations arise”
damages evidence still had to be led at a trial, no real cost savings, and factual inferences were being made from the pleadings PDC 3 Partnership v. Bregman + Hamman [2001] O.J. No. 422 (CA) you can’t use Rule 21 to decide an admissibility question or whether to move for summary judgment BDO Dunwoody v. Buckingham Securities (2008) O.R. (3d) 207 (SCJ)
three tips on a motion to strike tactically, does it seriously undermine the plaintiff’s case? are you making the plaintiff’s pleading better? don’t focus unduly on dismissing the whole action, attack parts where possible
motion to dismiss for delay (Rule 24)
can be brought when statement of claim not served in the prescribed time where more than six months after pleadings closed plaintiff has had action struck off trial list and has not moved for leave to put it back on within 30 says
is the default intentional and contumelious is there inordinate delay put in the evidence of the affected parties
Armstrong v. McCall 2006 CarswellOnt 3134
has a witness died? how long has it been since the events in question? has the plaintiff demonstrated necessary witnesses have a sufficient recollection of events
Baranick .v Counsel Trust 2007 CarswellOnt 3287, affirmed 2008 ONCA 142 (CA)
moving party must not be in default do you need to show actual prejudice or presumption of prejudice?
three tips for motions to dismiss for delay always prepare and serve your sworn affidavit of documents are you really asking for case management or a timetable? what is the real prejudice?
motion for summary judgment (Rule 20)
can move after delivery of pleadings plaintiff can move with leave where special urgency shown
must show there is no genuine issue for trial no genuine factual issue an issue of credibility on a material fact can create a triable issue
can be brought at any time before or after discoveries get admissions at discovery avoid the discovery cost, and move before discovery but there will be cross examinations
whole process very expensive if unsuccessful, risk substantial indemnity costs don’t do it if you are essentially not saving much time or money, have the trial
Where a court is satisfied there is no genuine issue for trial with respect to a claim or defence, must grant summary judgment
Irving Ungerman v. Galanis (1991) 4 O.R. (3d) 545 (CA)
to oppose, must show “real chance of success” at trial
Guarantee Company v. Gordon Capital [1999] S.C.J. No.60
to oppose judgment must offer affidavit evidence in response cannot be mere denials consider use of Rule 39.03
seek in the alternative, partial summary judgment an order defining what material facts are not in dispute
summary judgment remains the exception not the rule, but…
“A summary judgment motion cannot be defeated by vague references to what may be adduced in the future, if the matter was allowed to proceed.”
Canada (Attorney General) v. Lameman 2008 SCC 14
three tips for summary judgment is the motion the application of settled law to essentially undisputed facts? almost always cross examine best if you can prove the facts out of the mouth of the opponent’s deponent, or documentary evidence
Conclusion Construction professionals who hold themselves out as having special skills and expertise face exposure concurrently in contract and tort claims against professionals can be attacked a number of ways before trial if you are defending a professional liability claim there must be evidence of the appropriate standard of practice may well need independent expert evidence