Miclex Construction Inc v North Central Co-Operative Association Ltd, 2023 ABKB 46

Court of King’s Bench of Alberta Citation: Miclex Construction Inc v North Central Co-Operative Association Ltd, 2023 ABKB 46 Date: 20230124 Docket: 2003 01344 Registry: Edmonton Between: Miclex Construction Inc Plaintiff - and - North Central Co-Operative Association Ltd Defendant _______________________________________________________ Reasons for Decision of the Honourable Applications Judge W.S. Schlosser _______________________________________________________ [ 1 ] This is a

summary judgment application in a builders lien matter, made pursuant to r 7.3 and s 53 of the (now) Prompt Payment and Construction Lien Act, RSA 2000, c P-26.4 . The applicant seeks a declaration that their lien is valid, and judgment for roughly $800,000 said to be owing for the construction of a gas bar, convenience store and car wash in the Chappelle neighborhood in Edmonton. There is security paid into court. [ 2 ] The applicant argues: While there is a large volume of evidence, there are no conflicts in material facts that disentitle Miclex to

summary relief. There is no genuine issue requiring a trial simply because there are several issues at play with a large amount of evidence. This court, on the evidence before it, is just as well placed to decide the merits of this matter as a trial or

summary trial judge. [ 3 ] The respondent denies that a fair and just determination can be made on the evidence now before the Court but goes on to say that the amounts claimed are, for the most part, either not permitted by the contract, or completely set off by the effect of contractual provisions relating to delay. The respondent’s brief is 1,820 pages.

1. Admitted Amounts [ 4 ] Two amounts are admitted: $57,574.80, approved by the consultant and $95,840.29 (primarily for the extra cost of having to complete summer work in the winter), also approved subject to provision of backup documents. There is a dispute about whether the backup documents have been provided. 2. Contested Claims [ 5 ] The contract is a standard form CCDC-2 stipulated price contract. Miclex was a general contractor. The defendant is the owner. AODBT Architecture + Interior Design was the consultant. The consultant was to (from the respondent’s brief): 19. AODBT - in its capacity as Consultant - was to: (

a) administer the Contract; (

b) determine if the work that was being performed pursuant to the Contract was proceeding in “general conformity with the Contract Documents”; (c) “determine the amounts owing to (Miclex) under the Contract” and “issue Certificates for Payment”; (

d) in the first instance, interpret the requirements of the Contract Documents; (

e) receive questions relating to the performance of the work or the

interpretation of the Contract Documents and, thereafter, provide

interpretations and findings to Miclex and NCC; (

f) reject work which AODBT believed did not conform with the requirements of the Contract Documents; September 14, 2020 Affidavit of Mr Alfarela, Exhibit 1, May 2, 2018 Contract, General Condition 2.2 [ 6 ] The presence of a consultant charged with the tasks set out above is very significant. Not only does the contract require timely notice of claims for delay, or additional cost, notice has to be in the proper form and disclose a reason for the extra cost that is not the contractors fault or responsibility.

The starting point is that the consultant has considered the claims that form the basis of this lawsuit and has rejected all but the amounts that have been admitted. [ 7 ] The contract work was to commence May 2, 2018, in two stages. I acknowledge that the bidding instructions requested bidders to expect the project to begin ‘on or about April 25, 2018’ and that bids ‘should be based on a mobilization date of April 25, 2018’. Substantial completion was originally intended to have been achieved by November 30, 2018. A Permits [ 8 ] In general, Miclex was to (from the respondent’s brief, para 23): (

a) construct a gas station with an underground fuel tank storage; (

a) supply the materials for the Convenience Store and construct the Convenience Store; (

b) supply materials, install and construct an overhead canopy for the fuel pumps; (

c) supply the materials, install the materials, place the materials and construct the Car Wash; and (

d) supply the paving materials, prepare the site and pave the site February 11, 2021 Cross-Examination of Mr Alfarela, 27(15) – 28(16) [ 9 ] Miclex was to obtain the permits for the job. NCC started the process. Three separate city permits were required for the convenience store, overhead canopy and car wash. A permit was not required for paving work. [ 10 ] The delay claim for the period between April 25 to May 2 has not been made out. Nothing prevented Miclex from mobilizing and starting work on May 2, or even as early as April 25. If permits were the hold up they were Miclex’s responsibility.

