The Revay Report

Volume 20 Published by Construction Consultants Number 2 Revay and Associates and June 2001 Limited Claims Specialists

The readers of the Revay Report, in responding to a recent survey, selected delay analysis as their Concurrent Delay: number one interest. We have discussed A Modest Proposal delay analysis in past R.B. Reynolds and S.G. Revay issues more than once, S.G. Revay last time in Number 2 R.B. Reynolds of Volume 13 (June 1994). Nevertheless the request is 1. INTRODUCTION faulty workmanship, strikes caused by the understandable considering the rapid contractor, etc. (see: T.J. Trauner, Construc- evolution of available techniques and more Concurrent delay is experienced on a pro- tion Delays (Kingston, MA: R.S. Means importantly the judicial treatment of this ject when two or more separate delay Company, Inc., 1990) at p. 4). topic. No wonder there is no generally events occur during the same time period accepted technique today. It has often been and each, independently, affects the com- Recent U.S. caselaw continues to demon- said that delay analysis is an art and not a pletion date. Delays may occur as a result strate an emphasis on the critical path science. If this statement is true of delay of the actions, or inaction, on the part of analysis approach to treatment of delay. analysis in general, then it is doubly so with the owner, the contractor, subcontractors, (See, for example, Williams Enterprises respect to concurrent delay analysis. In this or the designer, and when delays do occur Inc. v. Strait Manufacturing and Welding article we are trying to chart a possible claims for both extra time and additional Inc., 728 F. Supp. 12 (D.D.C. 1990); Wilner course for future development. compensation arise. Not infrequently v. United States, 23 Cl. Ct. 241 (1991); PCL such claims are resisted based upon alle- Construction Services Inc. v. United gations of concurrent delay, either a con- Bruce Reynolds, the co-author of this article, States, 47 Fed. Cl. 745 (2000).) This current delay by the claimant or a method, of course, provides fertile for those of you who may not know him, is concurrent delay by another project par- ground for the assertion of concurrent head of the Construction and Surety ticipant, which arguably deprives the delay defences. Professional Group for the national law firm claimant of the ability to establish causa- of Borden Ladner Gervais LLP. He is listed in tion. To understand the underlying rationale the Canadian Legal Lexpert Directory 2000 for the principles derived from U.S. as one of the “most frequently recommended” Most of the literature dealing with concur- caselaw, it is important to recognize that, construction litigators in Toronto. He is the rent delay comes from the United States as noted above, the defence of concurrent co-author of Scott and Reynolds on Surety and the majority of it is based on judg- delay arises where the claimant which is Bonds, and is the author of many papers and ments in the area of federal contracting. contending that certain actions or omis- articles on construction and surety law. He is Generally, viewed from the perspective of sions on the part of the defendant gave Past Chair and Legislative Co-ordinator of the owner-general contractor relationship, rise to compensable delay, is met with the Construction Law Section of the the following principles can be derived either the argument that the claimant Canadian Bar Association (Ontario) and is a from the U.S. caselaw: itself is responsible for either an excus- able or non-excusable concurrent delay, Founding Governor and Past Treasurer • if an excusable (e.g. a force majeure or the argument that another party (1999-2000) of the Canadian College of event) or a compensable delay occurs involved in the project was involved in an Construction Lawyers. His practice area for concurrently with a non-excusable excusable or non-excusable concurrent the past 18 years (called to the Ontario Bar delay, the delay is treated as excusable; delay. In essence, the defendant takes the in 1983) has been construction and surety position that, although it (i.e. the defen- bond law, including construction claims and • if an excusable delay occurs concur- dant) may have delayed completion of the construction insurance claims. rently with a compensable delay, the delay will be treated as excusable but project, the fact that there was a concur- non-compensable. rent delay elsewhere on the project, Mr. Reynolds would like to thank his affecting the critical path, means that the colleagues Sharon Vogel and Dan Boan for Normally, non-excusable delay arises as a claimant would have suffered the same their assistance with this paper. result of an event within the contractor’s damages even if the defendant had not control. Examples of non-excusable delays delayed the project, and that, therefore, S.G. Revay include late performance by subcontrac- the claimant cannot prove that the defen- tors, untimely performance by suppliers, dant caused its damages. The inequitable aspect of the concurrent reduced this amount by 20% to represent caused delay. However, the calcula- delay defence is that, where accepted, it the amount of delay which was attribut- tion of such impact costs is a very results in a wrongdoer avoiding the con- able to Northern. complex exercise and can only be sequences of its acts. In the paradigm sit- accomplished, if at all, at a trial of the uation, an innocent claimant can be met Also, in Foundation Co. of Canada v. Unit- issue. Evidence is before me of the with two or more wrongdoers arguing ed Grain Growers Ltd. (1996), 25 C.L.R. time within which a reasonable con- that the claimant must bear its own loss (2d) 1 (B.C.S.C.), var’d (1997), 33 C.L.R. tractor could complete the contract, due to its inability to establish that any (2d) 159 (C.A.), United Grain Growers Ltd. and this is compared to the actual one of the defendants was the proximate (“United Grain Growers”) entered into a completion time. To reach any proper cause of the claimant’s damage. Interest- contract with Foundation Co. of Canada conclusion as to the costs from the ingly, although the defence of concurrent (“Foundation Co.”) for a renovation of its delay one would be required to delay is widely used by the leading claims grain terminal. CWMM was United Grain analyse the contractor’s progress and consultants in Canada, the Canadian Growers’s engineer. Foundation Co. sub- determine to what extent the differ- jurisprudence dealing with construction contracted the sheet metal work to ent causative factors, such as con- disputes provides no direct assistance in Crosstown Metal Industries Ltd. tractor-caused delays, unavoidable respect of how to address this significant (“Crosstown Metal”). The construction delays and owner-caused delay con- defence. was delayed. Foundation Co. sued United tributed to the overall delay experi- Grain Growers and CWMM for damages enced by the contractor. It would also Importantly, the general concept of con- for breach of contract and negligent mis- be necessary to evaluate the validity current delay has been recognized by representation and advanced a claim for of the contractor’s original contract Canadian courts. For example, in Conti- extras. Crosstown Metal sued Foundation schedule and the “reasonable con- nental Breweries Inc. v. 707517 Ontario Co. for damages for breach of contract, tractor” schedule. Ltd. (C.O.B. Northern Algonquin Brewing however, most of these claims were refer- Co.), [1993] O.J. No. 2395 (Ont. Ct. (Gen. able to the acts and omissions of United However, Wallace J. did not undertake the Div.)) Northern, as owner, entered into an Grain Growers and CWMM, from which analysis described above, because he was agreement with Continental Breweries Foundation Co. claimed contribution and of the view that such an exercise could Inc. (“CBI”), as contractor, to construct a indemnity. United Grain Growers counter- not be undertaken on a motion for judg- brewing facility. The completion of the claimed against Foundation Co. for eco- ment. Unfortunately, there is a dearth of brewery was delayed and the facility did nomic losses caused by Foundation Co.’s Canadian caselaw which directly grapples not “come on stream with a completed delay. At trial, Brenner J. considered each with the issue of the defence of concur- brewing facility” for one year past the portion of the project which the parties rent delay in terms of conducting the kind completion date contemplated in the orig- alleged resulted in delay and found that of analysis described by Wallace J. and inal agreement. As a result, CBI com- Foundation Co. was delayed by the acts determining the resulting apportionment menced an action against Northern to and omissions of United Grain Growers of responsibility for concurrent delay. and/or CWMM for a period of three recover for work and materials supplied In order to appreciate the context within months past completion. Justice Brenner and for delay. Northern counterclaimed which expert claims consultants analyse also found that Foundation Co. estab- for lost profits as a result of the delay. the issues of concurrent delay, it is useful lished that there were other delays which After assessing all the evidence in respect to consider the various analytical were the responsibility of United Grain of the delay, Davidson J. found that CBI approaches available. bore primary responsibility for the delay, Growers and/or CWMM which likely in that the initial schedules drawn up were delayed Foundation Co., but that these never met because of its use of inade- delays were concurrent, and therefore 2. ANALYTICAL APPROACHES TO quate forces, lack of detailed drawings, would not extend the 3-month entitle- SOLVING THE CONCURRENCY late ordering of material, general lack of ment of Foundation Co. With respect to DILEMMA experience in projects of that magnitude Crosstown Metal, Brenner J. found that From the claims consultant’s perspective, and complexity, cash flow problems, and Foundation