COURT FILE NO.: Court File No. CV-22-00690264-0000 DATE: 20240418 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: HIS MAJESTY THE KING IN RIGHT OF ONTARIO, as represented by the Minister of Transportation Plaintiff - and - J & P LEVEQUE BROS. HAULAGE LTD. Defendant

Counsel: William R. MacLarkey for the Plaintiff James A. LeBer and Felicia Lozon for the Defendant

HEARD: March 21, 2024

PERELL, J.

Contents

A. Introduction B. Procedural Background C. The Construction Contract D. Claims Review Process, Referee Review Process, and Resort to Litigation E. Dispute Resolution Chronology F. Is the Case Appropriate for a Summary Judgment? G. Does the Limitation Period in the Construction Contract Apply to Bar MTO’s Claim as Untimely? H. Can Leveque Rely on the Limitation Period in the Construction Contract? I. Should the Court Grant MTO Relief from Forfeiture? J. Conclusion Schedule “A” – Excerpts from Construction Contract

REASONS FOR DECISION

A. Introduction

[1] In this action, the Ontario Government (His Majesty the King in Right of Ontario, as represented by the Minister of Transportation) (“MTO”) sues J & P Leveque Bros. Haulage Ltd. (“Leveque”), a highway construction contractor for $1,769,023,40. The approximately $1.8 million claimed by the MTO was part of an award made by a Referee Panel of the Alternative Dispute Resolution Institute of Ontario.

[2] MTO submits that pursuant to the Construction Contract between it and Leveque, the Referee’s award was only provisional and that MTO is entitled to sue for a refund of the approximately $1.8 million it had paid Leveque.

[3] Now before the court is Leveque’s motion for a summary judgment dismissing MTO’s claim based on a technical argument. In its summary judgment motion, Leveque submits that MTO’s resort to litigation is out of time pursuant to the dispute resolution provisions of the Construction Contract.

[4] Leveque’s technical argument is that: (a) the Construction Contract is a “business agreement” within the meaning of s. 22 of the Limitations Act, 2002, and (b) MTO’s claim is barred by the terms of that Construction Contract. In other words, although MTO’s claim would be timely under sections 4 and 5 of the Limitations Act, 2002, Leveque submits that those time periods have been replaced by the time limits prescribed by the parties in their business agreement and thus MTO’s resort to litigation is untimely.

[5] MTO accepts that the Construction Contract is a “business agreement”; however, it submits that properly interpreted, the language of the Construction Contract has not supplanted the limitation period under the Limitations Act, 2002.

[6] For the reasons that follow, I agree with Leveque’s technical argument, and I grant summary judgment dismissing MTO’s action.

B. Procedural Background

[7] On November 14, 2022, MTO commenced its action against Leveque by Statement of Claim.

[8] On January 13, 2023, Leveque delivered its Statement of Defence.

[9] On February 8, 2023, Leveque brought a motion for a summary judgment.

[10] On February 28, 2023, MTO delivered its Reply to Leveque’s Statement of Defence.

[11] Leveque’s motion for summary judgment was supported by the affidavits dated January 13, 3023 and April 28, 2023 of Dan Robinson. Mr. Robinson is a professional engineer employed by Leveque. He was the Project Engineer for the highway construction work performed by Leveque under the Construction Contract.

[12] The MTO resisted the summary judgment motion, and it relied on the affidavit dated April 3, 2023 of Kevin English. Mr. English is a professional engineer employed by MTO. Since 2018, he has been the MTO’s Manager, Contract Claims Office. He supervises MTO staff that review, analyze and negotiate contractors’ claims across MTO construction projects. He also supervises the preparation of MTO Referee submissions. In the immediate case, he oversaw MTO’s third level of claim review, the Provincial Review, and he oversaw the preparation of MTO’s submission for Leveque’s Claim #12.

[13] On November 2, 2023, Mr. Robinson was cross-examined.

[14] Mr. English was not cross-examined.

[15] The summary judgment motion was argued on March 21, 2024.

C. The Construction Contract

[16] On July 26, 2017, the Minister of Transportation of the Ministry of Transportation of Ontario (the “MTO”) issued a public tender for the rehabilitation of 27 kilometres of Highway 60. Leveque made a tender bid of $12.9 million, which bid was accepted.

[17] On September 14, 2017, MTO awarded Leveque the Construction Contract for the removal and replacement of asphalt, grading, and drainage improvement. The Construction Contract included: (a) the Tender; (b) Drawings and Standard Drawings; and (c) the MTO General Conditions of Contract applicable to Ontario Provincial Standard Special Provisions, (the “General Conditions”).

[18] For present purposes, the relevant provisions from the Construction Contract are set out in Schedule A to these Reasons for Decision.

D. Claims Review Process, Referee Review Process, and Resort to Litigation

[19] Pursuant to the Definitions of “Construction Contract” and “Notice of Protest” and clauses GC 3.14.13.07.03 and GC 3.14.14.02 of the Construction Contract, neither MTO nor Leveque could resort to litigation unless (a) the Contract Review process and/or the Review Process had run their course, and (b) the litigation was commenced no later than two years after the date of Contract Completion.

[20] The Construction Contract provided an elaborate dispute resolution system involving a three-level Claims Review Process, a Referee Process, a Referee’s Decision, a Notice of Protest, and a sixty-day period to explore alternative dispute resolution processes, after which either MTO or Leveque could resort to litigation. This elaborate scheme involved the following steps:

a. The first step of the Claims Review Process is the delivery of an RFC (Request for Clarification) to the Contract Administrator. WSP Canada was the Contractor Administrator retained by the MTO.

b. The next step of the Claims Review Process is a Field Level Review. The timeline for the Field Level Review is 30 Business Days. After the Field Level Decision, which is made by the Contract Administrator, the contractor then has 15 Business Days to accept or reject the Field Level Decision and if rejected, 15 Business Days to submit a Notice of Claim for a Regional Level Review or to activate the Referee Process. (The Referee Process can be initiated by the Contractor after the conclusion of any level of the Claims Review Process and by MTO after a Regional Level Decision or a Provincial Level Decision.)

c. The timeline for the Regional Level Decision is 60 Business Days from the delivery of the Notice of Claim. After the Regional Level Decision, which is made by the MTO Regional Manager, Operations Office, the contractor then has 15 Business Days to accept or reject the Regional Level Decision and if rejected, 15 Business Days to elevate the claim for a Provincial Level Review or to activate the Referee Process. After a Regional Level Decision, the MTO may also elect to activate the Referee Process.

