



COURT OF APPEAL FOR ONTARIO

CITATION:
Technicore Underground
    Inc. v. Toronto (City), 2012 ONCA 597

DATE: 20120912

DOCKET: C54801

Gillese, Juriansz and Epstein JJ.A.

BETWEEN

Technicore Underground Inc.

Plaintiff

and

City of Toronto

Defendant (Respondent)

and

Clearway Construction Inc.

Third Party (Appellant)

Christos Papadopoulos, for the appellant

Darrel A. Smith, for the respondent

Heard: June 20, 2012

On appeal from the judgment of Justice Beth Allen of the
    Superior Court of Justice, dated December 5, 2011.

Gillese
    J.A.:

[1]

The City of Toronto (the City) successfully disposed of the bulk of a
    multimillion dollar construction claim against it, by means of a partial
    summary judgment motion.  The claimant says that the matter requires a trial
    and should not have been decided by way of summary judgment.

[2]

Is the claimant correct?  In my view, it is not.  As I will explain,
    this appeal should be dismissed.

OVERVIEW

[3]

Clearway Construction Inc. (Clearway) entered into a construction
    contract with the City in which it agreed to construct a water main 5.88
    kilometres in length (the Contract).  The water main ran under a number of
    roads in Toronto, including Leslie Street (the Leslie Street Project).

[4]

Clearway subcontracted with Technicore Underground Inc. (Technicore)
    to do the underground tunnelling, which it did through a tunnel boring machine.

[5]

Technicore excavated the tunnel under Leslie Street.  During the evening
    of August 2 - 3, 2006, there was a flood in that tunnel.  It is the flood that
    led to these legal proceedings.

[6]

As a result of the flood, Technicores tunnel boring machine was trapped
    under Leslie Street.  After rescuing and refurbishing the boring machine,
    Technicore completed the tunnelling by December 22, 2006.

[7]

The Contract work affected by the flood was completed at the end of
    December 2006.

[8]

By letter dated February 9, 2007, Technicore made a claim against
    Clearway for approximately $800,000 plus G.S.T. for damages arising from the
    flood (the Technicore claim).

[9]

On March 6, 2007, Clearway submitted a claim to the City for additional
    payment under the Contract to cover costs incurred as a result of the flood
    (the March 2007 Claim).  In the March 2007 Claim, Clearway sought
    approximately $1,270,000, comprised of indemnity for the Technicore claim plus
    a claim for approximately $400,000 of its own costs incurred as a result of the
    flood.  In the March 2007 Claim, Clearway noted the possibility that some
    costs have not yet been identified and reserve[d] the right to claim payment
    for work(s) not specifically mentioned herein.

[10]

By
    letter dated April 4, 2007, the City denied the March 2007 Claim.

[11]

Technicore
    started the main action in these proceedings on July 30, 2008.  It claimed
    solely against the City for damages suffered as a result of the flood.

[12]

The
    City defended and started a third party claim against Clearway for contribution
    and indemnity, and additional damages.

[13]

Clearway
    defended the Citys third party claim and counterclaimed against the City.  In
    its initial defence and counterclaim, served on the City in March 2010,
    Clearway sought indemnity for the Technicore claim, plus damages of $1,000,000.

[14]

In
    August of 2010, Clearway sent the City a claim in which it repeated the amounts
    sought in the March 2007 Claim and added new claims in excess of $3,000,000
    (the August 2010 Claim).

[15]

In
    an amended defence and counterclaim dated June 23, 2011 (the Counterclaim),
    Clearway continued to seek indemnity for the Technicore claim but increased its
    damages claim to just over $3,400,000.

[16]

In
    a companion construction lien action, Technicore sues Clearway for damages
    arising out of the Leslie Street flood and for certain other claims.  The lien
    action has been ordered to be tried together with this proceeding.

[17]

The
    City brought a motion for partial summary judgment, seeking a dismissal of
    those parts of the Counterclaim that were in excess of the March 2007 Claim. 
    The focus of the motion was paragraph GC 3.14.03.03 of the General Conditions
    that were included as part of the Contract (the Notice Provision).  The
    Notice Provision sets out specific requirements for the filing of claims under
    the Contract.  It reads as follows:

The Contractor shall submit detailed claims as soon as
    reasonably possible and in any event no later than 30 Days after completion of
    the work affected by the situation.  The detailed claim shall:

a)

identify the item or
    items in respect of which the claim arises;

b)

state the grounds,
    contractual or otherwise, upon which the claim is made; and

c)

include the Records
    maintained by the Contractor supporting such claim.

