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IN THIS ISSUE:

Complying with Canada’s Anti-Spam Legislation (CASL)— A Blueprint for the Construc-tion Industry

David Fraser and Trent Skanes ........... 1

How Far Can Quebec’s Public Authorities Go When Evaluating a Contractor’s Performance?

Yvan Houle ......................................... 4

Peace of Mind as Part of a Home Building Contract

Hickey's Building Supplies Ltd. v. Sheppard. .................................................. 6

When Does a Proposal Turn into a Contract?

Cleanol Integrated Services Ltd. v. Johnstone .......................................... 8

Change Is Bad: Navigating the New Website for the Daily Commercial News

Jay Nathwani .................................... 10

Volume 31 • Number 5 May/June 2015

GUEST ARTICLE

COMPLYING WITH CANADA’S ANTI-SPAM LEGISLATION (CASL)— A BLUEPRINT FOR THE CONSTRUCTION INDUSTRY The construction industry—project owners, contractors, subcontractors, and trades—might be relaxing, ignoring the hype around Canada’s Anti-Spam Legislation (CASL), and thinking it is targeted at “spammers”.

But do not get too comfortable! Here is how CASL applies to you, why you should care—and the top five Dos and Don’ts if you did not prepare for CASL.

What Is CASL?

CASL is arguably the world’s toughest anti-spam law. On July 1, 2014, the “anti-spam” sections took effect, moving Canada to an “opt-in” re-gime for all electronic-based commercial communications. With few ex-ceptions, if just about any person or business—from sole proprietors and independent contractors to small businesses and multinational corpora-tions—wants to send a “commercial electronic message” (CEM) within or into Canada, it needs the recipient’s prior consent. With some inclu-sions and exclusions, a CEM is any electronic message that encourages participation in a “commercial activity” as one of its purposes—and CASL applies equally to one-to-one messages and messages from large mailing lists.

David FraserMcInnes Cooper

Trent SkanesMcInnes Cooper

Volume 31 • Number 5 • CONSTRUCTION LAW LETTER

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How Does CASL Apply?

Here are five examples where CASL requires construction industry members to change their practices:

1. Best Developers Ltd., Best GC Ltd., and Best Subcon-tractors Ltd. all regularly exhibit in business-to-business and business-to-consumer trade shows, invite attendees to complete a ballot giving their names and email ad-dresses, and then use the email addresses to solicit busi-ness from attendees via email.

2. Best GC Ltd. and Best Subcontractors Ltd. regularly send emails to developers and/or contractors, soliciting work or giving updates about their businesses.

3. All regularly get referrals and contact them, providing information and/or soliciting work via email.

4. Best Developers Ltd. and Best GC Ltd. invite contrac-tors, subcontractors, and/or trades to respond to RFPs or tenders via email.

5. Jane Doe Tradesperson does one, some, or all of the above.

Why Care?

There are significant penalties for violating CASL, including fines up to $10 million, personal liability of directors and of-ficers, criminal charges, and, starting July 1, 2017, exposure to a civil lawsuit. A CASL violator can argue that it exer-cised “due diligence”—but only if it took reasonable steps to prevent the violation and has tangible evidence to prove it did so.

What Now?

If you did not prepare for CASL, here are the top five Dos and Don’ts:

1. DO ensure every commercial email sent by your or-ganization meets CASL’s content requirements. Some CEMs are exempt, but until you are sure which (and maybe even after), it is safest to ensure that every email that leaves you or your organization includes

CONSTRUCTION LAW LETTER

Construction Law Letter is published six times a year by LexisNexis Canada Inc., 123 Commerce Valley Drive East, Suite 700, Markham, Ont., L3T 7W8, and is available by subscription only. Design and compilation © LexisNexis Canada Inc. 1984-2015. Unless otherwise stated, copyright in individual articles rests with the contributors.