d. The timeline for the Provincial Level Decision is 60 Business Days. After the Provincial Level Decision, which is made by MTO’s Manager, Claims Office, the contractor has 15 Business Days to request the Referee Process. After a Provincial Level Decision, the MTO may also elect to submit the claim to the Referee Process.

e. A Referee or Referee Panel is selected based on the amount at issue and in accordance with GC 3.14.13.03 – “Referee Selection.” Typically, it takes approximately two months to select a Referee/Referee Panel and execute the standard form Referee Services Agreement (“RSA”) or Referee Services Panel Agreement (“RSPA”), pursuant to GC 3.14.13.04 of the construction contract.

f. The prescribed Referee Services Panel Agreement (2017-5126-REF-012) specifies that the entire Referee Process must be completed within 90 Business Days from referral of the Claim to the Referee Panel. More particularly, ss. 9.08 - of the Referee Services Panel Agreement states:

RS 9.08 The Referee Panel’s written provisionally binding decision, with reasons, shall be delivered to the Ministry and the Contractor:

(a) within 15 business days after the Referee Panel has:

(i) received the submissions pursuant to RS 9.02 to RS 9.03 inclusive;

(ii) held meeting pursuant to RS 9.04; and

(iii) completed RS 9.05 if required by the Referee Panel; and

(b) in no event later than 90 business days after the Claim was referred to the Referee Panel in accordance with RS 1.01.

RS 9.09 The Referee Panel’s written decision shall be provisionally binding on the Ministry and the Contractor and both parties shall abide by the decision(s) of the Referee Panel ruling and carry out the award without delay. The Referee panel decision shall continue to be provisionally binding on the Ministry and the Contractor unless and until otherwise resolved in accordance with GC 3.14.14.02.

RS 9.10 If a party disputes the Referee Panel’s decision, that party shall deliver a Notice of Protest to the other party within 30 business days of receipt of the Referee Panel’s written decision.

g. The Referee’s decision is provisionally binding on both parties subject to the right of either party to protest the decision. The Referee’s decision is final and binding unless either party delivers a Notice of Protest within 30 Business Days of the release of the decision.

h. To deny the provisional decision and to commence litigation, a party must deliver a “Notice of Protest,” then explore alternative dispute resolution for 60 Business Days all to be completed no later than two years after the date of Contract Completion.

i. The contractor may not resort to litigation without having completed the Claims Review Process, the Referee Review Process and having issued a Notice of Protest and having explored alternative means of dispute, all to be completed no later than two years after the date of Contract Completion.

[21] Recalling that Business Days are used for the time periods, if the Claims Review Process proceeds through all three stages, it typically requires approximately a year from the RFC to a request for the Referee Process. The selection of a Referee Panel and the execution of the standard form of RSA typically takes approximately 2 months from the time a Claim is referred to a Referee Panel for a determination, and another approximately 4.5 months for a decision from the Referee Panel. In other words, the Referee Process typically takes approximately 6.5 months to complete.

[22] In the immediate case, before the Referee’s Decision was released, neither party requested an extension of time to challenge the provisional decision of the Referee Panel.

[23] Mr. English, Manager of MTO’s Claims Office, confirmed that historically: (a) there has never been a need to extend the two-year timeline for reviewing a Referee Decision, and (b) across all MTO projects and over 80 independent Referee Processes to date, there has never been a Referee Decision delivered outside of two years from Contract Completion.

E. Dispute Resolution Chronology

[24] Beginning in the fall of 2018, Leveque claimed that it was entitled to be paid for additional Working Days and also payment for 35 days of Standby Time. The last claim for Standby Time was for December 7, 2018.

[25] On July 9, 2019, the contract was completed. In accordance with the terms of the Construction Contract this meant, as described in more detail above, that if either party wished to resort to litigation, then: (a) the elaborate dispute resolution system would have to be completed; and (b) the litigation commenced by no later July 9, 2021.

[26] However, on July 9, 2019, the parties would not have known that the contractual limitation period had begun to run because the Certificate of Contract Completion had not yet been issued. (The Certificate was issued six months later by the MTO on January 9, 2020.) Had the parties been able to think about it on July 9, 2019, they would have appreciated that pursuant to the Construction Contract, for either party to pursue litigation, the Referee Process would have to have been completed and a Notice of Protest would have had to have been delivered at least 60 Business Days before July 9, 2021 thereby allowing for the exploration of alternative dispute resolution mechanisms before resorting to litigation. In other words, although the parties would not have known about it on July 9, 2019, they respectively had until April 21, 2021 to issue a Notice of Protest.

[27] On September 23, 2019, [Post Completion Day 77], Leveque submitted RFC #65 (Request for Clarification). Leveque claimed payment for: (a) an additional 22 Working Days; (b) costs of Traffic Control for the 22 Working Days; and (c) 35 days of Standby Time. The claim related to costs that Leveque had incurred nine months previously during the winter. MTO alleges that it was prejudiced by Leveque’s failure to submit RFC #65 “immediately” as required by GC 3.14.02.01, set out above, of the Construction Contract because: (a) MTO lost the opportunity to mitigate the more than $1.7 million claim by directing Leveque to shut down for the Winter; and (b) the Claims Review Process could have been commenced in January 2019, nine months earlier.

[28] On November 5, 2019, MTO issued its response to RFC #65.

[29] On November 13, 2019, Leveque issued the Notice of Claim #12 for a Field Level Review.

[30] On December 24, 2019, MTO’s Contract Administrator issued its Field Level Decision unfavourable to Leveque.

[31] On January 9, 2020, the MTO issued the Certificate of Completion specifying that the date of Contract Completion was July 9, 2019. With the issuance of the Certificate of Completion, the parties were now in a position to think about the consequences of the defining of the completion of the contract to the ongoing Review Process which had already completed a Field Level Review. At this time, had the parties thought about it, - and neither of them did think about it - they would have realized that January 9, 2020 was 185 days post the Completion Date and that they respectively had until April 21, 2021 (16.5 months) to issue a Notice of Protest to keep recourse to litigation available.

[32] On January 15, 2020, Leveque elevated Claim #12 to the Regional Level. MTO did not exercise its right to invoke the Referee Process.