[18]

The
    full text of GC 3.14 can be found as appendix A to these reasons.

[19]

The
    motion judge concluded that Clearway was limited to the March 2007 Claim.  By
    judgment dated December 5, 2011, she granted partial summary judgment (the
    Judgment).

[20]

Clearway
    appeals.  It contends that the portions of its Counterclaim that the Judgment
    has the effect of dismissing raise genuine issues requiring a trial.  It asks
    that the Judgment be set aside.

[21]

In
    my view, the motion judge correctly decided this matter.  I would dismiss the
    appeal.

A PRELIMINARY MATTER

[22]

The
    focus of the motion below was on the timing of the August 2010 Claim, as it had
    been made years after the time required by the Notice Provision.  However, the
    motion judge struck two other parts of the August 2010 Claim for reasons other
    than the timing of its delivery.

[23]

First,
    she struck those parts of the August 2010 Claim that pre-dated, and were
    unrelated to, the Leslie Street Project, noting that they failed to raise a
    genuine issue requiring a trial in respect of the Citys liability.

[24]

Second,
    she struck the parts in which Clearway sought reimbursement for the claims that
    Technicore made against it (Clearway) in the related lien action that had not
    been made against the City.  These other Technicore claims against Clearway
    were unrelated to the flood or the work under Leslie Street (the non-Leslie
    Street Claims).

[25]

Before
    the motion judge, the parties agreed that the non-Leslie Street Claims were not
    properly asserted against the City and should be dismissed, but they disagreed
    on the procedure that should be followed for their dismissal.  The motion judge
    was satisfied that partial summary judgment was an appropriate method by which
    to dispose of the non-Leslie Street claims.

[26]

I
    do not understand Clearways appeal to extend to these two other parts of the
    August 2010 Claim, even though Clearway purports to seek to have the entire
    Judgment set aside.  However, even if Clearway did intend to appeal the
    dismissal of these parts of the Counterclaim, it is readily apparent that the
    appeal fails in respect of these items.  For the reasons given by the motion judge,
    they raise no genuine issue requiring a trial in respect of the City.

THE ISSUES

[27]

Clearway
    submits that the motion judge erred in:

1.       her interpretation of the Notice Provision;

2.      granting
    the motion despite the absence of evidence of prejudice to the City;

3.      allowing
    the City to rely on the Notice Provision when it had failed to comply with GC
    3.14.04;

4.      failing
    to recognize and find that items 7 and 8 in Part 1 of the August 2010 Claim are
    the same as items 3 and 6 of the March 2007 Claim; and

5.      allowing
    the City to rely on the Notice Provision when it has raised no complaint in
    respect of the date of delivery of the March 2007 Claim.

ANALYSIS

Issue 1:
Interpreting the Notice Provision

[28]

Based
    on the jurisprudence, the motion judge concluded that the Notice Provision
    operated as a condition precedent that served to bar the August 2010 Claim
    because Clearway failed to deliver it (the August 2010 Claim) before the expiry
    of the time limit.  Clearway submits that the motion judge erred in her
    interpretation of the Notice Provision.  It argues that had the motion judge
    reviewed GC 3.14 in its entirety, she would have seen that the Notice Provision
    in GC 3.14.03 simply sets out a procedure to identify, and provide details of,
    any claims that are to be subsequently negotiated and possibly mediated
    pursuant to GC 3.14.04 and 3.14.05.  As none of these provisions contains a
    failing which clause, Clearway submits that the Contract does not contain the
    clear language necessary to deprive it of the right to proceed with its full
    counterclaim against the City.

[29]

I
    do not accept this submission.  The Notice Provision sets out a mandatory procedure
    for the filing of claims under the Contract, including the requirement that
    detailed claims are to be submitted no later than 30 days after completion of
    the work affected by the situation.
[1]
The Notice Provision need not include a failing which clause in order for it to
    bar the August 2010 Claim.  This conclusion flows inexorably from the decision
    of the Supreme Court of Canada in
Corpex (1977) Inc. v. Canada
, [1982]
    2 S.C.R. 643.

