Rescission May Be Available Even If Innocent Third Parties Adversely Affected

Sabrina Saltmarsh, B.A. (Hons), J.D.Business Litigation, Commercial and Contract Litigation, Commercial Litigation, Construction Litigation, Contract Disputes, Real Estate Litigation0 Comments

In the recent Court of Appeal decision of Urban Mechanical Contracting Ltd. v. Zurich Insurance Company Ltd., 2022 ONCA 589, the Court of Appeal considered whether rescission is ever available as a matter of law when the rights of innocent third parties intervene and restitutio in integrum (putting the parties back to their original position) is impossible. The court answered in the affirmative. In the case the appellants brought two applications seeking a determination of whether, as a matter of law, a bond issuer can rescind a bond agreement on the basis of fraudulent misrepresentations and collusion when doing so would affect the rights of innocent parties. Background The case dealt with a public-private redevelopment project with infrastructure Ontario to build a new 17-storey patient care tower (the Project). The construction was to be financed and carried out by the private sector. The Project was subject to Ontario’s procurement process … Read More

When Construction Contracts Go Awry: Ontario’s New Construction Contract Adjudication Regime

Sabrina Saltmarsh, B.A. (Hons), J.D.Commercial Litigation, Construction | Builders, Construction Equipment & Machinery, Construction Liens, Construction Litigation, Contract Disputes, Cottage Litigation, Professional Liability, Recreational Property Litigation0 Comments

Construction contracts come with expectations and potential risks to property owners and contractors. Property owners can face issues related to quality of workmanship, delays, and incomplete or abandoned work. Contractors (including sub-contractors) can deal with a myriad of problems which delay or hinder payment, including issues with other sub-trades, the general contractor, or the owner. Whether you are a property owner undertaking construction or renovations, or a contractor (or sub contract) who has been engaged on a project, if things don’t go as planned it’s important to know what your options for recourse may be. A newly established cost-effective adjudication regime has become an important option to consider. Want to learn more about how to protect yourself from a home renovation disaster? Check out our blog. With the Ontario Legislature’s ratification of the new Construction Act, prompt payment and adjudication came into effect on October 1, 2019. The new legislation … Read More