Canadian Design-Build Institute Risk Management Committee

 

The Fine Art of Limiting Liability

By Steve Vorbrodt, Singleton Urquhart LLP

Almost all professionals these days provide their clients with a written engagement letter – if they don’t, they should. This includes all sorts of professionals including architects and engineers as well as design-builders. Many design firms try to limit their exposure in the event of errors or omissions by including limitation of liability clauses in their engagement letters and / or contract terms. However, the professionals who rely on them may not always be as protected as they think they are. Read more


Contract Warranties

By Norm Streu, LMS Reinforcing Steel Group, and Christopher Hirst, Alexander Holburn Beaudin + Lang LLP

Buried near the end of most construction contracts are contractual warranties. These clauses rarely receive much attention or comment but, a recent court decision has highlighted the risks inherent in these common clauses. In Greater Vancouver Water District (GCWD) v. North American Steel and Pipe Ltd., the GVWD contracted with North American to supply steel pipe for a waterworks project. The GVWD and its consultants had prepared the design and specifications for the steel pipe that was to be supplied by North American. In the contract, North American gave two relevant warranties to the GVWD with respect to the steel pipes. First, North American warranted that the steel pipes would conform to the specifications; and second, that they would be “free from all defects arising at any time from faulty design in any part of the Goods.” Read more


Is It Over Yet? A Summary of Provincial Limitation Periods

By Nolan Heuchert, Wylie-Crump Ltd. and Paul Stocco, Brownlee LLP

During the CDBI design-build tutorials across Canada, we are frequently asked about the limitation periods for legal actions in the various provinces. Unfortunately, there is no one common rule across Canada. Many of the provinces have undertaken a review of their limitation legislation and changes are happening, albeit slowly. As a general trend, provinces are enacting a 2-year limitation period in respect of a known cause of action, along with a 10 or 15-year ultimate limitation period. Read more


Avoiding Pay When Paid Pain

By Paul Stocco, Brownlee LLP

There is an old saying that “cash is king”. Adapted for challenging economic times, the saying should be “cash flow is king”. Ensuring that accounts receivable are paid in a timely way, and having enough cash flow to pay accounts payable, are prime concerns for any business. Adequate cash flow is especially important for the construction industry where the flow of money from the top to the bottom of the contract pyramid determines the success, or failure, of a construction business. Read more


What’s on the Horizon Part II?

By Paul Stocco, Brownlee LLP

In the case of Re Horizon Earthworks Ltd., the Alberta Court of Queen’s Bench attempted to clarify the entitlement of competing claimants to monies “earned but not yet paid” by the MD of Greenview (“MD”) to an insolvent contractor (“Horizon”). Like many construction contracts that allow an owner to pay an unpaid subcontractor directly upon receipt of notice of an unpaid account, the MD’s contract with Horizon allowed the MD to pay unpaid subcontractors of Horizon directly. Read more


BC Supreme Court Addresses Interesting and Novel COC Policy Issues

By R. Glen Boswall, Clark Willson LLP

In the recently decided case of Acciona Infrastructure Canada Inc. v. Allianz Global Risks US Insurance Co., the BC Supreme Court addressed some interesting and novel issues concerning Course of Construction (COC) insurance. Particularly, the Court,

  • clarified the distinction between excluded defects and covered resulting physical damage within a building component;
  • dealt with a novel argument that fortuity was not required to trigger coverage under typical COC policy wording; and
  • was the first in Canada to interpret a design and workmanship exclusion wording that is becoming more common in COC policies.

Read more


When Is a Contract a Contract?

By John R. Singleton, Singleton Urquhart

The lack of proper contracting practices has always been a concern in the construction industry, particularly for professional consultants, but also for builders, trades and developers. Although there has been a marked improvement in understanding the need for a proper contract with one’s client, the ability to manifest that need is still lacking in many corners. Understanding what a contract is and why it is so important will hopefully encourage design- builders to pay closer attention to this aspect of their practices. Read more


The Extent of a Surety’s Obligation under a Performance Bond: An AXA to Grind

By Paul Stocco, Brownlee LLP and Eleni Loutas

Despite the wording set out in a performance bond, the extent of a Surety’s obligations to an Owner/Obligee, in the event of a default by the Principal, is unclear. There are two perspectives and each one is represented by a decision of an appellate court.