ISBN 0-433-40930-4 ISSN 433409304 ISBN 0-433-44380-4 (Print & PDF) ISBN 0-433-44664-1 (PDF)

Subscription rates: $260 $360 (Print & PDF) EDITORS Editor: Markus Rotterdam Dipl.-Jur., LL.M. Glaholt LLP Consulting & Founding Editor: Harvey J. Kirsh B.A., LL.B., LL.M., C. Arb., C.S. Kirsh Professional Corporation Contributing Editor: Howard Krupat B.Sc. (Hons), LL.B. DLA Piper (Canada) LLP Founding Editor: Paul Sandori Dipl. Ing. Arch. Revay and Associates Limited LexisNexis Editor: Boris Roginsky B.A. (Hons) LexisNexis Canada Inc. Tel.: (905) 479-2665 ext. 308 Fax: (905) 479-2826 E-mail: [email protected] EDITORIAL BOARD The Right Hon. Madam Justice Beverley M. McLachlin, Chief Justice of Canada • The Hon. Justice R. Roy McMurtry, former Chief Justice of Ontario • The Hon. Justice Gordon Killeen, formerly of Ontario Superior Court of Justice • Michael A. Atkinson, President, Canadian Construction Association • David I. Bristow QC, Toronto • John R. Singleton QC, Singleton Urquhart, Vancouver • W. Donald Goodfellow QC, Calgary • William M. Pigott, Miller Thomson LLP, Toronto • former Master David H. Sandler, Ontario Superior Court of Justice • The Hon. Justice Michael F. Harrington, Court of Appeal of the Supreme Court of Newfoundland and Labrador Note: Readers should not rely solely on the interpretation of a court decision summarised in this publication, but should consult their own solicitors as to the interpretation of the written reasons rendered by the court. The publishers and editors disclaim any liability which may arise as a result of a reader relying upon contents of this publication. The opinions expressed in the articles are those of the authors, and not necessarily those of the publisher and editors of the Construction Law Letter.

CONSTRUCTION LAW LETTER • Volume 31 • Number 5

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the mandated information about the sender(s), and

a way recipients can unsubscribe or indicate they do not consent to receive CEMs or withdraw such consent.

2. DO analyze your contacts and identify to whom you can continue to send CEMs. For business purposes, this depends greatly on whether you have an Existing Business Relationship with the recipient: one that in-volves or arose from the purchase, lease, or bartering of product, goods, or services within the immediately preceding two years; a writ-ten contract either in force or that expired within the immediately preceding two years; or a recipient’s inquiry within the immediately preceding six months. If the contact does not fit in one of these three buckets, you cannot send her any more CEMs until she gives you consent:

Bucket 1. Some CEMs are exempt from the consent requirements (some are also exempt from the content requirements). The CEMs exempt from CASL’s consent requirements most relevant to the construction industry are as follows:

those sent to someone with whom the sender has a family or a personal relation-ship (CASL defines both)

those sent to someone in response to a re-quest, inquiry, complaint, or a CEM the recipient otherwise solicited

those sent between organizations with a relationship if it concerns the recipient’s activities

those sent to a consumer for the purpose of providing a requested quotation; facili-tating, completing, or confirming a com-mercial transaction that the recipient

previously agreed to enter; providing warranty, recall, or safety info about a purchase; or providing info about exist-ing employment relationship or related benefits

those sent as a referral by someone with one of these relationships with both the sender and the recipient—but this ex-ception applies only to a single CEM: an Existing Business Relationship, or an Existing Non-business Relationship, a Family Relationship, or a Personal Relationship (all as CASL defines) (The CEM must disclose the full name of the person who gave the sender the referral.)

Bucket 2. Under CASL’s transitional sec-tions, you can send CEMs to the contact until July 1, 2017, or the date she tells you not to if

you have an Existing Business Relation-ship with her, and, for the purposes of this transitional section only, the time limits in the definition of Existing Business Relationship do not apply;

that relationship arose before July 1, 2014;

that relationship included electronic communication (even if it was one way).

After July 1, 2017, you need her express consent, she must be exempted (Bucket 1 above), or you must have her implied consent (Bucket 3 below).

