Time Limits are Important in Construction Law

This post was written prior to our January 2017 merger, under our previous firm name, Aikins, MacAulay & Thorvaldson LLP.

In the course of construction projects, there are many important time limits to remember. These time limits can be found in several places including the contract, applicable legislation or regulations, insurance policies, and bonds.

By their nature, time limits must be strictly complied with. Missing them by even one day will result in a loss of rights. Depending on the situation, there may be steps that can be taken to seek relief from the strict requirements of the time limit. However, this type of relief must be sought quickly and should be treated as a last resort because it can be difficult and expensive to obtain. It is often not a practical or effective substitute to simply complying in the first place.

Not only must you be mindful of the expiry of a time limit, but also when the “clock” started. This will depend on the facts of the particular situation and be considered in conjunction with the terms of the contract, applicable legislation, policy or bond.

The following is a short list of commonly encountered time limits in construction projects. As mentioned above, the specific facts of your case will determine when the time limit started and when it is set to expire:

1. Forty days to file a lien:

In accordance with the Builders’ Liens Act (“BLA”), whether a lien relates to work, materials, or services, there is a 40 day time period within which a lien must be either registered in the appropriate land titles office, or served upon the appropriate office or department. The specific provisions of the BLA must be considered in each situation to determine when the 40 days starts and when it will expire.

2. Two years to commence a claim to prove a lien:

Liens under the BLA expire two years after registration of the lien unless during that time an action has been commenced in court and, where appropriate, a pending litigation order has been filed.

3. Thirty days to respond to a Notice under the BLA:

After being served with a Notice to Lienholder (also known as a “30 day notice”), a lien claimant has (not surprisingly) 30 days to commence a claim in court and, where appropriate, file a pending litigation order in a land titles office. If a claim is not commenced in accordance with the BLA within this time, the lien expires and may, upon application, and in appropriate situations, be removed from title by the land titles office.

4. Two years to file a claim for damages to personal property or for personal injury:

A claim in court for damages to personal property or for personal injury must be filed in court within two years from the date the cause of action arose. This is in accordance with the Limitation of Actions Act (“LAA”).

5. Six years to file a claim for recovery of money:

Also according to the LAA, a claim in court for recovery of money, whether recoverable as a debt or damages or otherwise, and whether in accordance with a contract or as a result of negligence, must be filed with the court within six years from the date the cause of action arose. Note that the six years prescribed by the LAA in Manitoba is different than many other Canadian jurisdictions that have two-year time limits.

6. Twelve months after knowledge of “material facts” to seek leave to commence an action after expiry of a limitation period:

In accordance with the LAA, after a legislative limitation period has expired (see 5 and 6 above), an application for leave from the court to commence an action must be filed no more than 12 months after the date upon which the party first knew or ought to have known of the “material facts” upon which the action is based. The party making the application must also provide evidence to the court that it has a “reasonable chance of success.” As an example, in a 2015 decision of the Manitoba Court of Queen’s Bench, the City of Winnipeg filed an application against a number of parties relating to the construction of upgrades to the West End Water Pollution Control Centre. After the hearing, the court found that the city was unable to prove that it had a “reasonable chance of success” of proving negligence or breach of contract relating to the supply, installation and work performed on sludge fermenters in 2007 and 2008. The court therefore dismissed the city’s application to commence a claim against the responding parties after the expiry of the limitation period.

7. Twenty days to file a statement of defence:

If you are served in Manitoba with a statement of claim issued from the Manitoba Court of Queen’s Bench, you have 20 days to file a statement of defence with the court failing which you may be noted in default, and default judgment can thereafter be issued by the court at the request of the plaintiff. This is a time limit that is occasionally extended by agreement between lawyers representing the parties to the claim.

8. Ten Working Days to give notice to Consultant of delay:

In addition to legislative time limits, there are time limits embedded in most construction contracts. For example, pursuant to the commonly used CCDC 2 – 2008 Stipulated Price Contract (and the italicized defined terms in the contract), no extension shall be made for delay (to the Contract Time) unless Notice in Writing of the cause of delay is given to the Consultantno later than 10 Working Days after the commencement of the delay. The issue of whether notice has been given is commonly encountered when disputes arise.

9. Fifteen working days to respond to a finding of the Consultant:

Again, in a CCDC 2 – 2008, be mindful that a party shall be conclusively deemed to have accepted a finding of the Consultant and to have expressly waived and released the other party from any claims in respect of that particular matter dealt with in the finding, unless, within 15 Working Days after receipt of that finding, the party sends a Notice in Writing of dispute to the other party and to the Consultant, which contains the particulars of the matters in dispute and the relevant provisions of the Contract Documents.

These are a few examples of the many time limits that might apply to a construction matter. Remember that the facts of your case and the application of the provisions specifying the time limit, will be integral in determining what rights you may have and what steps should be taken. It is advisable to seek advice at an early stage, and always be alert to timing!

This article was originally published in Upword, Issue 1, Spring Edition 2016.

John Martens is a partner in the construction law practice at Aikins Law. Reach him at jmartens@mltaikins.com.

Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that this article is not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.