Summary Table of Contents

Preface .......................................................v Table of Contents............................................... xi Table of Cases .................................................xv

Public Contracts in Quebec: A Question of Integrity The New Integrity in Public Contracts Act

Ian Gosselin and Antoine Pellerin ....................................1

Les contrats publics au Qu´ebec : une question d’int´egrit´e La nouvelle Loi sur l’int´egrit´e en mati`ere de contrats publics

Ian Gosselin et Antoine Pellerin .....................................15

A Bought Magistrate: The Conundrum of the Consultant

Jeffrey D. Vallis, Q.C., FCIArb. and Erin Berry ......................... 29

Green Tsunami — Sustainable Construction

Karen Martin ..................................................47

Termination American Style: Handling the Acutely Troubled Construction Project

Stephen A. Hess, Esq. ............................................63

The Law of Estimates and Quantum Meruit in Canadian Small-Scale Building Contracts

Muharem Kianieff ..............................................105

Ontario’s Construction Lien Act: Examining Preservation and Perfection Deadlines in Geographical, Inter-Jurisdictional, and Commercial Contexts

Mark Adrian de Jong, J.D. .......................................133

Index.......................................................167

JCCL - 2013

Table of Contents

Public Contracts in Quebec: A Question of Integrity — The New Integrity in Public Contracts Act

Editor’s Note ................................................ 1

1. PREAMBLE ............................................ 1

2. INTRODUCTION ........................................ 2

3. BACKGROUND ......................................... 2

4. WHAT IS THE AMF? ..................................... 3

5. THE ENTERPRISES CONCERNED ........................... 4

6. AT WHAT POINT IS THE AUTHORIZATION REQUIRED?......... 5

7. WHICH PUBLIC BODIES ARE CONCERNED? .................. 5

8. CONTRACTS SUBJECT TO THE INTEGRITY ACT............... 5

9. THE PROCESS FOR THE ISSUE OF AUTHORIZATIONS .......... 6

10. THE AMF’S DECISION-MAKING PROCESS.................... 7 . 10.1 Automatic Refusal ................................... 7

10.2 Discretionary Refusal................................. 8

10.3 The Right to Present Authorizations....................... 10

11. THE WITHDRAWAL OF AN AUTHORIZATION DURING THE PERFORMANCE OF A CONTRACT .......................... 10

12. PENALTIES IN THE EVENT OF OFFENCES UNDER THE INTEGRITY ACT.................................................. 11

13. REGISTER OF ENTERPRISES INELIGIBLE FOR PUBLIC CONTRACTS ........................................... 12

´(UPAC)................................................ 12

14. THE ROLE OF THE UNITE PERMANENTE ANTICORRUPTION

15. ABOLITION OF THE RESTRICTED LICENCE REGIME UNDER THE BUILDING ACT ......................................... 13

16. CONCLUSION .......................................... 13

Les contrats publics au Qu´ebec : une question d’int´egrit´e — La nouvelle Loi sur l’int´egrit´e en mati`ere de contrats publics

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1. PREAMBULE ........................................... 15

2. INTRODUCTION ........................................ 15

3. MISE EN CONTEXT...................................... 16

4. QUI EST L’AMF? ........................................ 17

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5. LES ENTREPRISES VISEES ................................ 18

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6. LE MOMENT REQUIS POUR DETENIR SON AUTORISATION...... 19

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7. LES ORGANISMES PUBLICS VISES.......................... 19

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8. LES CONTRATS VISES PAR LA LOI SUR L’INTEGRITE.......... 19

xii CCCL JOURNAL 2013 ´

9. LE PROCESSUS DE DELIVRANCE DES AUTORISATIONS ........ 20

10. LE PROCESSUS D´....................

ECISIONNEL DE L’AMF 21

10.1 Le refus automatique ................................. 21

10.2 Le refus discr´etionnaire ............................... 23

10.3 Le droit de pr´esenter des observations ..................... 25

11. LE RETRAIT D’UNE AUTORISATION LORSQU’UN CONTRAT EST EN COURS D’EXECUTION................................. 25

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´`L’INTEGRITE........................................... 25

12. LES P ´E S EN CAS D’INFRACTIONS

ENALIT A LA LOI SUR

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13. LE REGISTRE DES ENTREPRISES NON ADMISSIBLES AUX CONTRATS PUBLICS..................................... 27

14. LE R ˆE PERMANENTE ANTICORRUPTION

OLE DE L’UNIT ´(UPAC)................................................ 27

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15. L’ABOLITION DU REGIME DE LA LICENCE RESTREINTE PREVUE

A LA LOI SUR LE Bˆ 28

ATIMENT..............................