Bucket 3. You have your contact’s implied consent to send her CEMs if you have an Existing Business Relationship with her—but the time limits in the definition do apply for this purpose. This implied consent expires when the Existing Relationship expires, after which you need her express consent or she must be exempted (Bucket 1 above).


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3. DO NOT send please consent emails to all your contacts: since July 1, 2014, even this is a CEM that requires consent. But DO solicit express consents from the contacts to whom you have determined you can continue to send CEMs (Bucket 2 above; you can do so elec-tronically for these) and from new contacts go-ing forward (Make sure you can send them a CEM before you ask for consent electronically; otherwise, resort to another method like mail or telephone.). Make sure you get express consent (“I consent to receive commercial electronic messages from Best GC Ltd.”) orally or in writing (including electronically, like subscrib-ing on a website). Exploit opportunities to get consent. For example, add a subscription page to your website and a link to it in every email, ask people to complete a subscription card at tradeshows.

4. DO record and deal with all consent re-sponses. Record every consent and no consent communication you get, however, in whatever form you get it. You will have to prove you have consent: whether your records are elec-tronic or manual, have a system to store and access them. You have ten days to unsubscribe a contact who tells you to stop sending CEMs.

5. DO NOT stop here. Create and implement a CASL compliance plan so you comply with CASL—and if you violate it, you can raise its due diligence defence.

[Editor’s note: McInnes Cooper prepared this arti-cle for information; it is not legal advice. Consult McInnes Cooper before acting on it. McInnes Cooper excludes all liability for anything con-tained in or any use of this article. © McInnes Cooper, 2015. All rights reserved.]

GUEST ARTICLE

HOW FAR CAN QUEBEC’S PUBLIC AUTHORITIES GO WHEN EVALUATING A CONTRACTOR’S PERFORMANCE? The Quebec Government has provided public au-thorities with a means to evaluate a contractor’s performance on a given project, and, where a nega-tive evaluation is issued, the contractor may be barred from responding to any further call for ten-ders issued by the public authority for the follow-ing two years.

The Regulation respecting construction contracts of public bodies, which was enacted pursuant to the Act respecting contracting of public bodies, requires a public body to report the unsatisfactory performance of a contractor: Within 60 days after the end of the contract, a public body must (1) rec-ord in a report the evaluation of any contractor whose performance is considered to be unsatisfac-tory and (2) include a copy of the report provided to the contractor. The contractor is then given 30 days to present his or her written comments and response.

The chief executive officer of the public body is then provided with 30 days to either uphold or cancel the evaluation and inform the contractor of his decision. Where the chief executive officer fails to act within that prescribed time, the contrac-tor’s performance is deemed to be satisfactory.

Yvan Houle Borden Ladner Gervais LLP


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A finding that his or her performance was unsatis-factory has significant repercussions for the contrac-tor. Provided that it is expressly stipulated in the tender documents, he or she may be disqualified from participating in any subsequent tenders issued by the public body for the next two years.

The Regulation’s wording is sufficiently broad to provide the public authority with a large measure of discretion in assessing whether it considers a contractor’s performance to be unsatisfactory. The Regulation does not set out any criteria for making that assessment so that, as things now stand, it is left to the public authority either to set out the criteria in advance or simply make its assessment at the end of a project, based on its own, often un-disclosed, benchmarks.

As a result, a contractor faced with the serious consequences of a negative evaluation may be tempted to challenge the public authority’s finding that his or her performance was unsatisfactory. The recent cases tend to show that contractors are faced with an uphill battle.

The Quebec Court of Appeal in the case of Con-struction DJL inc. c. Québec (Procureure générale) was recently seized of a matter raising the issue and disposed of it in a manner that supports the public authority’s wide discretion in making its finding.

Construction DJL had contracted with the Quebec Ministry of Transport (MTQ) for the construction of a section of highway in Quebec. At the end of the contract, the MTQ issued a report concluding that DJL’s performance was unsatisfactory in that the quality of DJL’s resources, its communications, and collaboration were below standard. DJL’s failure to respect the schedules and the project’s structural and engineering requirements prompted the MTQ to issue its report concluding that the contractor’s per-formance was unsatisfactory.