[30]

In
Corpex
, the plaintiff contractor
    had a contract with the federal government to build a dam across a river.  The
    first stage of the contract required the river to be dewatered.  The contractor
    based his estimate of the pumping costs on incorrect information about the
    nature of the soil contained in the plans and specifications.  After a
    fortnight of pumping, it became obvious that the pumping equipment was not
    equal to the task.  Additional pumps had to be installed.  The contractor did
    not give written notice to the government that it would claim for the
    additional costs occasioned by the mistake as to the soil conditions.

[31]

Notice
    of the claim was required by clause 12 of the General Conditions to the
    contract.  Clause 12 provided:

12.     (1)
No
    payment shall be made
by Her Majesty to the Contractor
in addition to the payment expressly
    promised by the contract on account of any extra expense, loss or damage
    incurred or sustained by the contractor for any reason
,
    including a misunderstanding on the part of the Contractor as to any fact,
    whether or not such misunderstanding is attributable directly or indirectly to
    Her Majesty or any of Her Majesty's agents or servants (whether or not any
    negligence or fraud on the part of Her Majesty's agents or servants is involved)
    unless, in the opinion of the Engineer, the extra expense, loss or damage is
    directly attributable to

(a)     a substantial difference between information relating
    to soil conditions at the work site, or a reasonable assumption of fact based
    thereon, in the plans and specifications or other documents or material
    communicated by Her Majesty to the Contractor for his use in preparing his bid
    and the actual soil conditions encountered at the work site by the Contractor
    when performing the work,

...

in which case,
if
    the Contractor has given the Engineer written notice of his claim before the
    expiry of thirty days after encountering the soil conditions giving rise to the
    claim [...] Her Majesty shall pay
to the Contractor in respect
    of the additional expense, loss or damage incurred or sustained by reason of
    that difference [...] an amount equal to the cost, calculated in accordance
    with clauses 44 to 47 of the General Conditions, of the additional plant,
    labour and materials necessarily involved.  [Emphasis added.]

[32]

Corpex
    sued the government for, among other things, the additional costs arising from
    the mistake as to the soil conditions.  The trial judge allowed this part of
    Corpexs claim based on considerations of equity rather than on a technical
    application of certain clauses in the General Conditions.
[2]


[33]

The
    Federal Court of Appeal overturned the trial decision on this point because
    Corpex had failed to give notice as required by clause 12 of the General
    Conditions.

[34]

The
    Supreme Court upheld the decision of the Federal Court of Appeal.  In paras. 59
    and 60 of
Corpex
, Beetz J., writing for the court, explains that a
    clause such as clause 12 of the General Conditions is of benefit to both the
    contractor and the owner.

The contractor is practically certain of being compensated for
    additional costs either during the work or later, if he complies with the
    provisions of clause 12, and in particular, if he gives the notice provided for
    in that clause.

An owner who is thus informed of a mistake as to the nature of
    the soil knows that the contractor will probably not drop his claim, and he is
    enabled to reconsider his position. He can in practice be assured that the work
    will go forward if he wishes  . He may conclude another agreement with the
    same contractor or some other.  If he prefers for the work to continue under
    the new circumstances, he may make arrangements to monitor quantities and costs
    of additional work so that the payments due the contractor ... can be made.

[35]

In
    para. 62, Beetz J. explains why compliance with a notice provision is a
    condition precedent to legal proceedings:

However, once the work is complete, a contractor cannot claim
    in a court of law benefits similar to those which clause 12 would have
    guaranteed if he has not himself observed that clause and given the notice for
    which the clause provides.  Otherwise, he would be depriving the owner of the
    benefits which he is guaranteed by clause 12.

[36]

There
    was no failing which provision in
Corpex
.  Nonetheless, the
    contractor was barred from asserting this part of its claim because it had
    failed to give notice as required by clause 12.

[37]

Nor
    was there a failing which provision in
Doyle Construction Co. v. Carling
    OKeefe Breweries of Canada Ltd.
(1988), 27 B.C.L.R. (2d) 89 (C.A.).  In
Doyle
,
    the plaintiff contractor was engaged to construct an expansion of the
    defendants brewery.  The tender documents did not contain a clear statement
    that certain items of equipment would be installed by the defendant during the
    construction.  The contractor contracted on the assumption that the equipment
    would not be installed until after the construction was complete.  When the
    mistake was discovered a new construction schedule had to be drawn up.  After
    the work was completed, the contractor submitted a claim for the extra costs
    incurred because of delay.