No permit was required for the paving portion of the work. B Increases in Contract Price [ 11 ] The original contract price was $2,228,205.00 plus GST. Miclex has been paid $2,156,925.25. Miclex’s claims bring the contract price to $2,935,272.76. [ 12 ] The fixed price contract contained several key terms: first, a change in the work was not to be performed without a Change Order or a Change Directive (GC 6.1.2). General Condition 6.1.3 provided (from the respondent’s brief, para 31):

... "Changes to the Work performed by (Miclex) without a prior Change Order or a Change Directive , shall be at (Miclex’

s) sole risk, cost and expense and (NCC) shall not be liable for any claim for compensation in respect thereof by (Miclex). Claims by (Miclex) for a change in the Contract Price shall be barred unless there has been strict compliance with all requirements in

Part 6 (of the Contract). No course of conduct or dealing between the parties, no express or implied acceptance of alteration or additions to the Work and no claims that (NCC) has been unjustly enriched by any alteration or addition to the Work , whether in fact there is any such unjust enrichment or not, shall be the basis of a claim for additional payment under this Contract or a claim for any extension of the Contract Time ." Undertaking 6 - March 26, 2018 Bid Set Specifications / Specification

Section 00 73 03 / Supplementary Conditions /

Part 6

Section 18.1 [ 13 ] I acknowledge there is an overlap between delay claims and additional work. Extra expense is one of the consequences of delay. Work that could have been completed in the summer may be pushed into the winter months, necessitating things like heating and hoarding.

However, none of the additional work was approved by the consultant except for the admitted amounts (above). [ 14 ] Miclex claims that the consultant was biased. [ 15 ] The Court will give deference to a consultant’s decision: ASC (AB) Facility Inc v Man-Shield (Alta) Construction, 2018 ABQB 130 at paras 14-16 , 19 and 22 to 24 per Antonio (then) J , and ANC Developments Inc v Dilcon Constructors Ltd, 2000 ABCA 223 at para 150 . Unless the consultant’s opinion is obviously biased, patently incorrect, or displays a demonstrable and significant error, it is difficult to depart from it without expert evidence.

In this case, the consultant’s opinion does not easily fit into any of these categories. There is no countervailing expert evidence. C Delay [ 16 ] Compensation for delay forms the biggest part of this claim ($319,088.63). Delay itself is not a head of damages (as the claim is now framed), though it can lead to extra costs, and it can form the basis for exempting the contractor from penalties for late completion. GC 6.5.1, 6.5.3, 6.7.1, and 6.5.4 provide (again, from the respondent’s brief): 53. The Contract provided significant consequences for delay. For example: (

a) General Condition 6.5.1 said that, if Miclex was delayed in its performance of the work as a result of an "act or omission of" NCC, AODBT or "anyone employed or engaged by them directly or indirectly", the time by which Miclex was required to have completed its scope of work was to be "extended for such reasonable time as (AODBT) may recommend in consultation with (Miclex)". If such an extension was granted, Miclex was to be reimbursed by NCC for the "reasonable costs incurred by (Miclex) as a result of such delay"; (

b) General Condition 6.5.3 indicated that – if Miclex was delayed by, among other things – "abnormally adverse weather conditions" or "any cause beyond (Miclex'

s) control other than one resulting from any default or breach of contract by (Miclex)”, the Contract Time was to be extended "for such reasonable time as (AODBT) may recommend in consultation with (Miclex)". If such an extension was granted, however, Miclex would not be entitled to payment for costs incurred by such delays unless they were attributable to NCC or AODBT. September 14, 2020 Affidavit of Mr Alfarela, Exhibit 1, May 2, 2018 Contract, General Conditions 6.5.1 and 6.5.3 54. Finally, General Condition 6.7.1 – as created by the Supplementary Conditions – provided economic consequences for delay. 55.