DJL, having been advised of the MTQ’s decision, challenged same and brought a motion seeking to

have it stayed and to safeguard its rights pending a final determination by the court.

The Quebec Superior Court dismissed both appli-cations. It held that DJL had not demonstrated hav-ing an appearance of right to the stay and safeguard order. According to the court, the evi-dence showed that both parties had followed the process set out in the Regulation in that the nega-tive evaluation was provided to DJL, DJL had commented on it, and the MTQ’s decision was subsequently upheld.

The Superior Court also held that the wording of art. 58 of the Regulation, which requires the chief executive officer of the public authority, after re-ceipt of the contractor’s response, either to main-tain or cancel the negative evaluation, does not require that the decision be motivated.

Finally, the Superior Court held that it was doubt-ful that the DJL would suffer any serious or irrepa-rable harm should the MTQ’s decision be maintained, because, in the court’s view, DJL was not disqualified from all types of contracts with the MTQ and there was no evidence of a bid being re-fused by the MTQ on the basis of the negative evaluation.

The Superior Court also considered the public in-terest and held that the stay, on balance, was not warranted, because to grant the stay, as requested by DJL, would amount to exempting DJL from the operation of the Act respecting the contracting of public bodies, which was adopted in the public interest in order to ensure the transparency of the contractual process, the fair and equitable treat-ment of competitors, and the possibility for only qualified competitors to participate in public tenders.

Unsatisfied with the judgment in first instance, DJL sought leave to appeal this decision to the Court of Appeal, which, in the end, dismissed DJL’s application for leave.


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The Court of Appeal relied on an earlier decision in Consultants Aecom inc. c. Société immobilière du Québec, where the engineering firm was seek-ing injunctive relief to stay a decision to disqualify it for a tender issued following an unfavorable evaluation of its performance on a previous project and to have the earlier negative evaluation set aside. The Court of Appeal, in that case, upheld the public authority’s decision and found that the word-ing of the Regulation was such that it did not give rise to injunctive relief in those circumstances.

Although there are still relatively few cases dealing with the issue, it appears that the courts attach a great deal of importance to the public interest considerations that underlie the legislative and regulatory requirements governing the public pro-curement of construction contracts when assessing the merits of a challenge of a public authority’s negative evaluation.

As a result, successfully challenging a public own-er’s negative evaluation, based on the existing ju-risprudence, will be difficult and will likely require some evidence of grievous conduct on the part of the authority.

CASE SUMMARY

PEACE OF MIND AS PART OF A HOME BUILDING CONTRACT Hickey's Building Supplies Ltd. v. Sheppard

After working in Labrador City for years, Harvey and Patricia Sheppard were ready to retire and decided to move back to Newfoundland.

Mrs. Sheppard was a double amputee and spent most of her time in a wheelchair. She could also get around by using two prosthetic feet and canes or by crawling on the floor. The new home they wanted to build for themselves would have to ac-commodate for that.

A lot of land was bought in Holyrood. The Sheppards engaged an excavator to prepare the land for construction. Since part of the land was a bog, it was necessary to remove it and replace it with more stable fill. Once that was completed, they looked for a contractor and were referred to Hickey’s Building Supplies Limited. The Sheppards entered into a contract with Hickey’s and made it clear to Hickey’s from the outset that the home needed to accommodate Mrs. Sheppard’s special circumstances—in particular, her mobility challenges.

While Hickey’s substantially completed the build-ing, the Sheppards refused to make the final pay-ment because of two alleged deficiencies: The main issue was with the flooring, which ended up not being level and created an obstacle for Mrs. Sheppard. The second issue was that the Sheppards thought they had contracted for 9’ ceilings and got 8’ ceilings instead.