16. CONCLUSION .......................................... 28

A Bought Magistrate: The Conundrum of the Consultant

Editor’s Note ................................................ 29

1. INTRODUCTION ........................................ 30

2. THE CONSULTANT’S CONUNDRUM IN CANADA .............. 33

3. THE CANADIAN RESPONSE ............................... 39

4. AN AMERICAN RESPONSE ................................ 40

5. AN INTERNATIONAL RESPONSE ........................... 41

6. THE UNRESOLVED CONUNDRUM .......................... 42

7. CAN THE CONUNDRUM BE RESOLVED?..................... 43

8. CONCLUSION .......................................... 46

Green Tsunami — Sustainable Construction

Editor’s Note ................................................ 47

1. INTRODUCTION ........................................ 47

2. OVERVIEW OF LEED CANADA............................. 48

3. GREEN BUILDING LITIGATION ............................ 50

3.1 U.S. Green Building Litigation .......................... 51

3.2 Canadian Green Litigation ............................. 56 4 ISSUES RELATING TO LEED CERTIFICATION ................. 58

5. ISSUES FOR DESIGN PROFESSIONALS....................... 58

6. ISSUES FOR CONTRACTORS............................... 60

7. CONCLUSION .......................................... 61

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Termination American Style: Handling the Acutely Troubled Construction Project

Editor’s Note ................................................ 63

1. INTRODUCTION ........................................ 64

2. ANTICIPATORY REPUDIATION: AN OVERVIEW ............... 65

2.1 What Constitutes an Anticipatory Repudiation? ............... 66

2.1.1 Overt Repudiation ............................. 67

2.1.2 Implicit Repudiation............................ 69

2.1.3 Repudiation Arising from Difference in Contract Interpretation................................. 70

2.1.4 Conclusion .................................. 72

2.2 Demanding Adequate Assurance of Performance .............. 73

2.2.1 Demand for Adequate Assurance of Performance ....... 73

2.2.2 Response.................................... 74

2.3 Retraction of Repudiation.............................. 75

2.4 Remedies ......................................... 75

2.4.1 Suspension of Performance ....................... 76

2.4.2 Termination.................................. 76

2.4.3 Claim for Breach.............................. 76

2.4.4 Nonbreaching Party’s Obligation to Mitigate ........... 77

2.5 Related Issues ...................................... 77

2.5.1 Effect of Notice and Demand for Cure Clause .......... 77

2.5.2 Clause Requiring Performance Pending Dispute Resolution 79

2.5.3 Waiver ..................................... 80

2.5.4 Statute of Limitations........................... 81

2.6 Summary of Anticipatory Repudiation ..................... 82

3. TERMINATION—AN OVERVIEW........................... 82

3.1 Basic Legal Principles ................................ 83

3.1.1 Sufficiency of Grounds for Termination .............. 83

3.1.2 Cumulative Effects of Several Breaches .............. 85

3.1.3 Cardinal Change .............................. 85

3.1.4 Insecurity and Anticipatory Repudiation .............. 86

3.1.5 Waiver and Estoppel ........................... 86

3.2 The Economic Consequences of Termination Decisions ......... 88

3.2.1 Owner’s Damages — Termination Justified ............ 88

3.2.2 Owner’s Liability — Termination Improper ............ 89

3.2.3 Contractor’s Damages — Termination Justified ......... 90

3.2.4 Contractor’s Liability — Termination Improper ......... 91

3.2.5 Attorneys’ Fees ............................... 92

3.2.6 Alternative — Performing in the Face of Breach and Reserving Rights to Claim Damages ................ 92

3.3 Modeling the Economics of Termination ................... 92

3.3.1 Probability of Success on a Claim for Material Breach .... 93

3.3.2 Value of Success .............................. 93

3.3.3 Probability of Loss............................. 94

xiv CCCL JOURNAL 2013

3.3.4 Cost of Loss ................................. 94

3.3.5 Value of Moving Forward........................ 94

3.3.6 Attorneys’ Fees ............................... 95

3.3.7 Finalizing the Economic Model.................... 96

3.3.8 Limitations on Use of the Economic Model ........... 98

3.4 Investigating the Model’s Assumptions..................... 98

3.4.1 Economic Balancing is the Key to Any Termination Decision, as the Only Factors Are Quantifiable Economic Factors ..................................... 99