In particular, General Condition 6.7.1 indicated that: (a) "timely performance of the Work is of utmost importance to (NCC) and (NCC) requires that Substantial Performance of the Work be achieved within the Contract Time”; (

b) if Miclex failed to attain Substantial Performance of the Work on or before the date specified in

Article A-1 of the Agreement between NCC and Miclex portion of the Contract, Miclex was required to pay liquidated damages to NCC at the rate of $1000 for each calendar day of delay in attaining Substantial Performance with respect to the Gas Bar, Convenience Store and Canopy and $500 for each calendar day of delay in attaining Substantial Performance of the Work in relation to the Carwash. Undertaking 6 - March 26, 2018 Bid Set Specifications / Specification

Section 00 73 03 / Supplementary Conditions /

Part 6 /

Section 24 ... 59. When a delay arose, the Contract was clear that claims for delay could not be advanced unless a Notice in Writing of Claim had been issued. In particular, General Condition 6.5.4 - as amended by the Supplementary Conditions - indicated that: (a) "no extension of the Contract Time will be given and (Miclex) shall not be entitled to a payment for costs incurred as a result of any delay unless (

a) Notice in Writing of Claim (including details as to the cause of delay) is given to (AODBT) and (NCC) not later than 10 Working Days after the commencement of the delay"; (a) “in the case of a continuing cause of delay, only one Notice in Writing of Claim shall be necessary”; (b) “failure on the part of (Miclex) to give the Notice in Writing of Claim to (AODBT) and (NCC) in accordance with (General

Condition) 6.5.4 will constitute a waiver of (Miclex’

s) right to make a claim for an adjustment to the Contract Price or the Contract Timeas a result of such delay”. Undertaking 6 - March 26, 2018 Bid Set Specifications /

Section 00 73 03 / Supplementary Conditions /

Part 6 /

Section 22 [17] The time limit is not a rolling limitation but runs ten working days from the start of the delay. [18] GC 6.6.1, created by the supplementary conditions, provide that failure to give notice in writing will constitute a waiver of theright to make a claim.

Strict observance of these provisions is necessary for compensation. [19] There were eight notices in writing, all of them outside of the 10 day time limit in GC 6.5.4, as amended by the supplementaryconditions and none of them demonstrate a compensable claim beyond that which is admitted. [20] The original date for substantial completion had originally been agreed to be November 30, 2018. The date was moved toApril 1, 2019, but substantial completion was not achieved until September 3, 2019.

It is on this basis, and by operation of GC 6.7.1, thatthe defendant claims set off in the amount of $231,000.00 in their amended defence. [21] The law is not kind to claims for unapproved extras, or claims for quantum meruit in a builders lien context (unless you are anowner seeking to set off against the lien fund): Peter Kiewit Sons' Co v Eakins Construction Ltd, (SCC), [1960] SCR361, Enerkem Alberta Biofuels LP v Producits Metalliques Pouliot Machinerie Inc, 2016 ABQB 524 (at paras 13 – 15), and the casescited there.

The legislation is geared toward providing an expedited procedure for what are essentially construction debts. It is not atruncated procedure for other remedies. D Disposition [22] There are no cross applications. This is not a ‘trial in a box’ (or, in this case, two boxes). The sole question is whether thecase ought to be determined summarily in favour of the plaintiff. In my estimation, the defence looks better than the claim. There is nopersuasive or compelling evidence, expert or otherwise, that would contradict the consultant’s decisions, or reveal demonstrable andsignificant errors.

The application is dismissed. Heard on the 6th day of September, 2022. Dated at the City of Edmonton, Alberta this 24th day of January, 2023. W.S. Schlosser A.J.C.K.B.A. Appearances: Anthony Burden Field LLP for the Plaintiff Jonathan Hillson Dentons Canada LLP for the Defendant