[38]

The
    trial judge held that the defendant had not breached the contract but, in any event,
    the contractors claim could not proceed because the contractor had failed to
    give notice as required by the contract.  He noted that had the contractor
    given proper notice, the defendant could have addressed cost reduction
    measures, insisted on the institution of a cost control system and taken steps
    to see that all records were preserved.  The contractors failure to comply
    with the notice provisions deprived the defendant of these rights.

[39]

The
    British Columbia Court of Appeal dismissed the contractors appeal, holding
    that compliance with the notice provision in the contract was a condition
    precedent to the contractors claim.

[40]

In
Bemar Construction (Ontario) Inc. v. Mississauga (City of)
(2004), 30
    C.L.R. (3d) 169 (On. S.C.), Fragomeni J. considered
Doyle
at length
    and applied the principles set out in it.  At para. 194, Fragomeni J. concluded
    that the contractor could not advance its claims as it had failed to properly
    comply with the notice provisions in the contract.  On appeal, this court
    approved the trial decision: see
Bemar Construction (Ontario) Inc. v.
    Mississauga (City of)
2007 ONCA 685, 63 C.L.R. (3d) 161.

[41]

Again,
    there was no failing which provision in
Bemar
.

[42]

I
    acknowledge that at para. 6 of
First City Development Corp. Ltd. v.
    Stevenson Construction Co. Ltd.
(1985), 14 C.L.R. 250, the British
    Columbia Court of Appeal stated:

I approach the construction of art. 36 with the proposition
    established by the decided cases in mind: if a party to a building contract is
    to be deprived of a cause of action, this is only to be done by clear words.

[43]

However,
    as the motion judge explained, there are significant factual distinctions
    between
First City
and this case.  In
First City
, there was
    no express time requirement.  Article 36 of the construction contract provided
    that a claim was to be made in writing within a reasonable time after the
    first observance of such damage and not later than the time of final
    certificate.   The plaintiff commenced an action one year after completion. 
    As no final certificate of completion had ever been issued, the claim was
    permitted to proceed.

[44]

Two
    additional points must be made in respect of the decision in
First City
. 
    First, the court makes no mention of
Corpex
in its judgment.  Second,
Doyle
was decided after
First City
.  The British Columbia Court of Appeal
    was fully aware of its decision in
First City
when it rendered its
    decision in
Doyle
.
[3]
Nonetheless, and in the absence of a failing which clause, the court clearly
    and emphatically concluded that compliance with a notice provision is a
    condition precedent to maintaining a claim in the courts.

[45]

Accordingly,
    I see no error in the motion judges interpretation of the Notice Provision. 
    This ground of appeal fails.

Issue 2:
The Absence of Evidence of Prejudice to the City

[46]

Clearway
    submits that when dealing with notice provisions, the courts central concern
    is to protect parties from any prejudice resulting from non-compliance with
    them.  It contends that
Doyle
and
Bemar
are authority for the
    proposition that notice provisions serve to bar claims only where there is
    evidence of prejudice resulting from non-compliance.  Clearway says that the
    City provided no evidence that it suffered prejudice as a result of the timing
    and delivery of the August 2010 Claim and, therefore, the motion judge erred in
    granting partial summary judgment.

[47]

I
    begin by considering
Corpex
.  Does it stipulate that prejudice must be
    proven in order for an owner to rely on a notice provision?  No, it does
    not.    As para. 60 of
Corpex
makes clear, one purpose of a notice
    provision is to enable the owner to consider its position and the financial
    consequences of the contractor providing additional work.  Notice gives the
    owner the opportunity to decide whether to conclude another agreement with the
    contractor or have the work done by some other.  It also enables the owner to
    make arrangements to monitor the costs of the additional work.  The contractor
    must give notice in accordance with the notice provision, otherwise it deprives
    the owner of the benefits guaranteed by the notice provision.

[48]

What
    then of
Doyle
and
Bemar
?  Do either of these cases stand for
    the proposition that the owner must show prejudice in order to rely on a notice
    provision?  In my view, they do not.