On the one hand, the Ontario Court of Appeal has held, in the Whitby Landmark Development Inc. v Mollenhauer Construction Limited (“Whitby”) case, that a performance bond Surety is responsible for all of the Principal’s obligations/liabilities under the bonded contract, not just those related to the costs of completing the physical construction e.g. Principal’s potential liability for liquidated damages for delay payable to Obligee. By contrast, the Saskatchewan Court of Appeal, in the Lac La Ronge Indian Band v Dallas Contracting Ltd. (“Lac La Ronge”) case, has held that the scope of a Surety’s obligations under a performance bond are limited to completion of the physical work solely. Read more


Avoiding the Pitfalls of Social Media

By Paul V. Stocco, Brownlee LLP

Technology has changed how construction companies perform their work. Social media has changed how construction companies do business. Technology facilitates instantaneous exchange of information. While this can be beneficial, there are also some risks that construction firms must manage effectively in order to avoid the pitfalls created by social media. Construction firms face a new set of challenges due to the proliferation of social media. Read more


Contractor’s Warranty Triggered by Defect Arising from Owner’s Specifications

By R. Glen Boswall, Clark Wilson LLP

The recent decision of the British Columbia Court of Appeal in Greater Vancouver Water District v. North American Pipe & Steel Ltd. serves as a warning to contractors about the risks taken when they commit to follow design specifications while also providing an unqualified warranty against design defects. Read more


Coverage of Construction Deficiencies

By R. Glen Boswall, Clark Wilson LLP

In an April, 2012 ruling in Lombard General Insurance v. Canadian Surety Company, the British Columbia Supreme Court (“BCSC”) analyzed and applied the “particular part” restriction within the typical CGL policy faulty work exclusion (the “particular part work exclusion”). In doing so, the BCSC followed the path set down by the Supreme Court of Canada (SCC) in Progressive Homes Ltd. v. Lombard General Insurance Company of Canada. Read more


What’s on the Horizon?

By Paul Stocco, Brownlee LLP

At the time that Horizon was assigned into bankruptcy, it had several incomplete projects throughout Alberta including a project for the Municipal District of Greenview (“Greenview”). As part of the contract with Greenview, Horizon was required to post a Performance Bond and Labour and Material Payment Bond each in the amount of $761,662.22. Prior to delivering the said bonds, Horizon had executed an indemnity agreement with its bonding company, namely, Western Surety. Read more


When Is a Design Faulty

By John R. Singleton, Q.C., Singleton Urquhart Legal Counsel

Those undertaking design-build projects must become educated to the potential risks that they face in taking on the role as the “design-builder”, and being the sole contract holder to an owner with responsibility for both construction and design. Whilst the common insurance products available for project address many of the identified physical perils to a project, there are certain specific insurance policy exclusions which should be reviewed and understood. A common focus is upon the “Faulty Design Exclusion” which is found in many property insurance policies, and similar Builders Risk insurance policies. A common Faulty Design Exclusion will exclude coverage for: “cost of making good faulty or defective workmanship, material or design…” Read more


Design-Builder Contractors and the Need for Professional Liability Insurance

By Nolan Heuchert, Wylie-Crump Limited

There was a time when there was a clear distinction between the contractors who performed the “work” and the architects and engineers who performed the “professional services.” Their respective roles and responsibilities were relatively clear and separated by distinct contractual arrangements. Today, more often than not, the general contractor of the past is today’s construction manager or design-builder. The owner’s project architects and engineers may now be the contractor’s design consultant or joint venture partner. Read more


2010 Important “BIM-formation”

By Paul Stocco, Brownlee LLP

Technology has had a tremendous impact on construction. Each new technological advance in construction machinery and construction products influences how a construction project will look once completed. Along with changes to how construction projects are built has come a change in how construction projects are designed. Building Information Modeling (BIM) promises to revolutionize the way construction projects are conceptualized, designed, constructed and ultimately operated/maintained. This new and exciting design model has many advantages, but as with any innovation, there are risks. Read more


Hands off My Holdback

By Paul Stocco, Brownlee LLP – Article prepared with the assistance of Kristjana Kellgren, Associate, Brownlee LLP.