The Breaches of Contract

The flooring issue was critical; it was the main rea-son the Sheppards refused to pay the final amount due on the contract. The floor was made up of two parts. In most of the house, it was hardwood at-tached to the concrete sub-floor with adhesive glue. In the kitchen, bathrooms, and entranceways, it was ceramic tile also attached to the concrete sub-floor with an appropriate adhesive. There were two problems with the floor: The hardwood por-tion was not properly attached to the concrete sub-floor. In many places it had lifted, moved, and made noises when walked upon. The second issue was the transition between the ceramic and hard-wood portions, which were not at the same level.

Markus Rotterdam Glaholt LLP Editor, Construction Law Letter


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The resulting ridges presented an obstacle to Mrs. Sheppard’s wheelchair.

Hickey’s argued that transition strips that it had placed in appropriate places were sufficient to al-leviate the problem. It argued that the contract did not specifically require a level floor, that the con-tract contained an entire agreement clause so that verbal communications about level floors did not affect Hickey’s obligations under the contract, and that in any event the transition strips were compli-ant with the Building Code and therefore adequate.

The trial judge did not accept those arguments:

[57] The Sheppards were adamant that they had emphasized to Jay

Hickey that they wanted a smooth, flat floor, with no obstacles for a

wheelchair. They maintain that the floor ought to have been installed

so that there was no difference between the heights of the two types

of flooring. [The Contractor] on the other hand, felt that the problem

was only a minor one, and could be solved by the addition of tapered

“transition strips” which would mask the difference in height.

[58] It is not credible that [the Contractor] could have misunderstood

the need for a flat floor with no obstacles. Jay Hickey knew from the

beginning that Mrs. Sheppard required a floor that was appropriate

for a wheelchair. Jim Hickey, who took over management of the job

from Jay Hickey in May 2009, also knew these requirements. This

issue could have been addressed in the late fall of 2009, when the

ceramic floor was installed.

[61] I believe it is disingenuous for [the Contractor] to refer to the

terms of the written contract. It is true there is nothing written in the

contract about the two types of flooring being even where they came

together. However, many aspects of good construction techniques

are not mentioned in the contract. There is an expectation that the

construction will proceed using the available techniques, within the

costs permitted in the contract. According to several of the witnesses,

it would have been a minor adjustment during construction to have

had the flooring that satisfied the Sheppards.

The Court of Appeal did not interfere with that finding. It held that the contractor should have told the Sheppards about the possibility of using transi-tion strips and the possibility of having a perfectly level floor at a slightly higher cost. The Court of Appeal also agreed that compliance with the Building Code was no answer to using the strips without authorization from the Sheppards.

With respect to the second alleged deficiency—the ceiling height—the drawings of the proposed

house showed nine-foot ceilings, but the specifica-tions were for “2x6 Pre-cut spruce studs”, indicat-ing an eight-foot ceiling. Mr. Hickey testified for the Contractor that he had discussed the height of the ceiling with Mr. Sheppard and that Mr. Sheppard “told him to go with the lower priced option", that is, eight-foot ceilings. Mr. Sheppard testified that he had no idea that pre-cut meant 8’ height and that when he realized that he was getting 8’ ceilings, he agreed under duress, since the carpenter was ready to commence work on the walls, and he wanted to avoid further delay. Despite a contract clause to the effect that “in the event of a conflict, the specifications shall control the drawings”, the court found that the con-tract called for 9’ ceilings:

[33] Since the meaning of “p/cut” and “pre-cuts” set out in the

specifications is not obvious, a layperson reading the contract would

normally come to the conclusion that the requirement for nine foot

walls in the drawings was not contradicted by the specifications. In

the absence of an explanation for the technical term “precuts”, there

was no expectation that the Sheppards would understand that the

contract provided for eight foot walls. As a consequence I find that

the contract called for walls of nine feet.

To this point, the case was a relatively straightfor-ward and typical home builder’s case. What sets the case apart is the court’s discussion of damages.