Co. contributed to the delays there is a number of analytical approach- inability to organize the fundamental experienced by Crosstown Metal. Thus, in es available to establish the basis for a installation of the necessary connected assessing the extent to which Crosstown delay claim. and interdependent elements of the pro- Metal was entitled to indemnity, Brenner ject. Justice Davidson also found that J., apportioned responsibility for the Northern was partly responsible for the delays for which Crosstown Metal was i. The Snapshot Method delay, since it requested changes for entitled to compensation at 75% for In complex claims, simplifying considera- labelling design, obtaining sufficient CWMM and United Grain Growers and tions must be adopted by dividing the labelling information, and changed filters 25% for Foundation Co. project into windows of time, where each which, in turn, delayed CBI. In this The lack of a definitive approach to the window must be analyzed independently. respect, Davidson J. found that, to a limit- defence of concurrent delay in the Cana- ed degree, the delay was attributable to dian jurisprudence on construction law Scheduling is a dynamic process. For a Northern; however, the totality of the represents a troublesome conundrum. schedule to be meaningful and acceptable delay attributable to Northern was only 12 Justice Wallace, in his decision on a for valid delay analysis it must be kept weeks since a delay of twelve weeks was motion for judgment, in Pacific Coast current and must reflect both the delays due to the labelling design and getting Construction Co. Ltd. v. Greater Vancou- or gains as they occur and the then gov- sufficient label design information and the ver Regional Hospital District (1986), 23 erning planning (e.g. sequencing and changed filter caused an additional six C.L.R. 35 (B.C. S.C.), highlighted the con- resource loading) of the contractor [see week delay, but that it was concurrent text within which the concurrency debate Fortec Constructors v. U.S. 760 F.2d 1268 with the 12 week delay of the label normally arises when he stated, in part: (Fed. Cir. 1985)]. Schedules which are not change. Therefore, Davidson J. attributed kept current (i.e. periodically updated to 80% of the delay to CBI and 20% to North- I find that the contractor is entitled to faithfully reflect the actual status of the ern. Justice Davidson also allowed North- claim the delay costs incurred by it as project at various intervals) are not con- ern’s counterclaim for lost profit but a result of the three week owner- sidered a valid medium for delay analysis.

2 Because the snapshot analysis focuses on each window. (This determination can be account the possible relocation of the crit- specific periods of the project and always based on common sense, the “dominant ical path. measures gains or delays against the then cause” or “collapsed as–built schedule” current critical path, it is considered a analysis, as described hereinafter.) iii. Collapsed As-Built Schedule superior technique for the purpose Perhaps the most authoritative opinion on Method intended, assuming of course that the the snapshot method was rendered by the The collapsed as-built schedule method, window periods selected are of sufficient- Armed Services Board of Contract ly short duration to properly capture any also known as the “but for” method, has, Appeals, in Gulf Contracting, Inc., ASBCA in recent years, been gaining consider- significant shifting of the critical path and Nos. 195, et al., 89-Z BCA (explained in that the progress at the end of the period able popularity primarily because of its Number 2, Volume 13 of The Revay simplicity. Under this method one takes represents real progress as opposed to Report). desired (i.e. invalid) progress. the as-built schedule, identifies the impact of delays caused by one or more The word “snapshot” describing this tech- ii. The Dominant Cause Approach party(ies) (usually the defendant(s)), and nique underscores the need for relying then removes those impacts from the as- only on factual as opposed to fictional The line of reasoning used by the court in built schedule. The remaining duration data. Williams, supra, is very similar to the allegedly represents the schedule within principle favoured by the English courts, which the claimant could have completed The schedule run at the end of the win- where it is called the “dominant cause the project “but for” the faults (acts or dow period (i.e. the snapshot schedule) approach”. According to this approach the omissions) of the defendant. Although must therefore give effect to the actual plaintiff may recover its damages if it can this apparent simplicity carries inherent progress achieved as well as to the delays establish that the delay for which the dangers with it (i.e. the method can be (extended activity duration) and gains defendant must assume responsibility is abused easily), it may nevertheless pro- (reduction in the activity duration) experi- the overriding or the “dominant” cause of vide a vehicle for the application of con- enced by the project during the window the loss suffered. Which cause is domi- tributory negligence principles to delay period. Based on these revisions to activ- nant is a question of fact which is not analysis, as discussed below. ity duration and the progress actually solved by mere order of occurrence, but is achieved, the revised project completion to be decided by applying common sense 3.THE GENERAL CANADIAN RULE date is recalculated applying the original standards. For example, if progress on a planning (i.e. the logic used for the sched- section of the work was suspended on a OF ASSESSING DAMAGES ule in force at the beginning of the win- Monday because an essential piece of In considering the legitimacy of and the dow period) to the part of the schedule equipment supplied by the owner would treatment to be accorded to the defence covering the work to be performed not arrive for another ten days, then with- of concurrent delay from a Canadian per- beyond the end of the window period, out other delays it is safe to assume that spective, it is also useful to review the including the unprogressed activities or the cost of the suspension should be paid legal context within which such a defence the remaining portions of those activities to the contractor by the owner. Now, if on functions, i.e. as a bar to the recovery of which have been partially progressed dur- Wednesday a heavy rain storm caused damages. Generally, Canadian courts ing the window period. flooding, thereby preventing work on the have adopted the principle that where a The completion date projected by this entire site for a number of days, is the court determines that the plaintiff has suf- snapshot schedule, if compared to the contractor still entitled to compensation fered a loss the court must do “the best it completion date projected by the unpro- for all of its damages? Pursuant to the can” to ascertain its damages. gressed schedule (the schedule as “dominant cause approach” it would be In this respect, S.M. Waddams in The Law planned at the beginning of the window entitled to all of its extended duration of Damages, looseleaf ed. (Toronto: Cana- period), indicates the overall delays or costs relating to the section of work sus- da Law Book Inc., 1942+) writes, at 13.10 gains resulting from the achieved pended, but not to the cost resulting from to 13.30, as follows: progress or lack thereof. the flooding to the other parts of the work. The general burden of proof lies Although the snapshot schedule is, at There is a long line of English decisions upon the plaintiff to establish the times, used as the as-planned schedule which follow the dominant cause case and to prove the loss for which for the next window period, more often approach, starting with Leyland Shipping compensation is claimed. In many than not the schedule is revised by chang- Co. Ltd. v. Norwich Union Fire Insurance cases the loss claimed by the plaintiff ing the sequencing of activities or intro- Society Ltd., [1918] A.C. 350 (H.L.) and depends on uncertainties; these are ducing other accelerating measures, continuing through Galoo Limited v. of two kinds: first, imperfect knowl- thereby probably shifting the critical path. Bright Grahame Murray, [1995] 1 All E.R. edge of facts that could theoretically Most of the time the projected completion 16 (C.A.). All of these English cases and be known and secondly, the uncer- date of this “revised” or “updated” sched- arguably also the Williams case represent tainty of attempting to estimate the ule is different (usually brought back) relatively straightforward problems suit- position of the plaintiff would have from that of the snapshot schedule. able for “common sense” determination. occupied in hypothetical circum- Because of the acceleration which might Unfortunately, this is not always the case. stances, that is to say, supposing that have been introduced by subsequent On projects that sustain multiple overlap- the wrong complained of had not updates, the measure of the total project, ping changes or delays with long dura- been done. which has to be determined to assess res- tions (including concurrent delays) , as ponsibility for the causes giving rise to may be the case, for example, on many American law has had considerable delays and/or to determine the degree of process or power plants, neither the dom- difficulty with this second type of entitlement to acceleration cost, is the inant cause approach nor other common uncertainty. The courts have used the cumulative total of the delays or gains sense approaches may suffice because of requirement of certainty to inhibit or determined for each snapshot. Allocation all the assumptions that must be made set aside what they consider to be of liability for the delays will, of course, regarding remaining durations of activi- excessive jury awards, with rigorous have to be carried out independently for ties being affected not even taking into standards laid down in many cases.