[49]

At
    para. 21 of
Doyle
, the trial judge is quoted as stating that had the
    contractor given proper notice, the defendant could have addressed cost
    reduction measures, could have insisted upon the institution of a cost control
    system, and could have taken steps to see that all records, including site
    diaries, were preserved.  Similarly, had Clearway given proper notice in this
    case, the City could have chosen whether to permit Clearway to continue with
    the work occasioned by the flood and, if so, it could have instituted cost
    control mechanisms.  The fact that the trial judge in
Doyle
made those
    findings does not make it a requirement in law.

[50]

Bemar
does not elevate this aspect of
Doyle
to a requirement of law.  It is
    true that
Doyle
is quoted at length and relied on by the trial judge in
Bemar
, and that the findings of prejudice in
Doyle
set out in
    the preceding paragraph are quoted.  But, Fragomeni J. does not suggest that
    prejudice must be established before non-compliance with notice provisions will
    bar a claim.  At para. 194 of the
Bemar
trial decision, Fragomeni J.
    concludes that the contractor did not properly comply with the notice
    provisions in the contract and, therefore, it could not advance its claims.  He
    made no finding of prejudice on the part of the city in reaching that conclusion.

[51]

Accordingly,
    there was no onus on the City to lead evidence of prejudice.  As owner, the
    City is assumed to have been prejudiced by a multimillion dollar claim being
    made years after the Contract permitted and long after the City could consider
    its position and take steps to protect its financial interests.

Issue 3:
Reliance
    on the Notice Provision despite Failing to Comply with GC 3.14.04


[52]

GC
    3.14.04 of the Contract requires the parties to make all reasonable efforts to
    resolve their dispute by amicable negotiations and to provide open and timely
    disclosure of relevant facts, information, and documents to facilitate these
    negotiations.

[53]

Clearway
    says that instead of attempting to negotiate after receiving the March 2007
    Claim, the City simply issued the denial letter of April 4, 2007.  Clearway
    also complains about the Citys delay in disclosing the report prepared by its
    geotechnical engineer on the causes of the flood. Clearway submits that because
    the City failed to comply with the negotiation and disclosure requirements in
    GC 3.14.04, it should be barred from relying on the Notice Provision.

[54]

In
    my view, this submission completely misses the mark.  GC 3.14.04
follows
the Notice
    Provision in GC 3.14.03.  Therefore, the negotiation and disclosure
    requirements in GC 3.14.04 arise
after
a claim has been made pursuant to GC 3.14.03.  Accordingly, the complaints that
    Clearway levies against the City about negotiation and disclosure can only
    relate to the March 2007 Claim, with which the City took no issue in the motion
    below.  An alleged failure on the part of the City to negotiate in the spring
    of 2007 is not, and cannot be, relevant to the August 2010 Claim, as the
    negotiation requirement did not arise until the August 2010 Claim had been
    delivered to the City.  Similarly, the disclosure requirement could not have
    arisen in 2007 in respect of the August 2010 Claim.

[55]

Finally,
    while I need not decide the point, it may be that GC 3.14.04 is not engaged at
    all where, as in this case, the August 2010 Claim was not properly advanced in
    accordance with the Notice Provision.

Issue 4:
Items 7 and 8 of the August 2010 Claim


[56]

Items
    3 and 6 of the March 2007 Claim were for the extended maintenance of
    excavations or pits, and the associated shoring required for the pits.  The
    cost of these two items in the March 2007 Claim was slightly in excess of
    $455,000.  Clearway says that items 7 and 8 of the August 2010 Claim are for
    the same items, but for the increased amount of approximately $1,700,000.

[57]

Clearway
    submits that the motion judge erred in failing to recognize that items 7 and 8
    of the August 2010 Claim are of the same type as those in items 3 and 6 of the
    March 2007 Claim and, instead, treated them as new claims.  It asks that even
    if the appeal is otherwise dismissed, it be allowed to continue to pursue the
    amounts set out as items 7 and 8 of the August 2010 Claim.

[58]

The
    City disputes the factual assertion that underpins this ground of appeal.  It
    says that items 3 and 6 of the March 2007 Claim are for extended maintenance of
    excavations under Leslie Street and under a CN Rail tunnel but that items 7 and
    8 are for pit delay costs at numerous locations, including Leslie Street and
    the CN Rail tunnel.

[59]

Corpex
dictates that this ground of appeal must fail.  It will be recalled that in
    para. 62 of
Corpex
, the Supreme Court stated:

[O]nce work is complete, a contractor cannot claim in a Court
    of law benefits similar to those which [the notice provision] would have
    guaranteed if he has not himself observed that clause and given the notice for
    which the clause provides.

