Concurrency Clarified: Ontario Superior Court of Justice Favours Flexible, Practical Approach to Assessing Concurrent Delays

The Ontario Superior Court of Justice has confirmed that a realistic, practical approach should be adopted in allocating fault and damages arising from concurrent delays involving multiple project participants. The Court has also confirmed that to be considered “concurrent”, delays may overlap, but need not be identical in duration.

The Court’s Approach

In the recent case of Schindler Elevator Corporation v. Walsh Construction Company of Canada,[1] the Court considered damages arising from alleged concurrent delays caused by a number of subcontractors, including Schindler Elevator Corporation (“Schindler“), in relation to the construction of the Women’s College Hospital Capital Redevelopment Project (the “Project“). Schindler made a claim against the design-builder, Walsh Construction/Bondfield Partnership (“WBP“) on this P3 Project, for unpaid amounts. WBP counterclaimed and sought set-off against Schindler for, inter alia, damages arising from delays. WBP asserted that Schindler ought to be held liable for a share of WBP’s losses proportionate to Schindler’s contribution to the overall delay because a significant portion of the delays allegedly caused by Schindler were concurrent with delays by other subcontractors. Accordingly, the Court was required to consider the concepts of causation and damages in the context of concurrent delays.

The Court determined that, in relation to concurrent delays arising in complex construction scenarios, fault ought to be examined through a “material contribution” lens, rather than by strictly applying the “but for” test; that is, because it will usually be “impossible” to determine whether the alleged delays and losses would have been incurred “but for” the conduct of one particular contractor/subcontractor/supplier, the courts will tend to evaluate fault based upon whether a particular party’s conduct “materially contributed” to the overall delays and resulting damages.[2] Courts will then generally break the overall delay into its component parts and apportion time, responsibility, and associated damages.[3]

Schindler asserted that delays it was alleged to have caused were not on the critical path of the Project, and accordingly, did not cause any damages which may have been incurred by WBP.[4] Schindler, through its expert, took the position that to be considered “concurrent” with the delays caused by other Project participants, such that the delays allegedly caused by Schindler could form part of the basis for an award of damages to WBP, the delays caused by Schindler must have been co-critical and co-controlling, and parallel in time and identical in duration with the other subject delays, which they were not.[5]

The Court rejected Schindler’s approach to concurrency, and instead found that “concurrent” delays need not occur at exactly the same time and instead could be overlapping, and that, in reality, such delays rarely occur in exactly identical duration.[6] The Court stated that it viewed Schindler’s position as akin to a “but for” analysis, which could unfairly lead to one party being held solely responsible for a particular delay, even where the evidence supports a finding against multiple parties delaying a project.[7] One can also envision a scenario where, if such an approach were to be applied, the injured party would be left with no recourse despite multiple actors contributing to a project delay.

Ultimately, the Court held that there was insufficient evidence to support to a finding that Schindler’s work caused or materially contributed to overall critical path delay, but that Schindler’s work did delay immediate successor events, and assessed damages on that basis.[8]

Implications

Due to the prevalence of alternative dispute mechanisms on large, complex construction projects in Canada, case law with respect to assessment and allocation of fault of concurrent delays is relatively rare. Accordingly, even though the Court’s analysis affirms an approach to concurrent delays that has been applied in previous cases, the guidance afforded by Schindler is valuable given the lack of reported decisions on the topic.

Project participants can apply the guidance from Schindler by ensuring robust documentary and other record-keeping practices with respect to project scheduling. In addition, participants should ensure adherence to any notice provisions in their contracts with respect to delay. In the event a dispute arises, it will be critical that parties be able to show the effect of any relevant activities on the overall project progress and with respect to any asserted delays.

[1] 2021 ONSC 283 (Ont Sup Ct) [Schindler].

[2] Ibid at paras 292-294.

[3] Ibid at para 303.

[4] Ibid at para 345.

[5] Ibid at para 346.

[6] Ibid.

[7] Ibid.

[8] Ibid at paras 347-348.

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