3 The consequence that, where recov- preparing the site by providing a railway The only practical way of measuring ery is thought to be justified, the connection. Penvidic had to revise its the overall impact and loss of produc- courts must strive to reconcile the method of construction, and as a result, tivity is in the way that Ms. Tardif has results desired with prior restrictive suffered increased expenses and delay. done, and that is to attribute the extra holdings. The evidence proved that International hours spent beyond those estimated Nickel breached its contract with Penvidic (subject to proof that the estimates are In Anglo-Canadian law, on the other and that damages resulted. Penvidic esti- reasonable) to loss of productivity and hand, perhaps because of the decline mated its damages by leading evidence impact. in use of the jury, the courts have as to the costs of the extra ballasting on consistently held that if the plaintiff Rosenberg J. held, at page 71, that: an additional sum-per-ton basis rather establishes that a loss has probably “although it cannot be precisely mea- than by ascertaining items of expense been suffered, the difficulty of deter- sured, the best estimate that I can make is from its records. The trial judge adopted mining the amount of it can never that Inco is not responsible for 40% of the this method to assess damages. On excuse the wrongdoer from paying delay in the project because of the late appeal, the Supreme Court of Canada damages. If the amount is difficult to start, strikes, etc.” cited the decision of Wood v. Grand Valley estimate, the tribunal must simply do Railway Company, supra, for the proposi- Applying the authorities set out above to its best on the material available, tion that the court must do “the best it the problem of concurrent delay, an argu- though of course if the plaintiff has can” to ascertain the damages and found ment may be advanced that, in cases not adduced enough evidence that that under the circumstances, the plaintiff where it is difficult to assess damages, might have been expected to be was entitled to the damages which the including issues of concurrency, if the adduced if the claim were sound, the trial judge properly assessed. plaintiff proves that the defendant is a omission will tell against the plaintiff. wrongdoer and materially contributed to In Ratcliffe v. Evans, Bowen L.J. said: Another example of the court doing “the the delay and the plaintiff suffered dam- best it can” is found in the decision of Pot- As much certainty and particular- ages, the court is obligated to do “the best ter Station Power Co. v. Inco Ltd. (1998), ity must be insisted on, both in it can” to assess these damages. Of 43 C.L.R. (2d) 53 (Ont. Ct. (Gen. Div.)). pleading and proof of damage, course, it must be recognized that the Bluebird Construction (Potter Station was as is reasonable, having regard decisions cited above do not deal specifi- the successor of Bluebird Construction) to the circumstances and to the cally with the issue of concurrent delay, entered into a contract with Inco. During nature of the acts themselves by yet one is left with the sense that, in rela- the course of Bluebird’s contract a num- which the damage is done. To tively complex fact situations, where ber of problems arose, including interfer- insist upon less would be to issues of concurrency were likely involved ence and delay. As a result, Bluebird relax old and intelligible princi- to some degree, Canadian courts have claimed against Inco for damages, includ- ples. To insist upon more would tended to allocate responsibility on a ing, impact costs, head office be the vainest pedantry. broad brush approach. overhead/administration, and loss of pro- This principle was applied by the ductivity. In assessing Bluebird’s impact Supreme Court of Canada in Wood v. and loss of productivity costs, Rosenberg 4. APPORTIONMENT OF LIABILITY Grand Valley R. Co. (1915), 51 S.C.R. 283. J., wrote, at page 61, as follows: The concept of apportionment of liability In Wood the Supreme Court of Canada, may provide a more direct approach to I find that with the number of prob- referring to the decision of Chaplin v. address the concurrent delay defence. Hicks, [1911] 2 K.B. 786, stated, at page lems involved it would be impossible 289, as follows: to calculate the impact and loss of One tool for allocating the responsibility productivity attributable to each for delay which is available to the courts It was clearly impossible under the problem. When a part is delayed the of certain of the common law provinces is facts of that case to estimate with impact and loss of productivity can- contained in legislation addressing the anything approaching to mathemati- not be determined. The best that can apportionment of liability in negligence. cal accuracy the damages sustained be done is to estimate the total Legislation establishing joint and several by the plaintiffs, but it seems to me to impact of all of the problems and liability amongst multiple tortfeasors and be clearly laid down there by the extras on productivity and efficiency. allowing apportionment of liability in neg- learned judges that such an impossi- ligence has been introduced in all of the bility can not “relieve the wrongdoer Justice Rosenberg further wrote, at page Canadian common law jurisdictions (see: of the necessity of paying damages 65, as follows: Negligence Act, R.S.O. 1990, c. N-1; Con- for his breach of contract” and that Inco took the position that for each tributory Negligence Act, R.S.N.B. 1973, c. on the other hand the tribunal to esti- FWI claimed there should be included C-19; Contributory Negligence Act, R.S.Y. mate them whether jury or judge the amount for loss of productivity 1986, c.32; The Tortfeasors and Contribu- must under such circumstances do and impact. This may be appropriate if tory Negligence Act, R.S.M. 1987 c. T90; “the best it can” and its conclusion there were a few changes and delays Negligence Act, R.S.B.C. 1996, c.333; Con- will not be set aside even if the in the contract, but with hundreds of tributory Negligence Act, R.S.A. 1970, c. C- amount of the verdict is a matter of such changes there is no practical way 23; Contributory Negligence Act, R.S.N. guess work. [Emphasis added]. to so allocate. If a piece of equipment 1990, c. C-33; Contributory Negligence This issue was again considered by the is originally due June 1st and then Act, R.S.N.W.T. 1988, c. C-18; Contributory Supreme Court of Canada in Penvidic Inco advises that it is now expected Negligence Act, R.S.N.W.T. 1988, c. C-18, Contracting Co. v. International Nickel Co. June 15th and later advises that it is as duplicated by the Nunavut Act, S.C. of Canada, [1976] 1 S.C.R. 267. There, Pen- expected July 1st and so on from time 1993, c. 28, as amended; Contributory vidic entered into a contract with Interna- to time, it is not possible for Bluebird Negligence Act, R.S.N.S. 1989, c.95 and tional Nickel to lay track and do the top to say, when there are hundreds of the Tortfeasors Act, R.S.N.S. 1989, c. 471; ballasting on a railroad constructed by such incidents, that this particular inci- Contributory Negligence Act, R.S.P.E.I. International Nickel. International Nickel dent caused us X dollars as a result of 1988, c. C-1; and The Contributory Negli- did not complete its preliminary work of the impact and loss of productivity. gence Act, R.S.S. 1978, c. C-31). This legis-