3.4.2 Liability Estimates Are Reasonably Certain ............ 99

3.4.3 Prospective Damage Figures Are Reasonably Certain ..... 100

3.4.4 The Owner and Contractor Have an Infinite Amount of Money to Pay a Judgment........................ 100

3.4.5 The Contractor Can Finance the Remainder of Construction 100

3.4.6 The Contractor Cannot Otherwise Employ its Crew ...... 101

3.4.7 Not Everyone Has the Same Level of Risk Aversion ..... 101

3.4.8 The Surety’s Assumption of the Contract Will Mitigate the Owner’s Risk................................. 102

3.4.9 A Completion Contractor Will Be Easy to Find ......... 102

3.5 Contractor-Subcontractor Terminations ..................... 102

3.5.1 Alternative to Terminations....................... 102

3.5.2 Contractor’s Termination of Subcontractors Necessitated by Termination of General Contracts .................. 103

4. CONCLUSION .......................................... 103

The Law of Estimates and Quantum Meruit in Canadian Small-Scale Building Contracts

Editor’s Note ................................................ 105

1. INTRODUCTION ........................................ 106

2. THE HISTORICAL DEVELOPMENT OF THE LAW OF ESTIMATES AND QUANTUM MERUIT ................................. 108

2.1 Business Realities in Building Contracts.................... 108 2,2 The Action for Quantum Meruit ......................... 110

2.3 Quantum Meruit and the Unjust Enrichment Principle .......... 112

3. CURRENT PRACTICES IN THE CONSTRUCTION INDUSTRY AS THEY RELATE TO THE USE OF CONTRACTS AND CLAIMS FOR QUANTUM MERUIT ..................................... 116

3.1 Contractual Variations and Risk Allocation .................. 116

3.1.1 Fixed Price / Lump Sum Contracts ................. 116

3.1.2 Unit Price Contracts............................ 116

3.1.3 Cost-Plus Contracts ............................ 117

3.2 The Definition and Nature of “Extras” in a Building Contract ..... 117

3.3 The General Law of Estimates .......................... 120

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4. RECENT CANADIAN JUDICIAL DECISIONS THAT PERTAIN TO THE ROLE OF ESTIMATES IN BUILDING CONTRACTS .......... 123

4.1 Pre-2006 Jurisprudence................................ 123

4.2 Post-2006 Jurisprudence ............................... 125

4.3 Estimates and the Claim in Quantum Meruit................. 126

5. THE NEED FOR A NEW BRIGHT LINE RULE .................. 128

6. CONCLUSION .......................................... 131

Ontario’s Construction Lien Act: Examining Preservation and Perfection Deadlines in Geographical, Inter-Jurisdictional, and Commercial Contexts-The Case for Extended Deadlines

Editor’s Note ................................................ 133

1. INTRODUCTION AND ABSTRACT........................... 134

1.1 Preliminary Note: How Legislation in Various Jurisdictions Will Be Used and Cited ..................................... 135

2. BACKGROUND INFORMATION............................. 135

2.1 The Construction Lien: A Working Definition ................ 136

2.2 Enforcing the Lien: Procedural Hurdles .................... 136

2.3 Time Limits for Enforcing a Construction Lien: The Concepts of Preservation and Perfection............................. 136

2.3.1 Preservation.................................. 137

2.3.2 Perfection ................................... 138

2.4 A Summary of the Process: Lien Arises; Preservation; Perfection 138

3. THE ISSUE: ONTARIO’S PRESERVATION AND PERFECTION TIME LIMITS................................................ 139

4. THE CURRENT STATE OF AFFAIRS: CONSTRUCTION LIEN TIMING IN ONTARIO AND NORTH AMERICA........................ 139

4.1 The Raw Data: Preservation and Perfection Periods in Canada and the United States .................................... 139

4.2 Observations on the Data: Trends in Preservation and Perfection Time Limits in North America .......................... 155

4.2.1 The Preservation Time Period Across North America ..... 156

4.2.2 The Perfection Time Period Across North America ...... 158

4.2.3 The Maximum Time Period for Preservation and Perfection Across North America .......................... 159

4.2.4 A Note on the Spatial Autocorrelation of Lien Deadlines in North America................................ 160

4.2.5 Localized Trends: Ontario and its Neighbours .......... 161

4.3 Interim Conclusions: What Does the Data Tell Us? Ontario’s Deadlines in Context ................................. 162

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    1. ONTARIO’S CONSTRUCTION LIEN DEADLINES IN THE COMMERCIAL CONTEXT ................................. 163
    2. 5.1 Lien Deadlines, Standard Payment Periods, and “Pay-When-Paid” Clauses........................................... 163
    3. 5.2 Lien Deadlines and Professional Relationships ............... 164
  1. CONCLUSIONS: RECOMMENDING INCREASED PRESERVATION AND PERFECTION TIME PERIODS .......................... 165

Appendix 1 — List of Provincial and Territorial Construction Lien Statutes .... 166