[60]

Thus,
    even if Clearways factual assertion is correct, Clearway cannot rely on items
    3 and 6 of the March 2007 Claim to save items 7 and 8 of the August 2010
    Claim.  The Notice Provision requires detailed claims in which the items being
    claimed are identified and supported by records.  Items 3 and 6 do not contain
    the information necessary to meet those requirements in respect of items 7 and
    8 of the August 2010 Claim.  Accordingly, items 3 and 6 of the March 2007 Claim
    did not give the notice required by the Notice Provision such that Clearway can
    rely on them to proceed with its claims in items 7 and 8 of the August 2010
    Claim.

Issue 5:
No
    Complaint by the City in respect of the Date of Delivery of the March 2007
    Claim

[61]

This
    ground of appeal rests on the timing of the March 2007 Claim, which Clearway
    delivered to the City more than 30 days after completion of the work affected
    by the flood.

[62]

Clearway
    contends that as the City did not raise any issue with respect to the timing of
    the March 2007 Claim, it waived compliance with the Notice Provision or,
    alternatively, it varied the terms of the Contract by this conduct.  On the
    basis of either waiver or variation of contract, Clearway submits, the City
    cannot rely on the timing component of the Notice Provision to bar the August
    2010 Claim.

[63]

The
    Supreme Court of Canada provides guidance on the doctrine of waiver in
Saskatchewan
    River Bungalows Ltd. v. Maritime Life Assurance Co.
,
[1994] 2 S.C.R. 490.  In paragraphs 19,
    20 and 24, it lays down the following.  Waiver occurs when one party to a
    contract (or proceeding) takes steps that amount to foregoing reliance on some
    known right or defect in the performance of the other party.  It will be found
    only where the evidence demonstrates that the party waiving had (1) a full
    knowledge of the deficiency that might be relied on and (2) an unequivocal and
    conscious intention to abandon the right to rely on it.  The intention to
    relinquish the right must be communicated.  Communication can be formal or
    informal and it may be inferred from conduct.  The overriding consideration in
    each case is whether one party communicated a clear intention to waive a right to
    the other party.

[64]

There
    is nothing in Clearways affidavit material that meets the requirement that the
    City communicated an unequivocal and conscious intention to abandon its right
    to rely on the Notice Provision or to otherwise waive strict compliance with
    its terms.  Indeed, Clearway did not assert that it had any such belief. 
    Accordingly, there is no factual basis to support this submission.  On that
    basis alone, this ground of appeal must fail.

[65]

Two
    other arguments advanced on this ground of appeal warrant comment.  The first
    is Clearways argument, based on the decision of this court in
Colautti
    Construction Ltd. v. Ottawa
(
City
    of
)
(1984), 46 O.R. (2d)
    236, that the City varied the terms of the Contract by its conduct such that it
    cannot rely on the timing component of the Notice Provision.

[66]


Colautti
    Construction
is a very different case from the present one.  In
Colautti
    Construction
, the plaintiff contractor entered into a contract with the
    defendant city for the construction of a sanitary sewer.  The contract
    stipulated that written authorization was required for additional charges. 
    Nonetheless, at various different times over the course of the project, the
    contractor billed the city for significant extra charges and the city paid
    them, despite the absence of written authorization.  This court held that the
    parties had varied the terms of the contract by their conduct and the city
    could not rely on the strict provisions of the contract to escape liability for
    further additional costs.

[67]

In
    the present case, there is no pattern of conduct by the parties over the course
    of the Contract demonstrating that they did not intend to be bound by the
    Notice Provision.  Far from ignoring the relevant provisions in the Contract,
    the parties acted in compliance with its terms.  GC 3.14.03.01 required
    Clearway to give notice of any situation that might lead to a claim for
    additional payment.  The affidavit evidence shows that Clearway did this. 
    Further, as we have seen, the Notice Provision required Clearway to give a
    detailed claim after completion of the work affected by the situation. 
    Clearway did that, by delivering its March 2007 Claim.  As for the City, GC
    3.14.03.05 required that it advise Clearway, in writing, within 90 days of
    receiving the detailed claim, of its opinion of the validity of the claim. 
    This the City did by means of its letter dated April 4, 2007, which denied the
    March 2007 Claim.  There is no pattern of conduct by the parties that had the
    effect of varying the terms of the Contract.