The Damages—Peace of Mind

The Supreme Court of Canada in Fidler v. Sun Life Assurance Co. of Canada held that while breaches of commercial contracts can, in some circumstanc-es, result in an award of damages for mental dis-tress, such awards are definitely not the norm, since the likelihood of a breach of contract causing mental distress is not ordinarily within the reason-able contemplation of the parties to commercial contracts:

[45] It is not unusual that a breach of contract will leave the wronged

party feeling frustrated or angry. The law does not award damages

for such incidental frustration. The matter is otherwise, however,

when the parties enter into a contract, an object of which is to secure

a particular psychological benefit. In such a case, damages arising

from such mental distress should in principle be recoverable where

they are established on the evidence and shown to have been within


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the reasonable contemplation of the parties at the time the contract

was made. The basic principles of contract damages do not cease to

operate merely because what is promised is an intangible, like

mental security.

Having regard to these principles, the trial judge in Hickey’s Building Supplies Ltd. v. Sheppard held that an important part of the house contract was to provide the Sheppards with the peace of mind that Mrs. Sheppard’s circumstances would be appropri-ately reflected in both the final product and the ex-ecution of the construction itself. The Sheppards’ circumstances made it foreseeable that delay and failure to live up to the terms of the contract would cause distress. The court held that Hickey’s failed to provide that peace of mind. Being fully aware of Mrs. Sheppard’s medical and disability issues, Hickey’s failed to meet the Sheppard’s reasonable expectations. With respect to delay, it was foresee-able that failure to meet the contract completion date would present serious difficulties for the Sheppards. Because of the requirement for wheel-chair accessibility, alternate accommodations would not be readily available. The problems with the floor presented even greater distress.

Therefore, the trial judge awarded the Sheppards $15,000 in general damages.

The Court of Appeal was divided on this issue. The dissenting judge, Madam Justice Welsh, held that the trial judge was wrong in awarding general damages for mental distress in these circumstanc-es. Justice Welsh argued that regardless of the Sheppards’ special circumstances with respect to wheelchair accessibility, the contract to build their house did not engage the “peace of mind” compo-nent. While it was true that the hardwood flooring was not properly installed and that Hickey’s chose to comply with the Building Code standards rather than the agreement in using transition strips, these deficiencies could be corrected, and damages could compensate for the required remediation. Since this was not a situation in which the house was rendered uninhabitable, Her Honour would have allowed the appeal on this point.

Madam Justice Hoegg, for the majority of the court, dismissed the appeal and upheld the damag-es award. The majority held that Hickey’s fully understood the psychological benefit for which the Sheppards had contracted. In fact, Hickey’s had conceded in its testimony that the contract could be characterized as a “peace of mind” contract. Jus-tice Hoegg held that it was foreseeable to Hickey’s that the breaches of the contract with respect to flooring and delay were likely to result in mental distress of a compensable nature to both Mr. Sheppard and Mrs. Sheppard. The require-ments set out by the Supreme Court of Canada in Fidler were therefore met.

Newfoundland and Labrador Court of Appeal November 24, 2014 Welsh, Harrington and Hoegg JJ.A.

CASE SUMMARY

WHEN DOES A PROPOSAL TURN INTO A CONTRACT? Cleanol Integrated Services Ltd. v. Johnstone

A recent case before an Ontario Master turned on the issue of whether a project proposal signed by both parties contained all elements necessary to amount to a contract.

In Cleanol Integrated Services Ltd. v. Johnstone, Master Albert considered whether a meeting of the minds had been achieved in a home renovation case, based on key terms such as price and scope of the renovation project. The plaintiff, Cleanol, provided general renovation services on a condo-minium unit to the defendant, Johnstone, who had purchased a two-story condominium unit in

Lena Wang Glaholt LLP


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downtown Toronto and contracted with Cleanol to renovate it for his own use.

Ms. Yueh was the president of Cleanol and also the principal of 360 Restoration, a company en-gaged in providing emergency management and business continuity planning services to businesses devastated by fire and flood.

Cleanol sued when Johnstone refused to pay $68,017.51 for services and materials supplied as part of the renovation. Cleanol registered a con-struction lien and subsequently commenced an ac-tion for this amount. Upon receiving Johnstone’s counterclaim in the amount of $240,000, the plain-tiff increased its claim to $175,656.97.