[33] The MTO’s Regional Manager’s decision was due by April 9, 2020. On April 21, 2020, 12 days overdue, MTO’s Regional Office issued its Regional Level Decision. This decision was not within the 60 Business Days provided for in GC 3.14.09.02.

[34] On May 12, 2020, Leveque elevated Claim #12 to the Provincial Level. MTO did not exercise its right to invoke the Referee Process. Mr. English oversaw MTO’s third level of claim review.

[35] On August 6, 2020, the day that its response to the Provincial Level Claim was required, MTO requested additional information from Leveque regarding Claim #12. MTO asked, among other things, for calendar days of Standby Days and backup corroborating material.

[36] Pursuant to clause GC 3.14.11.02 of the Construction Contract, Leveque had 20 Business Days, until September 3, 2020, to respond to MTO’s request, and when Leveque failed to respond within that time frame, on September 14, 2020, MTO followed up on its request for additional information and MTO granted Leveque an extension to October 19, 2020 for the delivery of the additional information.

[37] On October 9, 2020 Leveque provided MTO with the additional information requested. With the receipt of this information, the Provincial Level Decision was due in 60 Business Days, i.e. December 8, 2020.

[38] On December 8, 2020, the Provincial Level Decision was not delivered. Had it been delivered, the parties would have had approximately 5.5 months to complete the Review Process, which typically takes 6.5 months. I infer that neither party appreciated that their respective ability to resort to litigation was now at extraordinarily high risk of being lost.

[39] On March 4, 2021, there was a without prejudice settlement discussion conference call.

[40] On March 15, 2021, MTO issued its overdue Provincial Level Decision.

[41] On April 1, 2021, Leveque rejected the Provincial Level Decision and referred Claim #12 to a three-member Referee panel in accordance with GC 3.14.13.02.02. Mr. English oversaw the preparation of MTO’s submission to the Referee.

[42] As of April 1, 2021, neither party appreciated that while they had time to complete the Referee Review Process, unless they both agreed to extend the time for recourse to litigation, there would not be time to complete the Referee Review Process, issue a Notice of Protest, and explore alternative dispute mechanisms and then resort to litigation. It appears that both parties were either prepared to accept or that they were compelled to have the Referee Process be a final and binding and not just a provisional decision.

[43] On June 7, 2021 the parties signed the Referee Services Agreement for Claim #12.

[44] Mr. English deposed that in signing the Referee Services Agreement on behalf of the MTO, the two-year limit for resort to litigation (i.e. July 9, 2021) did not cross his mind. Had it crossed his mind, he would have realized that the parties would need to agree to an extension of time for either of them to resort to litigation.

[45] The critical deadline date for resorting to litigation, July 9, 2021, passed without any attention been given to it by the parties.

[46] On August 11, 2021, the Referee Panel provided directions to the parties as to the procedures and timelines with respect to the Decision. The procedures were completed by October 5, 2021.

[47] On October 19, 2021 the Referee Panel issued its decision in respect of Claim #12. Leveque had claimed approximately $2.5 million, and it was awarded approximately $1.8 million.

[48] On October 21, 2021 MTO served a Notice of Protest.

[49] On November 4, 2021, MTO requested Leveque’s agreement to set aside the referee decision and explore alternative dispute resolution methods according to General Conditions of Contract GC 3.14 in an effort to settle the Claim.

[50] On December 1, 2021, Leveque advised MTO that it was outside of the contractual two-year limitation prescribed by GC 3.14.13.07.03 and GC 3.14.14.

[51] On November 14, 2022, MTO commenced its action against Leveque by Statement of Claim.

F. Is the Case Appropriate for a Summary Judgment?

[52] The first issue to determine is whether the case at bar is an appropriate one for a summary judgment.

[53] Rule 20.04(2)(a) of the Rules of Civil Procedure provides that the court shall grant summary judgment if: “the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.” With amendments to Rule 20 introduced in 2010, the powers of the court to grant summary judgment have been enhanced. Rule 20.04 (2.1) states:

20.04 (2.1) In determining under clause (2)(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence.
2. Evaluating the credibility of a deponent.
3. Drawing any reasonable inference from the evidence.

[54] Hryniak v. Mauldin, 2014 SCC 7 does not alter the principle that the court will assume that the parties have placed before it, in some form, all of the evidence that will be available for trial. The court is entitled to assume that the parties have advanced their best case and that the record contains all the evidence that the parties will present at trial. Canada (Attorney General) v. Lameman, 2008 SCC 14, [2008] 1 S.C.R. 372 at para. 11; Dawson v. Rexcraft Storage & Warehouse Inc., [1998] O.J. No. 3240 (C.A.); Bluestone v. Enroute Restaurants Inc. (1994), 18 O.R. (3d) 481 (C.A.). Thus, if the moving party meets the evidentiary burden of producing evidence on which the court could conclude that there is no genuine issue of material fact requiring a trial, the responding party must either refute or counter the moving party’s evidence or risk a summary judgment. Toronto-Dominion Bank v. 466888 Ontario Ltd., 2010 ONSC 3798.

[55] In Hryniak v. Mauldin, 2014 SCC 7 and Bruno Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8, the Supreme Court of Canada held that on a motion for summary judgment under Rule 20, the court should first determine if there is a genuine issue requiring trial based only on the evidence in the motion record, without using the fact-finding powers introduced when Rule 20 was amended in 2010. The analysis of whether there is a genuine issue requiring a trial should be done by reviewing the factual record and granting a summary judgment if there is sufficient evidence to fairly and justly adjudicate the dispute and a summary judgment would be a timely, affordable and proportionate procedure.

[56] If, however, there appears to be a genuine issue requiring a trial, then the court should determine if the need for a trial can be avoided by using the powers under rules 20.04 (2.1) and (2.2). As a matter of discretion, the motions judge may use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if their use will lead to a fair and just result and will serve the goals of timeliness, affordability, and proportionality in light of the litigation as a whole. To grant summary judgment, on a review of the record, the motions judge must be of the view that sufficient evidence has been presented on all relevant points to allow him or her to draw the inferences necessary to make dispositive findings and to fairly and justly adjudicate the issues in the case. Campana v. The City of Mississauga, 2016 ONSC 3421; Ghaeinizadeh (Litigation guardian of) v. Garfinkle Biderman LLP, 2014 ONSC 4994, leave to appeal to Div. Ct. refused, 2015 ONSC 1953 (Div. Ct.); Lavergne v. Dominion Citrus Ltd., 2014 ONSC 1836 at para. 38; George Weston Ltd. v. Domtar Inc., 2012 ONSC 5001.