4 lation allows the courts to apportion lia- common law damages could be reason why it should not equally be bility between plaintiffs which are contrib- apportioned in actions in contract as applicable in cases of contract. … utories and tortfeasors, as well as well as in actions of tort and that the Mosbeck [the pilot], by negligently between joint tortfeasors (which remain Contributory Negligence Act, taking the aircraft up, created the sit- jointly and severally liable to the plaintiff R.S.N.B. 1973, c. C-19, should be uation where the damage occurred despite any apportionment of liability as applied by analogy, or adopts the the- because of the inadequate shock between them by the court). (Such legisla- ory of the reasonable expectations of cords installed by the defendant. In tion is hereinafter referred to as “contrib- the parties, or the notion of reliance such circumstances, there should, in utory negligence legislation”.) that was either qualified or unreason- my opinion, be apportionment able, or simply that in fairness and to whether the action be brought in con- Pitch and Snyder point out that “notwith- do justice the damages ought to be tract or in tort. standing the similarity of this legislation, apportioned, I do not think that in the its application by the courts to contract circumstances of this case the trial In apportioning, Saunders J. did not hold actions has varied from province to judge erred in concluding that the that the Negligence Act applied but rather province”: see H.D. Pitch & R.M. Snyder, actions of the company president, that “the principles set out in s. 2 of the Damages for Breach of Contract, 2nd ed. Harold Kane, and of Charles Kane, its Negligence Act seem appropriate to apply (looseleaf) (Toronto: Carswell, 1989+), at employee, contributed to the compa- to a claim in contract even though the 9§3(b). The technical restriction on the ny’s loss. Nor am I able to say that the statute itself does not apply” (page 341). application of this legislation to negli- apportionment of the degrees of fault The decision of Saunders J. in Tompkins gence still exists in Alberta, Manitoba, of each party is wrong. New Brunswick, Newfoundland, Ontario, was followed by Grange J. in Ribic v. Prince Edward Island and Saskatchewan. Also, see Doiron v. Caisse Populaire D’Ink- Weinstein (1982), 140 D.L.R. (3d) 258 (Ont. On the other hand, the courts of British derman Ltee. (1985), 17 D.L.R. (4th) 660 H.C.J.). Also, in Cosyns v. Smith et al. Columbia and Nova Scotia have relied on (N.B. C.A.) for an excellent consideration (1983), 41 O.R. (2d) 488 (C.A.), the Court of negligence legislation in respect of con- of this entire area of the law by Justice La Appeal, in obiter, commented on the rea- tract claims (see: Pitch & Snyder, Dam- Forest. soning of Saunders J. in Tompkins and ages for Breach of Contract, supra, at adopted by Grange J. in Ribic as follows: 9§3(b)(i) to (viii)). However, given the gen- The problem of apportionment between a I am satisfied that, in the present eral approach of Canadian common law claimant and a defendant in contract was case, the duty of the defendants courts to the application of the principles also addressed in Tompkins Hardware Ltd. arose from the contract. It is not nec- contained in contributory negligence leg- v. North Western Flying Services Ltd. et al. essary to decide whether a duty also islation to contractual situations, the dis- (1982), 139 D.L.R. (3d) 329 (Ont. H.C.J.). arose under the law of torts. In any tinction as to the direct applicability of the There, the plaintiff took its aircraft to the event, I do not think that it is neces- legislation is of diminished significance. defendant for maintenance and change- over from floats to skis. The existing shock sary for this court to pronounce on For example, with relation to apportion- cords were replaced with new cords. An the attractive conclusion reached by ment between a claimant and a defendant aeronautical engineer employed by the Saunders J. and adopted by Grange in contract, in the New Brunswick Court of defendant inspected the work and certi- J. I say this because of the conclusion Appeal case of Coopers & Lybrand v. H.E. fied the aircraft as airworthy. After picking which I have reached on the second Kane Agencies Ltd. (1985), 17 D.L.R. (4TH) up the aircraft from the defendant, the issue, i.e., the legal validity of the 695, Coopers, an accountancy firm, was plaintiff’s pilot took off for his camp. He finding of contributory negligence Kane’s auditor and conducted an annual encountered problems controlling the air- made against the plaintiff in this case. audit of Kane. In its action, Kane alleged craft and made his own temporary repairs [The Court of Appeal found that the that Coopers failed to exercise reasonable by attaching “tie downs” to the landing plaintiff was not negligent]. care, skill, and competence, or alterna- gear. During a flight the next day the pilot tively, that it was negligent in the perfor- was forced to make an emergency land- Similarly, in Wells Construction Ltd. v. mance of its duties to Kane since Coopers ing which resulted in extensive damage to Thomas Fuller Construction Company failed to detect a system that Charles the aircraft. The plaintiff sued the defen- (1958) Ltd. (1986), 22 C.L.R. 144 (Nfld. S.C.) Kane, the principal of Kane, devised which dant in both contract and tort. Justice Thomas Fuller contracted with Her resulted in excessive credit being extend- Saunders found that the defendant failed Majesty in the Right of Canada for the ed to one of Kane’s customers. The cus- to perform its obligations to the plaintiff in construction of buildings. In turn, Thomas tomer subsequently went into a workmanlike manner and also that the Fuller subcontracted the excavation and receivership and Kane was unable to pilot was negligent since it was unreason- backfill, rock removal, clearing and grub- recover part of its debt. The Court of able for him not to have left the aircraft bing, site grading, and some drilling to Appeal agreed with the trial court that with the defendant after the first incident Wells. Wells began to experience financial Coopers did not meet the standard of care when he encountered problems control- difficulties which it attributed to the lack of and skill called for in the circumstances. ling the aircraft. The plaintiff argued that payment of invoices rendered to Thomas The Court of Appeal also found that the even if its pilot was negligent, such negli- Fuller for work completed. As a result, bad business judgment of Charles Kane gence did not reduce the defendant’s lia- Wells withdrew its workers and informed was a proximate cause of Kane’s loss, bility in contract. In this respect, Saunders Thomas Fuller that it would return to the however, this conclusion did not provide J. found, at pages 340-341, as follows: site, but only after its progress invoices Coopers with a complete defence. With were paid. The issues were not resolved respect to apportionment, Stratton, J.A. The principle that where a man is part and Thomas Fuller completed the work delivering the judgment of the court, author of his own injury he cannot under the subcontract. Wells commenced found, at page 708, as follows: call upon the other party to compen- an action to recover from Thomas Fuller sate him in full, has long been recog- and the bonding company the balance … I am satisfied that the duty of nized as applying in cases of tort: see due for labour, materials, equipment, and Coopers & Lybrand arose from their Nance v. B.C. Electric R. Co., [1951] 3 services rendered under the subcontract. contract of engagement. Whether D.L.R. 705 at p. 711, [1951] A.C. 601 at Thomas Fuller counterclaimed. Part of one accepts the argument that at p. 611, 2 W.W.R. (N.S.) 665. I see no Thomas Fuller’s counterclaim was based

5 on the damages suffered as a result of learned trial judge apportioned liabil- ticularly in circumstances where the having to complete the backfill work, ity by disallowing the costs to the claimant has contributed to the delay. which Wells argued should be appor- Owner of architectural and legal ser- Such an approach is to be compared with tioned. With respect to this portion of the vices although he did not express his that contained in U.S. cases such as Coath counterclaim, Woolridge J. agreed with reasons in those terms. The result of & Goss, Inc., A Corporation v. The United the decision of Saunders J. of Tompkins his decision was that the completion States, 101 Ct. Cl. 702 (1944), and Blinder- Hardwood, supra, holding that the princi- costs were borne by the Contractor man Construction Co., Inc. v. The United ples set out in Section 2 of The Contribu- and the Owner in a proportion of States, 695 F.2d 552 (U.S.C.A., 1982), pur- tory Negligence Act, R.S.N. 1970, c.61 are approximately 77:23. suant to which apportionment is only appropriate to apply to a claim in contract. allowable where there is proof of a clear As a result, Woolridge J. found that Further, in Dartmouth (City) v. Acres Con- allocation of the delay and expense attrib- Thomas Fuller was 80% liable, and Wells sulting Ltd. (1995), 138 N.S.R. (2d)163 utable to each party. 