Litigation, experts and public-sector disputes

Most construction disputes in Canada that are not settled, adjudicated or arbitrated end up in court. Court proceedings are slow and expensive, but they are public, they bind everyone who is a party, they allow all the parties to a project to be joined in one action, and they provide appeals. This lesson covers the main features of construction litigation in Canada, limitation periods, expert evidence and the special features of disputes with public owners. It builds on CON-220 lesson 12.

Construction litigation

Construction claims in Canada are usually brought in the superior court of the province, often in a commercial or construction list where one exists. Lien claims have their own procedure: in Ontario, under the Construction Act, a lien must be preserved and then perfected by starting an action within strict time limits, and the action proceeds under the Act's procedure, which may be referred to a master or associate judge for trial. Missing a lien deadline loses the lien, though not the underlying contract claim. Lien rules and deadlines differ in every province.

A typical action passes through pleadings, document discovery, oral examinations or depositions, expert reports, mediation (mandatory in some courts), pretrial conferences and trial. A large construction case can take several years to reach trial. Discovery is often the most expensive stage, because construction projects generate enormous volumes of email, drawings, schedules and photographs, and both parties must produce what is relevant. Good document management during the project, the subject of lesson 12, directly reduces the cost of litigation.

Joining all the parties is one of litigation's real advantages. On Ashford, a court action by Kestrel Ridge against the City of Ashford could be joined with the city's claim against Halloway Partners for the truss design error and Kestrel Ridge's claims against its subcontractors, so that one court decides who bears the cost. In arbitration, that is possible only if all the parties have agreed to the same arbitration.

Limitation periods

A limitation period is the time within which a claim must be started in court or arbitration; after it expires, the claim is barred. In Ontario, the Limitations Act, 2002 sets a basic two-year period running from the day the claim was discovered, meaning the day the claimant knew or ought to have known of the loss, that it was caused by the defendant and that a proceeding was appropriate, and an ultimate period of 15 years from the act or omission. Most other common-law provinces have similar two-year basic periods with different ultimate periods. Quebec's Civil Code generally provides three years. Contract terms may also require a claim to be started sooner, where the statute permits.

Negotiations do not stop the clock unless the parties sign a standstill or tolling agreement. Many claims are lost because the parties were 'still talking' when the period expired. A claimant should diary the limitation date for each claim from the day it is rejected or the loss is known, and either start proceedings or obtain a written standstill before it passes.

# Limitation and lien diary for the Ashford claims (Ontario-style rules, simplified; check the statutes)
from datetime import date

def add_years(d, n):
    try:
        return d.replace(year=d.year + n)
    except ValueError:               # 29 February
        return d.replace(year=d.year + n, day=28)

events = [
    ("Fill change balance refused",      date(2025, 6, 30)),
    ("Truss delay claim rejected",       date(2025, 12, 12)),
    ("Tiling disruption claim rejected", date(2026, 3, 20)),
]
for name, discovered in events:
    print(f"{name:<34} discovered {discovered}  basic 2-year period ends {add_years(discovered, 2)}")
# Ultimate limitation: 15 years from the act or omission, regardless of discovery
print("Ultimate period for an omission on 2025-06-30 ends", add_years(date(2025, 6, 30), 15))

Fill change balance refused        discovered 2025-06-30  basic 2-year period ends 2027-06-30
Truss delay claim rejected         discovered 2025-12-12  basic 2-year period ends 2027-12-12
Tiling disruption claim rejected   discovered 2026-03-20  basic 2-year period ends 2028-03-20
Ultimate period for an omission on 2025-06-30 ends 2040-06-30

In practice the 'discovery' date is arguable, so a careful claimant uses the earliest plausible date. Kestrel Ridge should not wait until December 2027 to act on the truss claim just because the rejection was in December 2025; the city could argue that the loss was known when the redesign was issued in July 2025. Note also that a lien has much shorter deadlines than the limitation period: in Ontario, a lien must be preserved within 60 days of the relevant trigger, such as publication of the certificate of substantial performance or completion of the contractor's supply.

Public owners in Canada

Disputes with public owners raise particular issues. Municipalities, provinces and federal departments are bound by procurement rules, budget approvals and accountability requirements that affect how they settle. Some statutes require written notice of claims against municipalities within short periods for particular kinds of claims, and Crown proceedings statutes set procedural rules for suing the Crown. Public owners may need council or Treasury Board approval to settle above certain amounts, and their settlements may be public.

Federal construction contracts include their own general conditions and dispute provisions. The Office of the Procurement Ombud, an independent federal office, reviews certain complaints about the administration of federal contracts and offers alternative dispute resolution services for federal contract disputes, which suppliers can request. Since December 9, 2023, the Federal Prompt Payment for Construction Work Act has given parties on federal construction projects access to adjudication through CanDACC, with the federal government bound by determinations.

The City of Ashford's approval process matters to Kestrel Ridge. If the city's project manager can settle only up to $250,000 and the negotiated figure is $450,000, the settlement must go to council in a public report. Kestrel Ridge should expect that, and allow for the meeting schedule, rather than treating the delay as bad faith.

Expert evidence

Most construction disputes of any size need experts: schedule experts for delay, quantum experts for cost, and technical experts for design, workmanship or geotechnical issues. The tribunal relies on them to explain matters outside its expertise. Their duty is to the tribunal, not to the party that pays them.

In Canada, the Supreme Court in White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23, confirmed that an expert owes a duty to the court to be fair, objective and non-partisan, and that an expert who is unable or unwilling to meet that duty should not be permitted to testify. Ontario's Rules of Civil Procedure require experts to sign an acknowledgment of their duty (rule 53.03 and Form 53), and other provinces have similar rules. Arbitral tribunals apply similar standards, often through the rules the parties chose or guidelines adopted in the procedural order.

On Ashford, the schedule experts would likely agree on the windows analysis method from lesson 5 and on most of the windows, and disagree on the crane breakdown and on whether the consultant's redesign period was reasonable. A joint statement narrowing the dispute to those two issues could save weeks of hearing time and is the kind of step that tribunals in both countries increasingly require.

Costs of litigation

In Canadian courts the successful party is usually awarded part of its legal costs, commonly on a partial indemnity scale that covers a fraction of what it actually spent, and the court has discretion to adjust costs for the parties' conduct. Formal offers to settle under the rules of court, such as Ontario's rule 49, shift the costs consequences: a party that rejects an offer and then does worse at trial may have to pay more of the other side's costs. That makes a well-judged early offer a powerful tool. Kestrel Ridge could serve an offer to settle at a figure inside the zone of agreement from lesson 9; if the city refused it and the court later awarded more, the city would bear an increased share of Kestrel Ridge's costs from the date of the offer. Costs rules therefore belong in the decision tree, and both parties should review their offers whenever the evidence changes, for example after expert reports are exchanged.