[57] If a judge is going to decide a matter summarily, then he or she must have confidence that he or she can reach a fair and just determination without a trial; this will be the case when the summary judgment process: (a) allows the judge to make the necessary findings of fact; (b) allows the judge to apply the law to the facts; and (c) is a proportionate, more expeditious and less expensive means to achieve a just result. Hryniak v. Mauldin, 2014 SCC 7 at paras. 49 and 50. The motion judge is required to assess whether the attributes of the trial process are necessary to enable him or her to make a fair and just determination. Hryniak v. Mauldin, 2014 SCC 7 at paras. 51-55; Wise v. Abbott Laboratories, Ltd., 2016 ONSC 7275 at paras. 320-336; Drywall Acoustic Lathing and Insulation Local 675 Pension Fund (Trustees of) v. SNC-Lavalin Group Inc., 2016 ONSC 5784 at paras. 122-131.

[58] The analytic framework from Hryniak v. Mauldin, 2014 SCC 7 requires the motions judge, after determining whether the case is appropriate for a summary judgment, to first determine if there is a genuine issue requiring a trial based only on the evidence without using the enhanced fact-finding powers under rule 20.04 (2.1). Second, if there appears to be a genuine issue requiring a trial, the motion judge should determine whether a trial could be avoided by: (a) by using the enhanced powers under rule 20.04 (2.1), which permit weighing the evidence, evaluating the credibility of deponents, and drawing any reasonable inference from the evidence; or (b) by using the power under rule 20.04 (2.2) to order that oral evidence be presented by one or more parties. Royal Bank of Canada v. 1643937 Ontario Inc., 2021 ONCA 98; Hryniak v. Mauldin, 2014 SCC 7 at para. 66.

[59] In my opinion, the case at bar is an appropriate case for summary judgment. This was not disputed by the parties. Both Leveque and MTO submitted that the case was appropriate for a summary judgment.

G. Does the Limitation Period in the Construction Contract Apply to Bar MTO’s Claim as Untimely?

[60] With an exception for “business agreements,” contracting parties may not contract out of the limitation periods prescribed by the Limitations Act, 2002. Pursuant to s. 22 of the Act, which is set out below, a “business agreement” means an agreement made by parties none of whom is a consumer as defined in the Consumer Protection Act, 2002.

[61] In the immediate case, the parties agree that the Construction Contract qualifies as a business agreement. They differ, however, as to whether pursuant to s.22 (5) para. 1, the two-year limitation period under the Act was varied by the Construction Contract between MTO and Leveque.

[62] Section 22 of the Limitations Act, 2002 states:

Limitation periods apply despite agreements

22 (1) A limitation period under this Act applies despite any agreement to vary or exclude it, subject only to the exceptions in subsections (2) to (6)

Exception

(2) A limitation period under this Act may be varied or excluded by an agreement made before January 1, 2004.

Same

(3) A limitation period under this Act, other than one established by section 15, may be suspended or extended by an agreement made on or after October 19, 2006.

Same

(4) A limitation period established by section 15 may be suspended or extended by an agreement made on or after October 19, 2006, but only if the relevant claim has been discovered.

Same

(5) The following exceptions apply only in respect of business agreements:

1. A limitation period under this Act, other than one established by section 15, may be varied or excluded by an agreement made on or after October 19, 2006.
2. A limitation period established by section 15 may be varied by an agreement made on or after October 19, 2006, except that it may be suspended or extended only in accordance with subsection (4).

Definitions

(6) In this section,

“business agreement” means an agreement made by parties none of whom is a consumer as defined in the Consumer Protection Act, 2002;

“vary” includes extend, shorten and suspend.

[63] Leveque submits that MTO’s resort to court proceedings is untimely and barred because when understood in its contractual factual nexus, the ordinary and grammatical meaning of the second sentence in GC 3.14.13.07.03 is that there is a two-year time limit for reviewing a Referee’s Decision.

[64] The MTO, however, submits that grounded in the immediate text as well as its neighbouring provisions, it is clear that the time prescribed by the Construction Contract for reviewing a Referee’s Decision presumes a decision has been delivered within the two-year time period for such review. MTO submits that any other interpretation would be nonsensical.

[65] I agree with Leveque and disagree with MTO’s interpretation of the Construction Contract.

[66] In Boyce v. The Co-Operators General Insurance Company, 2013 ONCA 298 at para 20, the Court of Appeal stated that where a court is faced with a contractual term that purports to shorten a statutory limitation period, the court must consider whether the provision: (a) in clear language describes a limitation period; (b) identifies the scope of the application of that limitation period; and (c) excludes the operation of other limitation periods. In my opinion, that is what the language of the Construction Contract does in the immediate case.

[67] Clause GC 3.14.13.07.03 of the Construction Contract has the necessary characteristics to fall within the exception found in s. 22 (5) (a) of the Limitations Act, 2002. There is no need to make any presumptions about the proper interpretation of GC 3.14.13.07.03, and its application does not lead to any absurdities or nonsensical results in the immediate case.

[68] Unfortunately for the MTO (and it might have been unfortunate for Leveque had the Referee’s Decision been less favourable), as it happens on the facts of this case, the Referee Process was invoked at a time when there would not have been sufficient time to deliver a Notice of Protest and resort to litigation in a way that was timely and not barred by clause GC 3.14.13.07.03 of the Construction Contract.

[69] On the facts of this case, the bar to resort to litigation was not inevitable. Accepting that the Referee Process typically requires approximately 6.5 months from start to finish, the Review Process could have been completed with time to resort to litigation: (a) had the Review Process been commenced by Leveque on January 15, 2020, when MTO’s Contract Administer issued the Field Level Decision; or (b) had the Review Process been commenced by Leveque or by MTO on April 21, 2020, when MTO’s Regional Manager issued the Regional Level Decision.

[70] Further, in the immediate case, given that Leveque did not commence the Review Process until September 23, 2019 [Day 77] and neither party commenced the Referee Process until after the Provincial Level Decision, there would have been time for the Referee Process had the MTO’s representatives not lost: (a) 21 days from the late Regional Level Decision and (b) 97 days from the late Provincial Level Decision. Had those 118 days not been lost, the Referee Process would have started on December 4, 2020 to be completed on April 1, 2021, to be followed by 60 Business Days, reaching June 24, 2021, which is 16 days before the July 9, 2021 deadline.