20% liable, for the costs of the backfill. (S.C.), the City engaged Acres to prepare the designs and specifications for the Again, however, it does not appear that Also, in Convert-A-Wall Ltd. v. Brampton construction of ramps and floating docks the issue of the defence of concurrent Hydro-Electric Commission (1988), 65 O.R. for the Dartmouth cross harbour ferry ter- delay has been specifically addressed by (2d) 385 (Div. Ct.), Convert-A-Wall (the minals. The City also contracted with the court in the cited Canadian jurispru- “Contractor”) contracted with Brampton McAlpine as general contractor. dence on apportionment. In other words, for the construction of additions and mod- McAlpine subcontracted with Semper to where concurrent delay clearly occurs, ifications to offices and warehouse prop- supply labour, materials, and equipment and the defence is squarely raised, appor- erty of Brampton. There were delays in the for the installation of the roofing. In turn, tionment, as it has been applied in the progress of the work which the Contractor Semper subcontracted to Connor to construction context to date, does not attributed to Brampton and Brampton’s install and supply the roofing in accor- directly address the basic causation issue architect (the “Architect”). As a result, the dance with the plans and specifications. inherent in the defence. work was behind schedule. Liens were Construction was completed; however, also registered and the amounts claimed about five years later water was detected Importantly, the Supreme Court of Cana- were held back by Brampton. The Contrac- leaking from the ceiling of one of the da in Athey v. Leonati, [1996] 3 S.C.R. 458, tor began to experience a cash-flow prob- ramps. The City investigated the cause of 140 D.L.R. (4th) 235 can be referenced (by lem and Brampton continued to hold back the leaks and discovered that the roof had analogy) in this context. Athey v. Leonati the amount of the claims for lien of which experienced rot and concluded that deals with personal injury; however, Jus- it had notice. The situation steadily deteri- extensive repairs were required. The City tice Lee considered the principles set out orated until Brampton terminated the con- commenced an action to recover the in Athey v. Leonati in the context of con- tract. The court found that the only default costs of these repairs. The evidence current delay in The City of Edmonton v. by the Contractor was failure to complete showed the presence of considerable Lovat Tunnel Equipment Inc. (2000), 3 in a timely fashion. Brampton was respon- water and moisture within the sandwich C.C.L.T. (3d) 78 (Alta. Q.B.). sible for some of the delay to the Contrac- construction of the roof which led to the In his decision, Justice Lee, responding to tor and the trial judge awarded the rotting of the wood and vapour barrier in an argument submitted by the City of Contractor damages for those delays. The the roof. Justice Grant canvassed several Edmonton that the “collapsed as-built trial judge also found that Brampton was different causes which led to the roof schedule” delay analysis presented by its entitled to completion costs. The trial damage and found that McAlpine and scheduling expert was in accordance with judge found that the delays caused by the Connor failed to follow the specifications. the test adopted by the Supreme Court of owner, at least in part, led to the Contrac- As a result, Grant J. found that Acres was Canada in Athey v. Leonati, had this to tor’s default, however, the trial judge not negligent and not liable. Justice say: found that the Contractor had the respon- Grant did not canvass the law of appor- sibility of performing the contract in accor- tionment as it applies to claims arising in [520] The court in Athey v. Leonati dance with its terms and that a reasonable tort and contract, but, in any event, confirmed that causation is estab- contractor would have anticipated the apportioned the damages in the follow- lished when the plaintiff proves on a financial problems and the possibility of ing manner: 20 % to the City (10% for balance of probabilities that the delay. The trial judge essentially appor- accepting changes of materials and 10% defendant has caused or contributed tioned the completion costs between the for work done by City workers); and 80% to the injury. Generally, a “but for” Contractor and Brampton by awarding the to McAlpine (20% for negligence in test is employed for causation, pur- Contractor damages arising as a result of respect of carpentry work and 60% for suant to which the plaintiff must the delay and Brampton some of its com- negligence in respect of the roofing). Jus- establish that the injury complained pletion costs. On Appeal, Saunders J., tice Grant also found that the City was to of would not have occurred but for stated, at page 393, as follows: be indemnified by its consulting engineer the negligence of the defendant. for 10% of the damages for accepting the The recovery of completion costs is [521] Under various circumstances, changes in the roof materials. Further, akin to damages. Those costs com- the Courts will recognize that causa- McAlpine was to receive indemnity from pensate an owner for an expense tion may be established where the Connor for the 60% of the damages which he would not have otherwise defendant’s negligence materially resulting from the roofing negligence as incurred. If an owner is partly respon- contributed to the occurrence of the Connor had performed the work. sible for the incurring of the expense, injury. Where there are numerous fac- then it is appropriate to apportion the tors contributing to the injury, the Clearly, where available, the principles liability in the same manner as is defendant will be liable for all of the contained in the Coopers & Lybrand, done in a tort action. injuries caused or materially con- Tompkins Hardware, and Convert-A-Wall tributed to by his or her negligence. … cases contribute an element of flexibility into the analysis of shared responsibility The Athey v. Leonati decision (written by The apportionment of liability cannot for damages in contract, including, in the Justice Major), and its forbears, provide be a precise calculation. In effect, the view of the authors, delay damages, par- authoritative Canadian support for the

6 “material contribution” approach to the material if it falls outside the de min- single cause can be attributed to a apportionment of damages in negligence, imus range: Bonnington Castings, harm is the “but-for” test. However, as well, it is contended, in contract. Ltd. v. Wardlaw, supra; see also R. v. the but-for test is unworkable in Pinske (1988), 30, B.C.L.R. (2d) 114 some situations, particularly where Justice Major, in addressing apportion- (B.C.C.A.), aff’d [1989] 2 S.C.R. 979… multiple independent causes may ment, in Athey v. Leonati makes a very bring about a single harm. clear differentiation between tortious and […] non-tortious causes, noting that: To understand these cases, and to In cases of negligent donor screen- Apportionment between tortious see why they are not applicable to the ing, it may be difficult or impossible causes is expressly permitted by present situation, one need only con- to prove hypothetically what the provincial negligence statutes and is sider first principles. The essential donor would have done had he or consistent with the general principles purpose and most basic principle of she been properly screened by the of tort law. The plaintiff is still fully tort law is that the plaintiff must be C.R.C.S. The added element of donor compensated and is placed in the placed in the position he or she conduct in these cases means that position he or she would have been would have been in absent the defen- the but-for test could operate unfair- in but for the negligence of the defen- dant’s negligence (the “original posi- ly, highlighting the possibility of leav- dants. Each defendant remains fully tion”). However, the plaintiff is not to ing legitimate plaintiffs liable to the plaintiff for the injury, be placed in a position better than his uncompensated. Thus, the question since each was a cause of the injury. or her original one. It is therefore nec- in cases of negligent donor screening The legislation simply permits defen- essary not only to determine the should not be whether the C.R.C.S.’s dants to seek contribution and plaintiff’s position after the tort but conduct was a necessary condition indemnity from one another, accord- also to assess what the “original posi- for the plaintiffs’ injuries using the ing to the degree of responsibility for tion” would have been. It is the dif- “but-for” test, but whether that con- the injury. ference between these positions, the duct was a sufficient condition. The “original