At trial, a key issue was whether the parties had entered into a contract.

A Project Proposal containing the following terms had been signed by both parties:

Project Objective

design and renovate at 39 Jarvis Street, Suite 806

client to supply appliances of choice

final scope of work to be signed off by December 1, 2010

your signature, name, and date constitute ap-proval on revisions, changes, and adjustments

Estimated Value

$100,000–$125,000 plus applicable taxes

Projected Completion Date

December 1, 2010

Payment Schedule (to be finalized on November 20, 2010)

$40,000 deposit—payment received on November 17, 2010

$20,000.00 interim payment—December 15, 2010

balance due ten days after project completion

There were no other documents attached to the Proposal, such as drawings or plans.

Price Uncertainty

Johnstone argued that the parties entered into a contract for the fixed price of $125,000, regardless of the scope of work or the materials used. Master Albert rejected this argument, as it failed to ascribe meaning to the term “$100,000”—in the proposal. Master Albert also held that even if she accepted the owner’s assertion that the contract price was capped at $125,000, the proposal was void for un-certainty, since there were no terms in the proposal on what services and materials Cleanol was re-quired to supply for this price. Cleanol’s argument that the parties had entered into a quid pro quo agreement whereby the parties would provide ser-vices to each other at cost was dismissed due to lack of evidence.

Scope of Work Uncertainty

Master Albert also found the Proposal void for un-certainty, as no scope of work was ever agreed up-on. The Proposal stated that the parties needed to finalize a scope of work by December 1, 2010. The Master took issue with the fact that the date to de-termine a final scope of work was the same date as the projected completion date, holding that it would have been impossible for Cleanol to com-plete the job without knowing the scope of work sufficiently ahead of time. Although Cleanol pre-pared and submitted a total of seven scope of work statements—accounting statements that set out itemized details of the cost of the renovation— Mr. Johnstone never signed off on any of the scope of work statements. Master Albert found the scope of work to be a moving target.

In the absence of a meeting of minds on the scope of work or the price of the renovation, there was no valid contract.


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Quantum Meruit

In such circumstances, the court assessed the claim on a quantum meruit basis, which it explained as follows:

[75] A quantum meruit claim is not dependent on the existence of a

valid contract but is a discrete cause of action which contemplates a

remedy for unjust enrichment or unjust benefit. The Court indicated

that there will be two requisites to a successful quantum meruit

claim: (1) That the services in question were furnished at the request,

or with the encouragement or acquiescence of the opposing party;

and (2) That such services have been furnished in circumstances that

render it unjust for the opposing party to retain the benefit conferred

by the provision of the services.

The evidence showed that Johnstone requested the work. After the initial site meetings, where the overall project was discussed, Johnstone attended at Cleanol’s premises weekly and the site frequent-ly to discuss design concepts and ideas for the unit. Cleanol staff made suggestions, and Johnstone gave instructions. Cleanol proceeded with changes as instructed. As the project progressed, the scope of the renovation expanded, and Johnstone ap-proved the changes.

While Johnstone argued at trial that he did not ex-pect that the many upgrades, changes, and addi-tions to the scope of work would increase the cost of the renovation and, on that basis, he should not have to pay for them, the court found that position to be unreasonable. Johnstone was a sophisticated real estate professional and therefore knew or ought to have known that upgrading materials and expanding the scope of work would increase the cost of the renovation.

Since Johnstone requested the services and materi-als supplied by Cleanol and accepted and received the benefit of Cleanol’s supply of services and ma-terials, it would have been unjust to allow him to retain that benefit without paying reasonable com-pensation to Cleanol.

Master Albert assessed the amount owing to Cleanol at $60,369.31.

Ontario Superior Court of Justice Master C. Albert February 2, 2015

GUEST ARTICLE

CHANGE IS BAD: NAVIGATING THE NEW WEBSITE FOR THE DAILY COMMERCIAL NEWS In Ontario, the Construction Lien Act requires cer-tificates of substantial performance (“CSPs”) to be published in “a construction trade newspaper”. In practice, all CSPs are published in the Daily Commercial News (DCN).