[71] The point of these illustrations is that they demonstrate there is no need to make the presumptive reading proposed by the MTO and that there is nothing absurd about how the Construction Contract was to be performed. These illustrations also make the point that had the parties kept their eye on the 730-day clock stipulated by clause GC 3.14.13.07.03 of the Construction Contract, the contract would have functioned without any problem.

[72] In this last regard, it is worth mentioning that had the Referee Process yielded an outcome that was favourable to MTO, then it might be the MTO insisting that Leveque’s resort to a Notice of Protest and arbitration or a court proceeding was barred by the Construction Contract.

[73] Section 3.14.13.07.03 is a provision in a business agreement, and there is nothing unambiguous about its plain meaning. It plainly and clearly excludes and substitutes a limitation period for the limitation period prescribed by the Limitations Act, 2002. The plain meaning of s. GC 3.14.13.07.03 of the Construction Contract plainly works. That MTO finds itself offside from the plain meaning of its own Construction Contract has nothing to do with something nonsensical in the plain meaning.

[74] It follows that unless there is reason for not enforcing the contractual limitation period, which is the topic of the next two parts of this decision, that Leveque’s summary judgment motion should be granted.

H. Can Leveque Rely on the Limitation Period in the Construction Contract?

[75] The MTO relies on the well-established principle of contract law that if a party to a contract is the cause of the other party’s failure to perform on time, then he or she cannot rely on the other party’s failure to perform on time. Cantini Developments Ltd. v. Hi-Rise Group (Toronto) Inc., 2013 ONSC 186; Walker v. Jones [2008] O.J. No. 3687 at para 144; Eastwalsh Homes Ltd. v. Anatal Developments Ltd. (1990), 72 O.R. (2d) 661 (H.C.J.), varied on damages (1993), 12 O.R. (3d) 675 (C.A.); Dynamic Transport Ltd. v. O.K. Detailing Ltd. (1978), 85 D.L.R. (3d) 19 (S.C.C.); 100 Main Street Ltd. v. W.B. Sullivan Construction (1978), 20 O.R. (2d) 401 (C.A.); Gerald Fridman, The Law of Contract in Canada, 6th ed. (Toronto, Carswell, 2011), pg. 535, fn 72. There is no doubt about the vitality of this rule of contract performance; however, it is of no assistance to MTO in the immediate case.

[76] As the above analysis and illustrations reveal, Leveque was not the cause of the MTO’s failure to issue a Notice of Protest on time. MTO only has itself to blame, as Leveque would only have itself to blame if the Referee’s decision had gone against it.

[77] Therefore, Leveque is not precluded from enforcing the bargain that it signed. It is entitled to enforce the contractually stipulated limitation period.

I. Should the Court Grant MTO Relief from Forfeiture?

[78] MTO submits that it should be granted relief from forfeiture.

[79] Relief from forfeiture is an equitable and discretionary jurisdiction empowering the court to stop the forfeiture of property consequent upon a breach of contract, and in exercising its discretion the court will consider three factors; namely: (1) the conduct of the applicant; (2) the gravity of the breach, and (3) the disparity between the value of the property forfeited and the damage caused by the breach. Kozel v. Personal Insurance Co., 2014 ONCA 130; Ontario (Attorney General) v. 8477 Darlington Crescent, 2011 ONCA 363; Saskatchewan River Bungalows Ltd. v. Maritime Assurance Co., [1994] 2 S.C.R. 490; Shiloh Spinners Ltd. v. Harding, [1973] A.C. 691; Courts of Justice Act, R.S.O. 1990, c. C.43, s. 98.

[80] I see no reason to grant relief from forfeiture. In the immediate case, the Construction Contract, while not a contract of adhesion, was MTO’s standard form contract and its terms and conditions were heavily skewed in favour of the MTO. MTO was the decision maker in the three stages of the Review Process. During the Review Process, the MTO was the opponent but also the judge of Leveque’s claims in the Review Process. Had it been paying attention to the time periods stipulated in its own Construction Contract, the MTO could have preserved its right to resort to litigation. It was the MTO that insisted on the deadlines for the issuance of the Notice of Process etc. should either party wish to resort to litigation after a determination by an impartial adjudicator. Neither party breached the terms of the Review Process or the Referee Process. There is nothing unfair about Leveque enforcing the terms of the Construction Contract.

[81] Relief from Forfeiture is an equitable doctrine and equity follows the law. There is nothing inequitable to hold the MTO to the terms of the contract that it insisted should govern its relationship with Leveque.

J. Conclusion

[82] For the above reasons, Leveque’s summary judgment motion is granted.

[83] If the parties cannot agree about the matter of costs, they may make submissions in writing beginning with Leveque’s submissions within twenty days of the release of these reasons for decision followed by MTO’s submissions in a further twenty days.

Perell, J. Released: April 18, 2024

Schedule “A” – Excerpts from Construction Contract

SECTION GC 1.0 – INTERPRETATION

GC 1.07 Definitions

For the purpose of this Contract, the following definitions apply:

Additional Work means work not provided for in the Contract and not considered by the Contract Administrator to be essential to the satisfactory completion of the Contract within its intended scope.

Agreement means the signed document between the Minister or delegated representative and the Contractor for the performance of the Work included in the Contract Documents.

Business Day means any Day which is not:

(a) A Saturday or a Sunday or

(b) A Day observed as a holiday under the laws of the Province of Ontario or the federal laws of Canada applicable to the Province of Ontario.

Change in the Work means the deletion, extension, increase, decrease, or alteration of lines, grades, dimensions, quantities, methods, drawings, changes in the character of the work to be done, or Materials of the Work or part thereof, within the intended scope of the Contract.

Change Order means a written order to the Contractor covering contingencies, extra work, increase or decrease in Contract quantities, and additions or alterations to the plans or specifications, within the scope of the Contract and establishing the basis of payment. Also means, a written authorization covering Additional Work.

Change Proposal means a proposal by the Contractor for a modification to the Contract Documents that is expected to result in design improvement benefits or a reduction in costs or both, or Contract Time

Claim means any dispute for a modification in the payment from the original tender bid price arising from:

(a) Request for Clarification (RFC) submitted according to clause GC 3.14.02, Request for Clarification;

(b) Applications submitted according to subsection GC 3.06, Extension of Contract Time or Interim Completion Dates; (c) Change Order price negotiations undertaken according to subsection GC 3.10, Changes in the Work and Additional Work.

