The consultant plays an important role in any construction project. The consultant is obligated to fulfill its role in impartial manner, even though a contractor or owner may not always agree with the consultant's determinations. If that happens, it's important to understand how the Court treats a consultant's findings when a dispute arises and the consultant's findings are at issue. This issue is discussed in ASC (AB) Facility Inc. v. Man-Shield (Alta) Construction, 2018 ABQB 130.
ASC terminated Man-Shield's right to continue the work, and Man-Shield registered a lien that included invoices issued both before and after termination. The parties proceeded to a summary trial to try to resolve their disputes in respect of what work was performed by Man-Shield and the extent of the deficiencies in respect of this work.
The consultant determined that some of Man-Shield's work was not performed to satisfy its contractual requirements and concluded that ASC was entitled to deduct the value of that work from amounts otherwise owing to Man-Shield. Man-Shield argued that, while deference is owed to a consultant's decisions during the life of the contract, no deference is owed after the contract is terminated. In citing various sources, the Court disagreed with Man-Shield that no deference should be given to a consultant's decisions made after a contract is terminated, as the consultant still has the opportunity to observe the work and the expertise to evaluate it. The Court found this opportunity and expertise continues to apply despite termination of the contract as between the owner and the contractor.
In terms of identifying the "test" for deference, the Court held that unless a consultant's determinations of fact or contractual interpretation reveal significant errors, the Court will defer to them. The Court further found that although the consultant had made superficial errors requiring correction, this did not decrease the level of deference to be given to its findings, stating that a consultant cannot be held to a standard of perfection. Lastly, the Court found that Man-Shield had the onus to establish demonstrable and significant error in the consultant's determinations, and ASC could use the consultant's determinations as a form of prima facie evidence of deficiencies in Man-Shield's work.
If you are an owner or a contractor on a construction project and find yourself in a position where you either want to rely on a consultant's findings or alternatively dispute them, contact Catriona Otto-Johnston, lawyer and Partner at Field LLP, to discuss your options.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