[68]

The
    second matter warranting comment is the Citys contention that waiver and
    promissory estoppel are one and the same.  Based on this view, the City
    submitted that Clearway had to meet the test for promissory estoppel enunciated
    by the Supreme Court of Canada in
Maracle v. Travellers Indemnity Co. of
    Canada
, [1991] 2 S.C.R. 50, at para. 13:

The principles of promissory estoppel are well settled.  The
    party relying on the doctrine must establish that the other party has, by words
    or conduct, made a promise or assurance which was intended to affect their
    legal relationship and to be acted on.  Furthermore, the representee must
    establish that, in reliance on the representation, he acted on it or in some
    way changed his position.

[69]

The
    Supreme Court decided
Saskatchewan River Bungalows
a mere three years
    after
Maracle
.  It did not conflate or equate the requirements for
    waiver and promissory estoppel in those two cases.  Rather, as has been seen,
    it articulated different requirements for each doctrine.  Indeed, at para. 18
    of
Saskatchewan River Bungalows
, after acknowledging that waiver and
    promissory estoppel are closely related, the Supreme Court expressly declined
    to determine how and whether the two doctrines should be distinguished. 
    Instead, it decided the appeal based on waiver, because that is how the
    parties [had] chosen to frame their submissions.

[70]

There
    has been much speculation, both judicial and academic, on whether waiver and
    promissory estoppel are essentially the same thing, with the sole or primary
    difference being that waiver developed as a common law doctrine whereas
    promissory estoppel arose in equity.
[4]
That determination awaits the proper case, one in which it is squarely raised
    and fully argued. Following the lead of the Supreme Court, I would decide this
    ground of appeal based on waiver and variation, as that is how Clearway framed
    the issue.  I would add, however, that if the doctrine of promissory estoppel
    is in play, my conclusion that Clearway has failed to establish the necessary
    evidentiary basis is reinforced because there is no evidence of detrimental
    reliance.

DISPOSITION

[71]

Accordingly,
    I would dismiss the appeal, with costs to the City in the agreed-on amount of
    $5,000, inclusive of disbursements and applicable taxes.

Released: September 11, 2012 (E.E.G.)

E.E. Gillese
    J.A.

I agree R.G. Juriansz J.A.

I agree G.J. Epstein J.A.




Appendix A

GC 3.14 Claims, Negotiations, Mediation

GC 3.14.01 Continuance of the Work

.01     Unless the Contract has been terminated or completed, the
    Contractor shall in every case, after serving or receiving any notification of
    a claim or dispute, verbal or written, continue to proceed with the Work with
    due diligence and expedition.  It is understood by the parties that such action
    will not jeopardize any claim it may have.

GC 3.14.02 Record Keeping

.01     Immediately upon commencing work which may result in a claim,
    the Contractor shall keep Daily Work Records during the course of the Work,
    sufficient to substantiate the Contractors claim, and the Contract
    Administrator will keep Daily Work Records to be used in assessing the
    Contractors claim, all in accordance with clause
GC
    8.02.07
, Records.

.02     The Contractor and the Contract Administrator shall reconcile
    their respective Daily Work Records on a daily basis, to simplify review of the
    claim, when submitted.

.03     The keeping of Daily Work Records by the Contract Administrator
    or the reconciling of such Daily Work Records with those of the Contractor
    shall not be construed to be acceptance of the claim.

GC 3.14.03 Claims Procedure

.01     The Contractor shall give oral notice to the Contract
    Administrator of any situation which may lead to a claim for additional payment
    immediately upon becoming aware of the situation and shall provide written
    notice to the Contract Administrator of such situation or of any express intent
    to claim such payment, within seven days of the commencement of any part of the
    work which may be affected by the situation or will form part of the claim.

.02     Not used.

.03     The Contractor shall submit detailed claims as soon as
    reasonably possible and in any event no later than 30 Days after completion of
    the work affected by the situation.  The detailed claim shall:

a)

identify
    the item or items in respect of which the claim arises;

b)

state
    the grounds, contractual or otherwise, upon which the claim is made; and

c)

include
    the Records maintained by the Contractor supporting such claim.

In
    exceptional cases the 30 Days may be increased to a maximum of 90 Days with
    approval in writing from the Contract Administrator.