position” and the “injured proper test for causation in cases of In the present case, the suggested position”, which is the plaintiff’s loss. negligent donor screening is whether apportionment is between tortious the defendant’s negligence “material- The last paragraph, cited above, is clearly and non-tortious causes. Apportion- ly contributed” to the occurrence of in accord with the approach set out by ment between tortious and non-tor- the injury. In the present case, it is Justice Wallace in the Pacific Coast Con- tious causes is contrary to the clear that it did. “A contributing factor struction Co. Ltd. case. principles of tort law, because the is material if it falls outside the de defendant would escape full liability In the result, the Supreme Court did minimis range” (see Athey v. Leonati, even though he or she caused or con- apportion between tortious and non-tor- [1996] 3 S.C.R. 458, at para. 15). As tributed to the plaintiff’s entire tious causes in Athey v. Leonati. such, the plaintiff retains the burden injuries. The plaintiff would not be of proving that the failure of the The Supreme Court of Canada also adopt- adequately compensated, since the C.R.C.S. to screen donors with taint- ed the “material contribution” test, dis- plaintiff would not be placed in the ed blood materially contributed to cussed in Athey v. Leonati, in its recent position he or she would have been Walker contracting HIV from the taint- decision of Walker Estate v. York Finch in absent the defendant’s negligence. ed blood. [Emphasis added.] General Hospital, [2001] S.C.J. No. 24. In In the following excerpt, Justice Major Walker Estate, three plaintiffs, Osborne, In situations where there are concurrent sets out some of the general principles to “M”, and Walker, contracted HIV from delays (whether all such delays are non- be considered: blood and blood products supplied by the excusable or some are non-excusable and Canadian Red Cross Society (“Red Causation is established where the one or more are excusable), notwith- Cross”). The plaintiffs claimed that the plaintiff proves to the civil standard standing causation concerns, it would Red Cross was negligent in its procedures on a balance of probabilities that the appear equitable to apportion damages used to screen blood donors. Osborne defendant caused or contributed to amongst the wrongdoers which have and “M” were successful at trial; however, the injury: Snell v. Farrell, [1990] 2 materially contributed to the delay, and the trial judge found that Walker could not S.C.R. 311; McGhee v. National Coal the consequent damages. For example, in prove causation. The Ontario Court of Board, [1972] 3 All E.R. 1008 (H.L.). a situation of pure concurrent delay, such Appeal agreed with the trial judge’s deci- that two or more parties have delayed in The general, but not conclusive, test sion with respect to Osborne and “M”, but performing their obligations in respect of for causation is the “but for” test, reversed the trial judge’s decision with the same time period and the innocent which requires the plaintiff to show respect to Walker finding that if the trial plaintiff is unable to prove which party is that the injury would not have judge applied the correct causal analysis causally responsible, it would appear occurred but for the negligence of the he would have found the necessary clearly inequitable to allow the wrongdo- defendant: Horsely v. MacLaren, causal link. In dismissing the appeal of the ers to escape liability and have the inno- [1972] S.C.R. 441. Red Cross, the Supreme Court of Canada cent claimant incur the entire damage. stated as follows, at paras. 87 and 88: The “but for” test is unworkable in Rather, in appropriate circumstances, the some circumstances, so the courts With respect to negligent donor courts could apply the principles enunci- have recognized that causation is screening, the plaintiffs must estab- ated in the relevant contributory negli- established where the defendant’s lish the duty of care and the standard gence legislation, whether directly or by negligence “materially contributed” of care owed to them by the C.R.C.S. analogy, and apportion the damages (per- to the occurrence of the injury: Myers [the Red Cross]. The plaintiffs must haps equally) amongst the wrongdoers. v. Peel County Board of Education; also prove that the C.R.C.S. caused (In cases where both the claimant and the [1981] 2 S.C.R. 21, Bonnington Cast- their injuries. The unique difficulties defendant(s) have contributed to the ings, Ltd. v. Wardlaw, [1956] 1 All E.R. in proving causation make this area delay, it is inequitable for either the 615 (H.L.); McGhee v. National Coal of negligence atypical. The general claimant or the defendant(s) to incur all of Board, supra. A contributing factor is test for causation in cases where a the damages. In such a case, it may be

7 equitable for the court to apportion the acted independently, judgment was elected to apply contributory negligence damages (perhaps equally).) given against both of them for the full principles to apportion damages amongst amount of the plaintiff’s damages wrongdoers (see: Tompkins, supra, and As contended above, the paradigm situa- because “if each contributed to the Ribic v. Weinstein et al., supra). Important- tion in terms of the inequity inherent in injury, that is enough to bind both”. A ly, however, in provinces where the courts the concurrent delay defence arises similar case is Arneil v. Paterson, are unlikely to apply contributory negli- where at the same time there is an inno- where two dogs were held responsi- gence legislation directly to contract cent plaintiff and two or more other pro- ble for the entire damage “because claims, the courts have nevertheless, in ject participants in delay. Here, the law of each dog did in the eye of the law certain instances, arrived at the same tort, and, in particular, the concept of occasion the whole of the injury of result by holding the defendant liable to “material contribution”, is also relevant. which the pursuers complain”. Thus, if the claimant concurrently in tort and in A.M. Linden in Canadian Tort Law, 6th ed. the concurrent negligence of two contract (see: Husky Oil Operations Ltd. v. (Toronto: Butterworths Canada Ltd., 1997) people combined to kill someone, Oster (1978), 87 D.L.R. (3d) 86 (Sask. Q.B.); writes, at pages 109-110, as follows: each would be equally responsible Canadian Western Natural Gas Co. v. The “but for” test ran into stormy for the death. A group of polluters Pathfinder Surveys Ltd. (1980), 12 Alta. sailing where two or more defen- may be jointly liable though the harm L.R. (2d) 135, 12 C.C.L.T. 211 (C.A.); and dants combined to cause loss. If the caused by each cannot be deter- Dominion Chain Co. Ltd. v. Eastern Con- injury would have transpired if either mined. struction Co. Ltd. (1976), 12 O.R. (2d) 210 (C.A.), aff’d [1978] 2 S.C.R. 1346 in which cause alone had been operating, nei- Importantly, it may be possible to arbitrar- the Ontario Court of Appeal found that the ther party might be a cause under the ily apportion degrees of fault amongst the Ontario Negligence Act does not apply to “but for” test. Suppose A and B neg- wrongdoers. Potentially, this is extremely actions in contract, but allowed contribu- ligently light fires at different places significant dealing with the concurrent tion on the basis that the plaintiff sued in and the fires spread to engulf the delay defence. Specifically, all contributo- both tort and contract). plaintiff’s house. A and B might argue ry negligence legislation provides that if it that the fire would have resulted is not possible to establish degrees of The leading case on the doctrine of con- without their negligence. Conse- fault, then the court must apportion liabil- current liability in contract and tort is the quently, a blinkered court might hold ity equally. For example, Section 1(1) of Supreme Court of Canada decision in that neither of the defendants, the Contributory Negligence Act, R.S.N.B. Central Trust v. Rafuse, [1986] 2 S.C.R. 147. although both negligent, was the 1973, c.C-19, as amended, provides as fol- The principal issue on appeal in Central cause of the loss, because it would lows: Trust v. Rafuse was whether a solicitor have occurred in any event. Where by the fault of two or more was liable to a client in tort and contract This just could not be tolerated and, persons damage or loss is caused to for damages caused by a failure to meet happily, the courts have handled this one or more of them, the liability to the requisite standard of care in the per- situation with common sense. They make good the damage or loss is in formance of services for which the solici- devised the substantial factor test, proportion to the degree in which tor was retained. The Court canvassed the which holds that if the acts of two each person was at fault but if, having law with respect to concurrent liability in people are both substantial factors in regard to all the circumstances of the tort and contract and rejected the require- bringing about the result, then liabili- case, it is not possible to establish ment set out in J. Nunes Diamonds Ltd. v. ty is imposed on both on the theory different degrees of fault, the liability Dom. Elec. Protection Co., [1972] S.C.R. that both “materially contributed to shall be apportioned equally. 