Contract Completion means the Work has passed all inspection and testing requirements, the Contractor has rectified all deficient Work, and the Contractor has fulfilled all obligations under the Contract, except warranty obligations.

Contract Completion Certificate means the certificate issued by the Contract Administrator at Contract Completion.

Contract Time means the time stipulated in the Contract Documents for completion of the Work, including any extension of Contract Time made pursuant to the Contract Documents.

Notice of Protest means a written notice delivered by either party to the other party within 30 Business Days of the date of the decision of the Referee that the party disagrees with the Referee’s decision and desires to have the decision reviewed according to paragraph GC 3.14.13.07.03 and no later than 2 years after the date of Contract Completion. [emphasis added]

Referee means an independent third party consisting of 1 or 3 members who shall have the duty, responsibility and authority to conduct an independent review of the facts associated with a Claim and to then issue a written provisionally binding decision based solely on the facts of the Claim and in strict adherence with the Contract Documents.

Referee Roster Administrator is an independent and neutral 3rd party responsible to maintain and administer a Referee roster and who has the responsibility of administering the selection of the Referee on a per Claim basis on the Contract according to clause GC 3.14.13.03, Referee Selection. The name of the Referee Roster Administrator shall be provided to the Contractor by the Owner after Contract award.

Working Day means any Day:

(a) Except Saturdays, Sundays and statutory holidays.

(b) Except a Day as determined on which the Contractor is prevented by weather or conditions resulting immediately thereafter, from proceeding with a Controlling Operation. For the purposes of this definition, this shall be a Day during which the Contractor cannot proceed with at least 60% of the normal labour and equipment force effectively engaged on the Controlling Operation for at least 5 hours.

c) Except a Day on which the Contractor is prevented from proceeding with the Controlling Operation by reason of:

i. Any breach of Contract or prevention by the Owner, by any other Contractor of the Owner, or by any employee of any one of them.

ii. Non-delivery of Owner supplied materials.

iii. Any cause beyond the reasonable control of the Contractor that can be substantiated by the Contractor.

GC 3.14 Clarification and Claims

GC 3.14.01 Claim Resolution Approach

.01 The parties agree to make reasonable good faith efforts to resolve any Claim arising out of the Contract by following the procedures set out in the Contract before resorting to the commencement of a legal proceeding. In this regard, the parties recognize the mutual desire of each of them to resolve the Claim in a timely manner and to exchange such appropriate information relied upon by them for the purpose of engaging in confidential settlement negotiations in order to facilitate resolution of the Claim.

.02 All Claims shall be addressed according to the Claim Review Process set out in clause GC 3.14.07. Each level of the process shall be completed before the next level or another form of resolution is initiated.

.04 If both parties mutually agree before the expiry of any time period specified for resolving a Claim, then the parties may extend such time to make a decision.

GC 3.14.02 Request for Clarification

.01 The Contractor shall immediately submit a RFC, in writing, on the Owner standard form PH-CC-750, Request for Clarification, when the Contractor becomes aware of or ought to be aware of any of the following:

(a) A situation that is different than represented in the Contract Documents.

(b) A Change Order where the Contractor disagrees with the basis of payment.

(c) A situation where the Contractor believes the Contract Documents to be ambiguous.

(d) Disagreement with Owner audit results. 2

The RFC shall include a clear description of the situation with specific references to the Contract Documents. Notwithstanding the Contractor’s RFC, the Contractor shall proceed with the work as directed by the Contract Administrator.

.02 Prior to the expiry of 30 Business Days from the date of receipt of the RFC, the Contract Administrator shall provide a written response to the Contractor explaining the rationale and basis of the Contract Administrator’s position to the RFC which shall be deemed to be the initial site response.

GC 3.14.05 Notice of Claim

.01 In the event that a matter remains unresolved and the Contractor wishes to pursue a Claim through the Claim Review Process, within 15 Business Days of receipt of the Contract Administrator’s initial site response regarding an RFC, an Extension of Time Request, or a Change Order price negotiation, the Contractor shall provide a written notice of its intent to submit a Claim to the Contract Administrator, which notice shall be referred to as the “Initial Notice”. The “Initial Notice” shall reference the original RFC number, the original Change Order number, or the original Extension of Time Request number and contain a brief description of the circumstances of the reasons for the Claim.

.02 The Contractor shall then within 15 Business Days from the date of the “Initial Notice” provide a detailed written paper Claim submission package to the Contract Administrator and that Claim submission package shall be referred to as the Notice of Claim. The Contractor shall ensure that the Notice of Claim contains, as a minimum, sufficient information under the headings described below to permit a detailed review by the Contract Administrator: […]

.03 The Contractor shall not be permitted to change the Notice of Claim after it has been submitted to the Contract Administrator. Subsequent to the Contractor filing the Notice of Claim, the Contractor shall be permitted to submit to the Contract Administrator the following: […]

.05 The Contractor is solely responsible for ensuring that it has provided all the information required in the RFC, according to clause GC 3.14.02, Request for Clarification, and the Notice of Claim, according to clause GC 3.14.05, Notice of Claim.

.06 The Contractor's failure to provide any notices as required shall result in the waiver of any Claim and the loss of compensation to the Contractor in respect of such Claim. However, if the Contractor provides the Owner with an explanation for the delay in providing these notices, which the Owner, in its sole discretion, can accept or reject for any reason, then, if the explanation is accepted, the Owner shall review the Claim according to the procedures set out herein. This provision shall not be interpreted so as to compel the Owner to review every Claim of the Contractor or any other person that does not comply with the requirements of the Contract, but rather is intended to allow the Owner the ability to consider those Claims that have failed to comply with the procedures and where the Owner, at its sole discretion, desires to consider such a Claim.

GC 3.14.07 Claim Review Process

.01 Unless the Claim is resolved, the Claim review shall proceed through the Claim Review Process as follows:

(a) Field Level; between the Contractor and the Contract Administrator;

(b) Regional Level; between the Contractor and the Regional Manager, Operations Office where the Contract work is being performed;

(c) Provincial Level; between the Contractor and the Manager, Claims Office within the Contract Management and Operation Branch.