.04     Within 30 Days of the receipt of the Contractors detailed
    claim, the Contract Administrator may request the Contractor to submit any
    further and other particulars as the Contract Administrator considers necessary
    to assess the claim.  The Contractor shall submit the requested information
    within 30 Days of receipt of such request.

.05     Within 90 Days of receipt of the detailed claim, the Contract
    Administrator shall advise the Contractor, in writing, of the Contract
    Administrators opinion with regard to the validity of the claim.

GC 3.14.04 Negotiations

.01     The parties shall make all reasonable efforts to resolve their
    dispute by amicable negotiations and agree to provide, without prejudice, open
    and timely disclosure of relevant facts, information, and documents to
    facilitate these negotiations.

.02     Should the Contractor disagree with the opinion given in
    paragraph
GC 3.14.03.05
, with respect to any part
    of the claim, the Contract Administrator shall enter into negotiations with the
    Contractor to resolve the matters in dispute.  Where a negotiated settlement
    cannot be reached and it is agreed that payment cannot be made on a Time and
    Material basis in accordance with clause
GC 8.02.04
,
    Payment on a Time and Material Basis, the parties shall proceed in accordance
    with clause
GC 3.14.05
, Mediation.

GC 3.14.05 Mediation

.01     If a claim is not resolved satisfactorily through the negotiation
    stage noted in clause
GC 3.14.04
, Negotiations,
    within a period of 30 Days following the opinion given in paragraph GC
3.14.03.05
, and the Contractor wishes to pursue the
    issue further, the parties may, upon mutual agreement, utilize the services of
    an independent third party mediator.

.02     The mediator shall be mutually agreed upon by the Owner and
    Contractor.

.03     The mediator shall be knowledgeable regarding the area of the
    disputed issue.  The mediator shall meet with the parties together and
    separately, as necessary, to review all aspects of the issue.  In a final
    attempt to assist the parties in resolving the issue themselves prior to
    proceeding to arbitration the mediator shall provide, without prejudice, a
    non-binding recommendation for settlement.

.04     The review by the mediator shall be completed within 90 Days
    following the opinion given in paragraph
GC 3.14.03.05
.

.05     Each party is responsible for its own costs related to the use
    of the third party mediator process.  The costs of the third party mediator
    shall be equally shared by the Owner and Contractor.

GC 3.14.06 Payment

.01     Payment of the claim will be made no later than 30 Days after
    the date of resolution of the claim or dispute.  Such payment will be made
    according to the terms of
Section GC 8.0
,
    Measurement and Payment.

GC 3.14.07 Rights of Both Parties

.01     It is agreed that no action taken under this subsection
GC 3.14
, Claims, Negotiations, Mediation, by either
    party shall be construed as a renunciation or waiver of any of the rights or
    recourse available to the parties, provided that the requirements set out in
    this subsection are fulfilled.





[1]
The Notice Provision allows for time extensions of up to 90 days in
    exceptional cases, with approval in writing from the Contract Administrator. 
    As the August 2010 Claim greatly exceeds either time limit, for ease of
    reference I refer only to the 30-day limit.



[2]

Corpex
,
at para. 31.



[3]
See pp. 101-103.



[4]
See, for example,
Re Med-Chem Health Care Inc.
, [2000] O.J. No. 4009 (S.C.);
HREIT Holdings 45 Corp. v. R.A.S. Food Services (Kenora) Inc.
(2009),
    80 R.P.R. (4th) 64, at paras.
57-61 (Ont. S.C.);
Re Tudale
    Explorations Ltd. and Bruce et al.

(1978), 20 O.R. (2d) 593, at pp.
    595-99 (H. Ct. J.);
Petridis v. Shabinsky
(1982), 35 O.R. 92d) 215 (H.
    Ct. J.);
Laurie v. Jones
, 2004 NSSC 87, at para. 14, 223 N.S.R. (2d)
    129. For academic consideration of this matter see, for example, S.M. Waddams,
The
    Law of Contracts
, 6th ed. (Toronto: Canada Law Book, 2010), at paras.
    195-206; Angela Swan,
Canadian Contract Law
, 2d ed. (Markham, Ont.:
    LexisNexis, 2009), at paras. 2.198-255; John D. McCamus,
The Law of
    Contracts
(Toronto: Irwin Law, 2005), at pp. 275ff.