769, that tort liability must arise indepen- the occurrence”. Consequently, in dent of contract, holding that the common Lambton v. Mellish, two merry-go- As discussed above, in jurisdictions law duty of care is not confined to rela- round operators were sued for nui- where the courts have determined that tionships which arise apart from contract. sance as a result of the maddening contributory negligence legislation does The effect of the decision was reduced, noise made by their organs. Injunc- not apply to contractual claims the however, as the Court further stated, at tions were granted against them indi- authorities nevertheless exist to support page 206, as follows: vidually, because according to Mr. the proposition that the principles set out A concurrent or alternative liability in Justice Chitty: in the contributory negligence legislation can be applied to allow apportionment in tort will not be admitted if its effect If the acts of two persons, each contract. Accordingly, the presumption of would be to permit the plaintiff to cir- being aware of what the other is equal apportionment of liability may be cumvent or escape a contractual going, amounted in the aggre- available to overcome the causation hur- exclusion of liability for the act or gate to what is an actionable dle inherent in the concurrent delay omission that would constitute the wrong, each is amenable to the defence. tort. Subject to this qualification, remedy against the aggregate where concurrent liability in tort and cause of complaint. The defen- 5. CONCURRENT LIABILITY IN contract exists the plaintiff has the dants here are both responsible right to assert the cause of action that for the noise as a whole so far as TORT AND CONTRACT appears to be most advantageous to it constitutes a nuisance affect- Another important principle which intro- him in respect of any legal conse- ing the Plaintiff, and each must duces flexibility into the assessment of quence. be restrained in respect of his responsibility for damages, and may be In BG Checo International Ltd. v. British own share in making the noise. seen as enhancing access to contributory Columbia (Hydro and Power Authority), negligence legislation, is the principle of In another case, Corey v. Havener, the [1993] 1 S.C.R. 12, Hydro contracted with concurrent liability in contract and tort. plaintiff, in a horse and wagon, was Checo to erect transmission towers and passed by two motorists driving at a As stated above, some Canadian courts string transmission lines on a right of high rate of speed, one on each side. have declined to apply contributory negli- way. The tender documents also provided The horse took fright and the plaintiff gence legislation to claims arising in con- that Checo was to satisfy itself of the site was injured. Although the defendants tract. As an alternative, some courts have conditions and that others would clear the

8 right of way. Hydro contracted the clear- sions to the non-recoverability of pure Unlike the other services cases the ing work to another party and, to Hydro’s economic loss doctrine: owner will, at least in theory, have an knowledge, the work was done inade- adequate legal remedy already under • the independent liability of statutory quately. In fact, no further clearing was the main contract with the general public authorities; done which resulted in Checo having diffi- contractor. For this reason and other culties and increased costs. Checo sued • negligent misrepresentation; reasons, the case in favour of a direct Hydro seeking damages for negligent action against the subcontractor is • negligent performance of a service; misrepresentation, or, in the alternative, not compelling. On the other hand, breach of contract. The contract contained • negligent supply of shoddy goods or provided the relevant obligation an exclusion clause which limited Hydro’s structures; breached in the subcontract is identi- liability for the clearing of the right of way. • relational economic loss. cal to the obligation specified in the The Court followed its decision of Central main contract, there is little harm in Trust v. Rafuse, supra, and held at pages However, the Supreme Court of Canada recognizing the direct suit. The gener- 26-27, as follows: has not restricted recovery to cases falling al contractor may be regarded as a within these categories of exclusions and mere conduit of obligations, and the In our view, the general rule emerg- has applied the Anns test to determine two contracts in effect collapsed into ing from this Court’s decision in Cen- novel cases of pure economic loss which one between the owner and the sub- tral Trust v. Rafuse, [1986] 2 S.C.R. 147, fall outside of these categories. contractor. is that where a given wrong prima facie supports an action in contract In the construction context, where a plain- It must be noted, however, that while Pro- and in tort, the party may sue in tiff claims for delay both in contract and fessor Feldthusen writes that the general either or both, except where the con- tort, the plaintiff might be able to argue contractor may be regarded as a conduit, tract indicates that the parties intend- that its claim falls within the categories of the British Columbia Supreme Court dis- ed to limit or negative the right to sue negligent misrepresentation or negligent missed an owner’s claim against subcon- in tort. This limitation on the general performance of a service. For example, tractors with which it did not have privity rule of concurrency arises because it where a general contractor negligently of contract. In Status Electrical Corp. v. Uni- is always open to parties to limit or represents that it will complete the project versity of British Columbia, [2000] B.C.J. waive the duties which the common by a particular date, and fails to do so, the No. 2569, the University counterclaimed law would impose on them for negli- owner will be able to argue that it can against several of the general contractor’s gence. This principle is of great recover for pure economic loss on the subcontractors alleging that the University importance in preserving a sphere of basis of negligent misrepresentation. A suffered delay damages as a result of the individual liberty and commercial more difficult problem arises where the subcontractors’ negligence. On applica- flexibility. reason for the delay is not a negligent rep- tion, Sigurdson J. dismissed the Universi- resentation as to the completion date, but ty’s counterclaims finding that this was not Therefore, the general rule which where the defendant was negligent in per- the type of situation in which a new cate- emerges from the decisions of Central forming its obligations. gory of recoverable pure economic loss Trust v. Rafuse and BG Checo, is that a should be created, nor should one of the party may sue in both tort and contract Professor Feldthusen in Economic Negli- current categories be expanded. unless the contract limits or regulates the gence, 4th ed. (Toronto: Carswell, 2000) party’s right to sue in tort. sets out the test to determine if a defen- However, Status Electrical is not a case of dant will be held liable for economic loss concurrent liability in contract and tort. To the extent that the defendant is liable for negligently performing a service, at Further, it is curious that Sigurdson J. stat- in negligence, recourse to contributory page 120, as follows: ed that it was not seriously suggested that negligence legislation and caselaw the facts brought the claims within one of There is a general agreement among should be available in all of the common recognized categories. Following the test the courts in all common law jurisdic- law jurisdictions. for negligent performance of a service tions that the defendant will be held illustrated by Professor Feldthusen, set Unfortunately, the utility of the concurrent liable for the plaintiff’s economic loss out above, it would appear that it may liability argument may be limited by the if: (1) the defendant voluntarily have been possible to argue that the sub- doctrine of pure economic loss as devel- undertakes to perform a specific ser- contractor negligently performed a ser- oped by the Supreme Court of Canada in vice for the plaintiff’s benefit; (2) the vice, since the subcontractors voluntarily Canadian National Railway Co. v. Norsk plaintiff relies on the defendant to undertook to perform a service which Pacific Steamship Co., [1992] 1 S.C.R. perform the undertaking; and (3) the directly benefited the University, the Uni- 1021; Winnipeg Condominium Corpora- negligent performance of the service versity relied on the subcontractors, and tion No. 36 v. Bird Construction Co., [1995] injures the plaintiff. 