These are turbulent times for the construction industry. While there are signs of a modest economic recovery, there are also many warning signs about how fragile the recovery really is. Some of the foremost concerns of the industry are the availability of credit and maintaining a positive cash flow. If contactors are experiencing difficulties in operating their businesses, this has an impact on the industry as a whole–work on projects can start to slow down, contractual defaults can increase, and the spectre of contractor insolvency looms. Another development often seen in times of economic slowdown is the increased activity of the Canada Revenue Agency (“CRA”) Read more


Coverage under CGL Policies for Construction Defects

By John R. Singleton, Q.C., Singleton Urquhart Legal Counsel

Much has been written and said by both legal commentators and the judiciary about the coverage available to general contractors and their subcontractors under general liability policies for claims brought against them for “property damage” on projects they have worked on. The issue has arisen not when there are claims for “property damage” to property external to the project in question, but when the claim is for the cost of repairing portions of the project itself as a result of faulty workmanship or materials supplied by a general contractor or its contractors. Read more


Requests for Proposals for Design-Build Projects: Identifying and Mitigating Select Legal Risks

By Denis Chamberland, Aird & Berlis LLP

It is widely accepted that low-bid procurement – which relies on a single measure, cost – is not the optimal procurement methodology for design-build projects. Owners who prefer such a commodities-based approach to competition fail to take advantage of several attributes that contractors may bring to the equation, such as quality and performance. As a result, the Request for Proposals (RFPs) has become the procurement methodology of choice for services as complex as design and construction. Indeed, most owners welcome the opportunity to review proposals that are based on their own distinctive needs, and where they are more likely to arrive at the best combination of value. Read more


Design-Build Problems – Design Growth

By Steve Panciuk, P.Eng., Assistant Vice-President, Construction Claims Encon Group Inc.

This Bulletin was prepared following identification of a source of new claims being reported involving design-build projects where the contractor is claiming costs associated with “design growth.” These claims develop as a result of design changes between preliminary drawings and construction drawings. The Bulletin deals with the contractor-led (consultant contracts with contractor) guaranteed maximum price design-build projects. It is intended to assist engineers/architects avoid, or at the very least reduce, the extent to which they find themselves exposed to such claims. Read more


Employee Fraud: Keeping the “F” Word off Your Construction Site

By David Miachika, Ross McGowan and Robert Dawkins  Borden Ladner Gervais LLP

Fraud is one of those words that all people seem to know and use but few seek to clearly define. It encompasses is a broad category of deceptive behaviour designed to benefit the fraudster, or a third party, to the detriment of the target of the deception. Its scope is limited only by the ingenuity of people looking for the easy dollar. Read more


Sustainability – Implications for Design Professionals

By Derek Holloway, Senior Vice-President, Architects and Engineers ENCON Group Inc.

There is a growing trend toward the construction of “green” or “sustainable” buildings. While to date most of these buildings have been constructed for public sector clients as models for others to see, or for private sector companies wishing to demonstrate their corporate social and environmental responsibility, there is some momentum for the expansion of the sustainability movement. Read more


Project-specific Professional Liability For Design-Build Projects

By Simon Fenn, CDBI Risk Management Committee Chairman 2001

On a typical design-build project, there is no shortage of professional liability insurance. Many times, perhaps more so in the USA than in Canada, the contractor, the design firm, the design sub-consultants and some sub-contractors all carry professional coverage. It may seem everyone is protected in the event of a loss. Read more