GC 3.14.08 Claim Review Process – Field Level

.01 Where the Contractor desires to pursue the Claim to the Field Level, upon receipt of the Notice of Claim from the Contractor, the Contract Administrator shall make reasonable efforts to try to negotiate resolution of the Claim at the earliest opportunity.

.02 Prior to the expiry of 30 Business Days from the receipt of the Contractor’s Notice of Claim the Contract Administrator shall provide the Contractor with a written Field Level decision on the Claim. If the Claim is denied in whole or in part at the Field Level, the Contract Administrator shall provide the Contractor with a written explanation of the rationale and basis of the Field Level decision.

.03 The Contractor shall then be permitted up to 15 Business Days from the receipt of the Contract Administrator’s response to accept or reject the Field Level decision regarding the Contractor’s Notice of Claim.

.04 If the Contractor rejects the decision of the Contract Administrator, then the Contractor can elect to have the Claim submitted to the Regional Level or request that the Claim proceed to the Referee Process.

.05 If the Contractor elects to elevate their Claim to the Regional Level then within 15 Business Days of receipt of the written Field Level decision on the Claim, the Contractor shall submit to the Regional Manager, Operations Office the originally submitted Notice of Claim according to paragraph GC 3.14.05.02 and additional information that was submitted according to paragraphs GC 3.14.05.03 and GC 3.14.05.04 and all upon which the Field Level decision was made.

GC 3.14.09 Claims Review Process – Regional Level

.01 The Regional Manager, Operations Office shall have 15 Business Days from the receipt of the Contractor’s Notice of Claim to either begin the review of the Claim or refer the Claim to the Referee Process.

.02 If the Regional Manager, Operations Office elects to review the Claim then prior to the expiry of 60 Business Days from the receipt of the Contractor’s Notice of Claim at the Regional Level, the Regional Manager shall provide the Contractor with a written decision, either;

(a) Accepting the position of the Contractor on the Claim;

(b) Making an offer to settle the Claim; or,

(c) Rejecting the position of the Contractor according to the Claim. If applicable, provide additional reasons for rejecting the Claim if not previously provided to the Contractor.

.03 The Contractor shall be permitted up to 15 Business Days from the receipt of the Regional Level written decision to accept or reject the Region’s decision on the Contractor’s Claim.

.04 If the Contractor rejects the decision of the Regional Level, then the Contractor may elect to have the Claim elevated to the Provincial Level or submitted to the Referee Process.

.05 If the Contractor elects to have the Claim elevated to the Provincial Level then within 15 Business Days of receipt of the Regional Manager, Operations Office written decision on the Claim, the Contractor shall submit to the Manager, Claims Office the originally submitted Notice of Claim according to paragraph GC 3.14.05.02; and additional information that was submitted to the Regional Level as set out in paragraphs GC 3.14.05.03 and GC 3.14.05.04.

.07 If the Contractor elects to have the Claim submitted to the Referee Process, then the Contractor shall instruct the Regional Manager, Operations Office accordingly in writing within 15 Business Days of the receipt date of the written decision from the Regional Level.

GC 3.14.10 Claims Review Process – Provincial Level

.01 The Manager, Claims Office shall have 15 Business Days from the receipt of the Contractor’s Notice of Claim to either begin the review of Notice of Claim or to request the Referee Process.

.02 If the Manager, Claims Office elects to review the Claim then prior to the expiry of 60 Business Days from the receipt of the Contractor’s Notice of Claim at the Provincial Level, the Manager, Claims Office shall provide the Contractor with a written decision, either;

(a) Accepting the position of the Contractor on the Claim;

(b) Making an offer to settle the Claim; or,

(c) Rejecting the position of the Contractor as set out in the Claim. If applicable, provide additional reasons for rejecting the Claim if not previously provided to the Contractor.

.03 The Contractor shall be permitted up to 15 Business Days from the receipt of the Provincial Level written decision to accept or reject the Provincial Level decision regarding the Contractor’s Claim.

.04 If the Contractor rejects the decision of the Provincial Level, then the Contractor can request the Referee Process. Notification of the desire to request the Referee Process must be received by the Manager, Claims Office in writing within 15 Business Days of the receipt by the Contractor of the Provincial Level written decision.

.05 If the Contractor elects to have the Claim submitted to the Referee Process, then the Contractor shall submit to the Referee Roster Administrator the originally submitted Notice of Claim according to paragraph GC 3.14.05.02; and, additional information that was submitted according to paragraphs GC 3.14.05.03 and GC 3.14.05.04, and all upon which the Provincial Level decision was made. The Referee submission may include additional supporting information according to the Owner standard form PH-CC-751, Referee Services Agreement, or Owner standard form PH-CC-752, Referee Services Panel Agreement. The ministry may provide a written submission to the Referee in response to the Contractor’s submission.

.07 If the Manager, Claims Office elects to have the Claim submitted to the Referee Process, then the Manager, Claims Office shall instruct the Contractor accordingly in writing within 15 Business Days of the receipt date of the Contractor’s Claim at the Provincial Level.

GC 3.14.11 Owner Rights

.01 The Contractor’s failure to provide the written notification for the next Level of the Claim Review Process, according to clause GC 3.14.07, Claim Review Process, and clauses GC 3.14.08, Claim Review Process – Regional Level, GC 3.14.09, Claim Review Process – Regional Level, 3.14.10, Claim Review Process – Provincial Level, and GC 3.14.13, Referee Process, shall preclude the Contractor from later seeking such further review of the Claim and shall constitute an abandonment of the Claim and the loss of any compensation to the Contractor not previously agreed upon by the Owner in respect of such Claim. However, if the Contractor provides the Owner with an explanation for the failure to provide the written notification for the next level of Claim review including the Referee Process, which the Owner, in its sole discretion, can accept or reject for any reason, then, if the explanation is accepted, the Owner shall review the Claim or agree to proceed to the Referee Process according to the procedures set out herein. This provision shall not be interpreted so as to compel the Owner to review every Claim of the Contractor or any other person that does not comply with the requirements of the Contract including the Referee Process, but rather is intended to allow the Owner the ability to consider those Claims that have failed to comply with the procedures and where the Owner, at its sole discretion, desires to consider such a Claim either internally or through the Referee Process.