1 S.C.R. 85; Hercules Management Ltd. v. the University suffered loss. Thus, in the construction context, where Ernst & Young, [1997] 2 S.C.R. 165; Bow Nevertheless, the doctrine of pure eco- plaintiff contracts with a defendant to per- Valley Husky (Bermuda) Ltd. v. Saint John nomic loss must be recognized as a pos- form a service, if the defendant is found Shipbuilding Ltd., [1997] 3 S.C.R. 1210; sible limiting factor to advancing a claim concurrently liable in contract and tort, it and Martel Building Ltd. v. Canada, [2000] in negligence. S.C.J. No. 60. is contended that the category of negli- gent performance of a service would The Supreme Court of Canada adopted apply and the plaintiff should be able to 6. SUMMARY the test set out in Anns v. Merton London recover for pure economic loss. Borough Council, [1978] A.C. 728 (H.L.) in Concurrent delay arises where two sepa- Kamloops City v. Nielsen, [1984] 2 S.C.R. 2 Where a delay claim is made by an owner rate delay events occur during the same to determine whether pure economic loss against a subcontractor the courts may time period and both, independently, affect is recoverable. The Supreme Court of arrive at a different conclusion. In this the completion date. As a result, both par- Canada has also adopted the category respect, Professor Feldthusen, in Econom- ties causing the delay may argue that the approach of Professor Feldthusen who ic Negligence, writes, at pages 136-137, as claimant cannot meet the “but for” test sets out the following categories of exclu- follows: and prove the proximate causation which

9 has been traditionally a condition prece- the context of delay analysis, in consider- repair of the damage caused by each dent to compensation. Such a conclusion ing the approaches available to a claims requires 10 days to complete. The bars an innocent claimant from recovery, a consultant, it appears that the collapsed- ship is then taken out of service for 10 result, which on its face, appears to be as-built schedule method may be the days and both repairs are performed unjust. Even where the claimant has mate- most appropriate vehicle for assessing concurrently. From the perspective of rially contributed to the delay, it appears damages. Importantly, a court must be the first tortfeasor the fact that the inequitable to allow a wrongdoer to persuaded that, as between two or more ship had to be taken out of service for escape responsibility through the occur- wrongdoers, responsibility must be allo- 10 days to repair the damage caused rence of a fortuitous event. cated so that the innocent party is made by the second tortfeasor would serve whole. If the claimant is not an “innocent to bar the recovery of damages for In Canadian common law jurisdictions party”, then the claimant must share the the losses suffered during the deten- where the courts have found that contrib- responsibility with the wrongdoers. tion. The second tortfeasor could utory negligence legislation applies to obviously make precisely the same In essence, the solution to the conundrum breach of contract claims, the claimant assertion and argue that it should not of the concurrent delay defence is for the not only has an argument that the court be held liable for the detention as the court to accept that, in circumstances of must do the “best it can” to determine the requirement to repair the damage concurrent delay(s), each person guilty of apportionment of damages between the caused by the first tortfeasor meant non-excusable delay has “materially con- wrongdoers, but, as well, the court, if sat- that the ship would not have been “a tributed” to the critical path delay and is isfied that the defendant has “materially profit-earning machine” during the liable for an apportioned amount of the contributed” to the delay, may rely upon repair period even in the absence of damages suffered, whether specific such legislation to overcome the impedi- the damage caused by the second amounts of damages can be attributed to ment to compensation represented by the tortfeasor. In short, where there are separate causes or not. principle of several liability and to appor- two operative causes of the deten- tion liability (and damages). If the court is In a legal environment which clearly tion, it can be argued by the parties unable to determine the appropriate involves the convergence of contract and respectively responsible for each that apportionment, then, arguably, the court tort theories, it should be open to the court to the extent the detention was may apportion the damages equally. to embrace the tools of contributory negli- caused by the others’ act, it is not In Canadian common law jurisdictions gence legislation and the related caselaw responsible. This would serve to bar where the courts have found that contrib- in order to overcome the hurdle of the the owner from recovering any utory negligence legislation does not restrictive approach to causation which is detention losses caused by concur- apply to breach of contract claims, the inherent in the concurrent delay defence. rent repairs due to two separate inci- claimant may nevertheless argue that the dents that the owner, by default, The fundamental challenge posed by the court must do the “best it can” to deter- would end up bearing the loss. concurrent delay defence itself was clear- mine the damages, and the claimant may ly articulated, in obiter, by McLachlin J. This result would appear, ab initio, an also argue that the court, so long as it is (as she then was), of the Supreme Court incorrect one and particularly unfair satisfied that the defendant has “material- of Canada, (dissenting) in Sunrise Co. v. when all the damage was tortiously ly contributed” to the delay, should, by Lake Winnipeg (The), [1991] 1 S.C.R. 3, caused. To avoid such result, it is nec- analogy, apply contributory negligence where she stated: essary to introduce a factor other principles and apportion liability (and than pure causation. What is required damages) accordingly, or that the defen- … Moreover, it can be argued that is a rule that says (a) that one of the dant(s) are concurrently liable in negli- applying strict logic, adoption of this two causes of the concurrent loss is gence, giving rise to the apportionment approach might result in the defen- responsible (e.g., the “first in time” powers provided by the contributory neg- dant’s recovering nothing in the case rule) or (b) that the concurrent delay ligence legislation. where its ship is damaged by two should be apportioned between the consecutive tortfeasors and the time Normally, it is only after the court is satis- two causes of the concurrent loss. required to effect both sets of repairs fied that causation has been established was the same. that it will turn to an assessment of the Here, Chief Justice McLachlin identified damages suffered, the issue as to whether The following example illustrates this the need for a solution to the conundrum the claimant is contributorily responsible, conclusion. Assume that the ship was of the concurrent delay defence, and, with and a potential apportionment as damaged in two separate and unre- respect, advanced a modest proposal between the wrongdoers. Accordingly, in lated tortious collisions, and that the which we have endeavoured to further.

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