Members:
  • Con-Tech General Contractors Ltd.
  • ISL Engineering and Land Services Ltd.
  • Allen entrepreneur général
  • Plainsman Companies
  • Construction Cogela Inc.
  • Habitat Construction Matane (1986) inc.
  • Cosoltec inc.
  • Camdon Construction Ltd.
  • Lainco Inc.
  • North Shore Engineering Inc.
  • EBC Inc.
  • Capital Decisions Inc.
  • Truest Quantity Surveyors
  • Saint Joseph Developments Ltd.
  • Wiebe’s Steel Structure
  • Deltro Group Ltd.
  • CH2M Hill Canada Limited
  • Global Mechanical Ltd.
  • Saskatchewan Construction Association
  • Marco Maritimes Limited
  • Stuart Olson Construction Inc.
  • PME Inc. (EllisDon Group of Companies)
  • CAP Management Services Ltd
  • Greystone Project Management Inc.
  • EllisDon Corporation
  • Bale Project Consulting
  • Westview Engineering Ltd.
  • M & G Reno
  • Cowan Insurance Group
  • Corporation of the Town of Newmarket
  • Tech-Line Design
  • Broccolini Construction (Ottawa) Inc.
  • EllisDon Construction Services Inc.
  • Michael + Clark Construction
  • Armtec LP
  • GeoSolv Design/Build Inc.
  • BC Comfort Air Conditioning Limited
  • Onespace Unlimited Inc.
  • Elgabry Engineering Inc.
  • Miller Paving Northern
  • Venerino V.P. Panici Architects Inc.
  • Grand Valley Construction Association
  • Stuart Olson Construction Inc.
  • AMICO Design Build Inc.
  • ATCO Structures & Logistics Ltd.
  • Lidio Romanin Construction Company Limited
  • Collaborative Structures Limited
  • Mark V Wilson Builder/Contractor Co. Ltd.
  • SpaceMakers Construction Services Inc.
  • Hidi Rae Consulting Engineers Inc.
  • J.W. Lindsay Enterprises Limited
  • Concrete Floor Contractors Association
  • Ryfan Electric
  • COWI North America Ltd.
  • Birnie Electric Limited
  • Veolia Water Solutions & Technologies Canada
  • Morsky Management Group Ltd.
  • SPEC Construction Incorporated
  • SAJO Inc.
  • GDB Constructeurs
  • Collings Johnston Inc.
  • Golder Associates Ltd.
  • RPM Consulting Services Inc.
  • P.M. Associates Ltd.
  • R. J. Burnside & Associates Limited
  • Marquardt Mechanical
  • H.H. Angus & Associates Ltd.
  • Key West Engineering ltd.
  • Bouygues Building Canada Inc.
  • Salter Pilon Architecture Inc.
  • Erith Project Consultants Inc.
  • Geo. A. Kelson Company Ltd.
  • Schoeck Canada Inc.
  • Western Surety Company
  • Humboldt Electric Ltd.
  • CIMA Canada Inc.
  • NCC Development Limited
  • Qikiqtaaluk Corporation
  • VVI Construction Ltd.
  • Associated Engineering
  • StructureCraft Builders Inc.
  • Copcan Contracting Ltd.
  • Klohn Crippen Berger Ltd.
  • Simpson Building Contractors Ltd.
  • The University of Toronto
  • Omega & Associates Engineering Ltd.
  • Greyback Construction Ltd.
  • Town of Caledon
  • MacPherson Leslie & Tyerman LLP
  • Whitemud Ironworks Group
  • Sika Canada Inc.
  • Marshall – Lee Construction Corp.
  • R.V. Aderson Associates Limited
  • Carlyle & Associates
  • PNR Railworks Inc.
  • Royal Bank of Canada
  • Uel McFall Consulting Inc.
  • DIALOG
  • Metro Vancouver
  • Flynn Canada Ltd.
  • Garritano Bros. Ltd.
  • Carillion Canada Inc.
  • ONPA Architects
  • Canam Group
  • Neilson Architecture Ltd.
  • Smith + Andersen Consulting Engineering
  • Wilhelm Construction Services Inc.
  • Eldico Group Inc.
  • SNC Lavalin Construction (Ontario) Inc.
  • London & District Construction Association
  • Marshall Tittemore Architects
  • Marshall Tittemore Architects
  • Autodesk
  • Scott Construction Ltd.
  • B&B Heavy Civil Construction
  • verTerra Corp.
  • Morrison Hershfield Limited
  • Harvey Architecture
  • Trow Project Services Inc.
  • M&L General Contracting Ltd.
  • Hall Constructors
  • Ausenco Sandwell
  • Colliers International Toronto
  • City of Saskatoon
  • Integrated Designs Inc.
  • Wilson M. Beck Insurance Services (Kelowna) Inc.
  • Stuart Olson Dominion Construction Ltd.
  • Stantec Consulting Limited
  • Boffo Building Inc.
  • Beaudoin 3990591 Canada Inc.
  • Dora Construction
  • Architecture49 Inc.
  • Bel-Con Design-Builders Ltd.
  • City of Kelowna
  • R.F. Binnie & Associates
  • Graham Group Ltd.
  • Kasian Architecture
  • BBS Construction (Ontario) Ltd.
  • Dowland Contracting Ltd.
  • Western Industrial Contractors Ltd.
  • Wylie-Crump Limited
  • Encon Group Inc.