While this effective monopoly has resulted in steep prices for the publication of CSPs, until recently, it offered the advantage of making it easy for indus-try participants or their legal counsel to determine whether a CSP had been published on a project. The website of the DCN had a link at the top left on the front page called “CSPs”, which took read-ers to a simple search form. You could put in the name of a project, owner, or general contractor and get an easy-to-read list of results going back years.

In mid-2014, however, the DCN modified its web-site. Now, finding a CSP is an exercise in guess-work and frustration. There is no link to CSPs, or anything else resembling them. Instead, readers have the two options analyzed below.

The first way to find a CSP is to enter one’s search term into the Search bar on the front page. This will return search results from any section of the website, the vast majority of which will not be use-ful. Readers can then filter the results by looking under the Refine Results column on the right and under the Sections heading (clicking More at the

Jay Nathwani Glaholt LLP


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bottom to expand if necessary). Readers then have a choice of two sections that appear to be the main repositories for Ontario Certificates of Substantial Performance: Certificate of Completion and Certificates and Notices. Note that depending on the search term and the results it returns, both of these section names might not be appearing. If you do see both, you will need to check them to be cer-tain of your search.

Several other sections appear to deal with notices published pursuant to legislation in other provinc-es: Certification of Substantial Completion, Notice of Substantial Completion, Notice of Partial Sub-stantial Completion, Certificate of Substantial Per-formance, and Notice of Substantial Performance.

Those familiar with the Act will note that the cor-rect terminology—Certificate of Substantial Per-formance—is not used in connection with Ontario projects. CSPs are usually found under Certificates of Completion, which could lead one to think that what is being certified is completion of a subcon-tract under s. 33 of the Act, when, in fact, substan-tial performance of a contract is being certified under s. 32. (You will need to click through and read the details to be certain.) This terminological inexactitude—to borrow a phrase from Winston Churchill—is difficult to understand coming from the only trade paper publishing CSPs.

The second way to find a CSP is to click on the Legals link that appears on the right of the menu bar at top of the DCN homepage above the DCN’s banner and Search bar. The Legals link takes the reader to a page that at first glance on most screens has nothing to do with CSPs. But scroll down and you find a graphic with the words Certificates and Notices under the Construction Lien Act. Click on

this graphic, and you are taken to a page that, at the bottom, has a list of published certificates, orga-nized by date. There is no search function. You can see the 20 most recent certificates published, and page back manually in time. This layout is useful if you know that the CSP you are looking for has been published in the last few days; otherwise, given the volume of CSPs published in Ontario, it is useless.

It is to be hoped that the DCN’s new website will not turn into an incubator for missed lien dead-lines, lost lien rights, and negligence claims against lawyers who have not figured out how to navigate its interface.

CITATIONS

Act respecting contracting of public bodies, RLRQ c C-65.1, r 0.1 (in French).

Cleanol Integrated Services Ltd. v. Johnstone, [2015] O.J. No. 468, 2015 ONSC 768.

Construction DJL inc. c. Québec (Procureure générale), [2014] J.Q. no 8873, 2014 QCCA 1547, aff’g [2014] J.Q. no 6305, 2014 QCCS 3052 (in French).

Construction Lien Act, R.S.O. 1990, c. C.30.

Consultants Aecom inc. c. Société immobilière du Québec, [2013] J.Q. no 162, 2013 QCCA 52 (in French).

Fidler v. Sun Life Assurance Co. of Canada, [2006] S.C.J. No. 30, 2006 SCC 30.

Hickey's Building Supplies Ltd. v. Sheppard, [2013] N.J. No. 68, 2013 NLTD(G) 19 (N.L.S.C. (T.D.)), aff’g [2014] N.J. No. 346, 2014 NLCA 43.

Regulation respecting construction contracts of public bodies, RLRQ c C-65.1, r 5 (in French).


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