No Notice, No Claim: Ontario Courts Uphold Strict Notice Requirements in Construction Contracts
Key Takeaway
Reading a construction contract and following its terms are paramount, as Ontario courts continue to lean towards strict compliance with respect to notice provisions in construction contracts.
In Elite Construction Inc. v. Canada (Attorney General), the Ontario Court of Appeal upheld a summary judgment dismissing a contractor’s multimillion-dollar claim for additional compensation and delay because it failed to give timely written notice as required under the contract.
The Court reaffirmed that contractual notice provisions in construction contracts will be strictly enforced. This decision serves as a clear reminder that failure to provide notice in accordance with the contract can be fatal.
Background
In Elite, the Government of Canada (“Canada”) contracted with Elite Construction (“Elite”) to construct a penitentiary. The contract contained detailed provisions governing changes, delays, extensions of time, and dispute resolution. Specifically, the contract required Elite to provide written notice of any intention to claim additional compensation or damages within ten working days of the date the neglect or delay first occurred.
After substantial completion of the project, Elite sought approximately $4.1 million in damages for alleged delays and extra work.
Canada moved for summary judgment, arguing that Elite’s claims were barred due to non-compliance with the notice requirements.
The Decision
The Court of Appeal dismissed the appeal and upheld the lower court’s decision, finding that Elite’s failure to comply with the contractual notice provisions extinguished its right to claim additional compensation.
In short, compliance with a notice provision is a condition precedent to maintaining a claim in the courts.
While there are limited case law exceptions to notice requirements — such as actual knowledge of the claim, waiver of strict compliance, or rights preserved under the Construction Act — parties must still carefully read their agreements and ensure any claims align with their contractual obligations, or risk facing a devastating summary judgment motion.