OHL Construction Canada and Fomento Construcciones Y Contratas Canada Limited Partnership v. Toronto Transit Commission, 2015 ONSC 2712

Case Summary

A contractor commenced a $205 million action against a public transit authority arising from a major subway expansion contract. The authority moved under Rule 21.01(1)(a) for determination of a contractual clause prohibiting litigation until the contractor’s final invoice had been processed, and sought a stay under s. 106 of the Courts of Justice Act. The court held that interpretation of the clause was a pure question of contractual interpretation suitable for determination on a Rule 21 motion. The provision was enforceable between sophisticated commercial parties and clearly prohibited commencing an action before the contractual triggering event. As the triggering event had not yet occurred, the action was stayed pending its occurrence.

SUPERIOR COURT OF JUSTICE - ONTARIO

COURT FILE NO.: CV-14-503388
DATE: 20150610

RE: OHL Construction Canada and Fomento Construcciones Y Contratas Canada Limited Partnership, Responding Party (Plaintiff/Defendant by Counterclaim)

AND:

Toronto Transit Commission, Moving Party (Defendant/Plaintiff by Counterclaim)

BEFORE: Carole J. Brown

COUNSEL:
Harvey J. Kirsh, for the Responding Party
Paul A. Ivanoff and Kevin O’Brien, for the Moving Party

HEARD: April 21, 2015

ENDORSEMENT

[1] The responding party, OHL, is one of several contractors hired by the moving party, the TTC, to work on the Toronto-York Spadina Subway Extension Project (“the TYSSE”), a major expansion of the existing TTC. This Court has recently described the TYSSE as “an enormous infrastructure project involving construction companies and personnel in countless contracts relating to the construction of this new subway”: Advanced Construction Techniques Ltd. v. OHL Construction Canada, 2013 ONSC 7505 at para. 22. The parties entered into a contract, A35-26 – Highway 407 Station and The Northern Tunnels, on February 2, 2011. The contract prohibits commencement of an action prior to the processing of the contractors last invoice by the TTC, in order that all potential claims are brought together at the end of the contract work rather than piecemeal. The original value of the contract was $404,387,479.

[2] OHL, the plaintiff in the main action and the responding party on the motion, commenced an action against the TTC on May 5, 2014. The claims arise out of OHL’s work under the contract. The plaintiff seeks declaratory and other relief, as well as damages of $205,000,000 arising out of more than 90 individual claims. OHL also seeks full indemnity for any and all claims brought against it by its subcontractors.

[3] The TTC, defendant in the main action and the moving party on the motion, brings this motion pursuant to r. 21.01(1) (a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (“the Rules”), for a determination before trial of a question of law, viz. whether the contract between the parties prevents the plaintiff from bringing an action or proceeding until the occurrence of the “triggering event.” The moving party further seeks an order pursuant s. 106 to the Courts of Justice Act, R.S.O. 1990, c. C.43, staying this action pending the occurrence of the triggering event, namely the processing of OHL’s final invoice by the TTC pursuant to the terms of the contract signed between the parties.

(Full text continues exactly as in the source decision.)

OHL Construction Canada and Fomento Construcciones Y Contratas Canada Limited Partnership v. Toronto Transit Commission, 2015 ONSC 2712

Case Summary

SUPERIOR COURT OF JUSTICE - ONTARIO

ENDORSEMENT

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Counsel

Parties

Areas of Law

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