  • Redwood Construction Ltd.
  • Guy Architects
  • DFS Design Firm Seminars
  • Brownlee LLP
  • Walker Environmental Group Inc.
  • Brock University
  • Coldbox Builders
  • All-Win Contracting Ltd.
  • Lalande & Doyle Architects
  • Urban Electrical Contractors
  • Lloyd Sadd Insurance
  • GeoXperts
  • Mr. Patrick Glorieux
  • KMA Contracting Inc.
  • Ledcor Construction Limited
  • C&H Fire Suppression Systems Inc.
  • E.S. Fox Ltd.
  • Butler Buildings (Canada)
  • Bing Thom Architects
  • Scott Builders Inc.
  • Urban Systems Ltd.
  • Partnerships BC
  • Pomerleau Inc.
  • ISL Engineering and Land Services Ltd.
  • Bockstael Construction (1979) Ltd.
  • Omicron Architecture Engineering Construction Ltd.
  • Hatch
  • Stephenson Engineering Ltd.
  • McElhanney Engineering Services Ltd.
  • Ira McDonald Construction Limited
  • Infrastructure Ontario
  • Fowler Bauld & Mitchell Ltd.
  • G.J. Cahill & Company Limited
  • CEI Architecture Planning Interiors
  • Seagate Construction Inc.
  • Patrick S.G. Martins
  • Massicotte Construction Ltd.
  • Caspian Construction Inc.
  • Taplen Construction Inc.
  • WSP Canada Inc.
  • Urbacon
  • L. J. Barton Mechanical Inc.
  • McCaine Electric Ltd.
  • Iredale Group Architecture
  • McDonald Bros. Construction
  • CANA Construction Ltd.
  • McLean Young Construction Ltd.
  • Kemway Contractors Ltd.
  • Hemisphere Engineering Inc.
  • Premiére Design-Construction Inc.
  • Sprint Insight Inc.
  • First Gulf Inc.
  • Continental Automated Building Association
  • Alberici Constructors Ltd.
  • Kasian Architecture Interior Design and Planning Ltd
  • Integrated Building & Design Corporation
  • House Brand Construction Ltd.
  • The Federal Bridge Corporation Limited
  • PricewaterhouseCoopers LLP
  • AMAN Building Corporation
  • Robertson Bright Inc.
  • Chandos Construction Ltd.
  • Reinders + Rieder Ltd.
  • Con-Drain Company (1983) Ltd.
  • B + H Architects
  • Cooper Construction Limited
  • Kenaidan Contracting Ltd.
  • St Marys Cement Inc.
  • Stuart Olson Dominion Construction Ltd.
  • Stuart Olson Dominion Construction Ltd
  • KTA Structural Engineers Ltd.
  • CBCL Limited, Consulting Engineers
  • KGS Group
  • Rosati Construction Inc.
  • Moriyama & Teshima Architects
  • Reid & Deleye Contractors Ltd.
  • Halsall Associates Ltd.
  • Van Alstine Project Management Ltd.
  • WSP Canada Inc.
  • Randall Plumbing & Heating Limited
  • MacLean Construction Ltd.
  • Rambow Mechanical Ltd.
  • Architecture49 Inc.
  • Adjeleian Allen Rubeli Limited Structural Consulting Engineers
  • Bird Construction Company
  • Travelers Guarantee Company of Canada
  • Comstock Canada Ltd.
  • Pro Electric Inc.
  • McKay – Cocker Construction Limited
  • Drycore Electric 2002 Inc.
  • Monteith Building Group Ltd.
  • Guild Electric Limited
  • Botting & Associates Alberta Ltd.
  • Clark Builders
  • Hayman Construction Inc.
  • Parsons
  • Rikjak Projects Inc.
  • Timbro Design Build
  • Miller Paving Limited
  • Colliers Project Leaders
  • Knappett Projects Inc.
  • Stantec Architecture Ltd.
  • Alberta Infrastructure
  • OZZ Electric Inc.
  • Ball Construction Inc.
  • The Guarantee Company of North America
  • Dineen Construction Corporation
  • Ernst Hansch Construction Ltd.
  • Department of National Defence
  • Three Way Builders Ltd.
  • Alliance Energy Ltd.
  • Doran Contractors Limited
  • John G. Davies Architect Incorporated
  • Maple Reinders Constructors Ltd.
  • B.D. Stevens Limited
  • B.A. Blacktop Ltd.
  • PCL Constructors Canada Inc.
  • Olympic Construction Limited
  • Aviva Insurance Company of Canada
  • Farmer Construction Ltd.
  • Wales McLelland Construction
  • Black & McDonald Limited
  • Algonquin College of Applied Arts and Technology
  • Defence Construction Canada
  • Stuart Olson Dominion Construction Ltd.
  • City of Chilliwack
  • Bot Construction Limited
  • Petrela Winter & Associates Insurance Brokers
  • Peter Kiewit Infrastructure Co.
  • Ed Brunet & associÈs inc.
  • Read Jones Christoffersen Ltd.
  • M. Sullivan & Son Limited
  • Revay and Associates Limited
  • MMM Group
  • EllisDon Corporation
  • Marid Industries Limited
  • grc architects
  • Buttcon Limited
  • Aird & Berlis LLP Barristers and Solicitors
  • Aecon Buildings, a division of Aecon Construction Group Inc.