.02 If the Owner requests additional information from the Contractor to justify the Claim, then the calculation of time set out in paragraphs GC 3.14.08.02, GC 3.14.09.02 and GC 3.14.10.02, to render a decision shall cease from the date of the request, until the Contractor has provided the information or a statement that it does not intend to provide the information. This waiting period is limited to 20 Business Days. If no further information is received within that time frame, the Owner shall issue the written decision regarding the Notice of Claim based on the information provided with the Contractor accepting the risk of the Owner making an adverse decision by reason of the lack of the requested information.

.03 If the Owner fails to resolve or make a decision on the Claim within the times detailed within paragraphs GC 3.14.08.02, GC 3.14.09.02 and GC 3.14.10.02, then the Contractor, if the Contractor so chooses, may elevate the Claim to the next Level of the Claim Review Process or request the use of the Referee Process. In all such situations, the Contractor shall provide the RFC, according to clause GC 3.14.02, Request for Clarification, and the Notice of Claim, according to clause GC 3.14.05, Notice of Claim, or required notification of the desire to proceed to the next Level according to clause GC 3.14.07, Claim Review Process, or to proceed to the Referee Process, depending on status of the Claim review.

.04 Justification of the Claim and completing the Notice of Claim to the satisfaction of the Owner is the full responsibility of the Contractor, failing which, the Owner shall rely upon the information provided by the Contractor to review the Claim at the risk of the Owner making an adverse decision by reason of the lack of supporting information.

GC 3.14.12 Contractor Rights

.01 Where a decision is not received from the Field, Regional or Provincial Office Levels of the Claim Review Process within the specified time period as may be extended by mutual agreement, the Claim shall be assumed to be denied, whereupon the Contractor may request to have their Claim submitted to the next Level of the Claim Review Process or to request the Referee Process.

GC 3.14.13 Referee Process

GC 3.14.13.01 Commencement

.01 The Referee Process can be initiated by the Contractor after the conclusion of any level of the Claims Review Process, according to clauses GC 3.14.08, Claim Review Process – Field Level, GC 3.14.09, Claim Review Process – Regional Level, or GC 3.14.10, Claim Review Process –Provincial Level.

.02 The Referee Process can be initiated by the Owner once the Notice of Claim is received at Regional or Provincial Levels of the Claim Review Process from the Contractor according to paragraphs GC 3.14.09.07 or GC 3.14.10.07.

.03 If at any level in the Claim Review Process, the Contractor or the Owner initiates the Referee Process; then they shall have departed from the Claim Review Process and shall not be permitted to return to it, because the Claim Review Process shall be deemed to have been concluded. For greater clarity, the Claim Review Process shall not be used after the Notice of Claim has been submitted to the Referee Roster Administrator.

GC 3.14.13.02 Number of Referees

.01 For amounts of less than $750,000, the Claim shall be decided by one Referee.

.02 For amounts equal to or greater than $750,000, the Claim shall be decided by a three member Referee panel.

.03 If the parties mutually agree, a Notice of Claim equal to or greater than $750,000 may be decided by a single Referee.

GC 3.14.13.04 Referee Services Agreement

.01 If the Claim is to be decided by a one-person referee, both parties shall agree to the terms and conditions of the Owner standard form PH-CC-751, Referee Services Agreement, subject to any mutually agreed upon amendments thereto. The Contract Administrator shall fill out the Referee Services Agreement and provide it to the Contractor for signing.

.02 If the Claim is to be decided by a three-person referee panel, both parties shall agree to the terms and conditions of the Owner standard form PH-CC-752, Referee Services Panel Agreement, subject to any mutually agreed upon amendments thereto with the selected Referee, which establishes the scope of authority of the Referee panel to conduct an independent neutral review of the Claim and which defines how the Referee Process shall operate. The Contract Administrator shall fill out the Referee Services Panel Agreement and provide it to the Contractor for signing.

GC 3.14.13.07 Referee Decision

.01 The Referee’s decision shall be provisionally binding on both parties subject to the right of either party to protest the decision as set out herein and the Owner standard form PH-CC-751, Referee Services Agreement, or Owner standard form PH-CC-752, Referee Services Panel Agreement, and any mutually agreed upon amendments thereto.

.02 Both parties shall agree to abide by the Referee decision according to the procedures set out in the Owner standard form PH-CC-751, Referee Services Agreement, or Owner standard form PH-CC-752, Referee Services Panel Agreement, and any mutually agreed upon amendments thereto and to comply with the decision of the Referee without delay from the date of the Referee decision. It is understood and agreed that such compliance is without prejudice to a party to protest the decision as described herein or in the Referee Services Agreement.

.03 Referee decisions may be reviewed by either party by filing a Notice of Protest within 30 Business Days of the date of the Referee decision. Such reviews shall be dealt with according to clause GC 3.14.14, Further Avenues of Dispute Resolution, which shall not commence until the date of Contract Completion and no later than 2 years after the date of Contract Completion. [emphasis added]

.04 Decisions of the Referee shall be final and binding on both parties in the absence of the issuance of a Notice of Protest by either party within 30 Business Days following the date of the Referee decision. Notwithstanding submission of a Notice of Protest, both parties shall abide by the decision of the Referee ruling and carry out the decision without delay.

GC 3.14.14 Further Avenues of Dispute Resolution

.01 If the parties fail in their efforts to resolve the Claim, and neither party elected to refer the Claim to the Referee Process prior to or after completion of the Provincial Level, then Referee Process shall be used by the parties prior to resorting to further alternative dispute resolution methods. In this case the Contractor shall provide written notice to the Manager, Claims Office, Provincial Highways Management, of the Contractor’s request to use the Referee Process within 15 Business Days of the decision of the Owner’s Provincial Level of claim review.

.02 If the parties fail in their efforts to resolve the Claim then the parties agree that prior to resorting to litigation they may explore further alternative dispute resolution methods that are acceptable to the Owner. The Contractor shall provide written notice to the Manager, Claims Office, Provincial Highways Management, of the desire to explore further alternative dispute resolution methods within 30 Business Days of the Contract Completion date if the Referee decision was protested according to paragraph GC 3.14.13.07.03. The parties agree to explore all avenues of alternative dispute resolution and shall attempt to negotiate the method and the terms for the alternative dispute resolution in an effort to settle the Claim before resorting to litigation. If the parties are unable to agree upon an alternative dispute resolution method and its terms within 60 Business Days of the request to explore alternative dispute resolution, then either party may resort to litigation. [emphasis added]