The issue of concurrent delay is rarely dealt with in the Ontario courts or, indeed, anywhere. This is largely due to the prevalence of alternative dispute resolution (ADR) mechanisms in the construction industry. However, the January 18, 2021 decision of the Ontario Superior Court of Justice in Schindler Elevator Corporation v. Walsh Construction Company of Canada¹ made up for the scarcity of case law in this area, by setting out a clear definition of what the courts will judge to be concurrent delay and also by allowing an approach of apportionment of liability, based on proportionate responsibility for the delay.

Schindler Elevator v Walsh Construction

The project was for the construction of a new hospital in Toronto, which was to be carried out by the Walsh Construction / Bondfield Partnership (WBP), with Schindler hired as the elevator subcontractor. Schindler went on to bring a claim for unpaid services and materials against WBP.  WBP responded with a counterclaim alleging that Schindler had caused delays and that Schindler were liable for their share of delay damages as a result of the various delays which occurred around the same time. By recognising that other contractors contributed to the delay in the same period, WPB opened the door to arguments around concurrent delay.

Defining Concurrent Delay

In setting out their case, Schindler engaged an expert witness who argued that, to be deemed a concurrent delay, there must be “two co-critical, co-controlling activities that are parallel in time and identical in duration”² This definition of concurrency is often described as ‘true concurrency’.³

However, this interpretation was rejected by the judge as too rigid; highlighting the rarity of circumstances where delays commence and finish at the same time, and the difficulty this poses in attaining a fair and just result in complex construction cases. Instead, the judge chose to build upon the definition that Glenn Grenier had set out in his article for the Construction Law Review:

“It is not necessary for the independent causes of delay to occur exactly at the same time for them to be considered concurrent. Indeed, it is rare that concurrent delays start and end at the same time. Concurrent delays are more commonly experienced as overlapping events.” ⁴

“Fair and Just”

In considering how to deliver a fair and just result, the judge held that a more practical approach should be taken: the proportional impact of each of the identified delays should be considered and responsibility apportioned in respect of time and cost accordingly. In the Schindler case, this meant that WBP were able to set aside some of the costs incurred from their payments due to Schindler, but only to the extent of what could be demonstrated as the costs associated with the delay caused by Schindler.

Similarities with City Inn

The similarity between this case and the City Inn judgments from the Scottish courts is striking. City Inn similarly laid down the precedent that the “true concurrency” definition should not be used in determining if there is entitlement. Rather, the key principles of “fairness and reasonableness” ⁵ should be held as paramount. This is supported by a very similar apportionment approach as laid out in the Schindler judgement. City Inn also gives consideration to methods of analysis than the Schindler case, with a majority of judges stating, on appeal, that it’s preferable to allow for a more flexible use of critical path analysis; if valuable analysis exists then it should be used, where it does not, this is not necessarily fatal to a case. ⁶ In the event of the latter, a common-sense approach is encouraged. Given the similarities between Schindler and City Inn, it may not be surprising to see similar arguments in Canada as to how to assess apportionment in the future, particularly in the more time- and cost-conscious process of adjudication.

Impacts on Canadian Construction

As highlighted at the start of this article, most issues around concurrent delay are settled via ADR. The majority of Canadian contracts do not directly deal with concurrent delay, rather simply setting out delay provisions more generally and setting out the approach to dispute resolution. While P3 contracts are more likely to capture specific rules around concurrent delay, this is still rarely seen in practice and is the exception rather than the rule.

As a result of this new judicial approval of the apportionment approach to concurrent delay, contracts under Ontario law must take notice, and those working in other common law provinces should give it serious consideration. Focus should now be drawn even closer to the evidential aspects of delay. Where we undertake forensic schedule analysis and keep records in accordance with best practice, it becomes much easier to demonstrate concurrent delays and to apportion any remedies accurately, thus mitigating risk.

The central principle of the Schindler case is that concurrent delays should be assessed on the facts of the case, with a focus upon proportionality, fairness and justice; much as was the case in City Inn. It seems likely that the approach set out in this case will lead to more delays being interpreted as concurrent in Ontario. In order to provide the best chance of success, further focus should be placed on good record-keeping practices, schedule updates and schedule analysis. In a paradigm of apportionment and fairness, good and clear evidence will be the key determinant of any dispute’s successful conclusion.

^References

¹ Schindler Elevator Corporation v Walsh Construction Company of Canada, 2021 ONSC 283.
² Schindler v Walsh at [346]
³ Including, for example, in the SCL Protocol on Delay and Disruption, 2^nd edition, 2017
⁴ G. Grenier, Evaluating Concurrent Delay: Unscrambling The Egg (2006) 53 C.L.R. (3d) 46, 2
⁵ City Inn v Shepherd Construction Ltd [2007] CSOH 190; [2010] CSIH 68
⁶ City Inn v Shepherd Construction Ltd [2010] CSIH 68