Internal email not notice to party who never received it: Ontario court

An internal email that the appellants never sent or directed to the respondents should not constitute notice that would trigger a provision of the project agreement, the Ontario Court Appeal has ruled.

In Crosslinx Transit Solutions General Partnership v. Ontario (Economic Development, Employment and Infrastructure), 2022 ONCA 187, the respondents filed an application claiming that the appellants breached the complex project agreement between them in the context of the COVID-19 pandemic’s impacts.

The appellants were representatives of Crown agencies who commissioned a project for the design, construction and maintenance of the Eglinton Crosstown Light Rapid Transit line in Toronto. The respondents were a consortium of the four construction companies that were building the project.

The application judge made the following findings:

• The pandemic was an emergency under the project agreement;
• The appellants notified the respondents, via an internal email dated Mar. 25, 2020, that they required compliance with additional and overriding COVID-19 health and safety procedures; and
• Section 62.1(c) of the project agreement was triggered such that the parties had to conduct a variation enquiry, a procedure that could extend the time for the respondents to substantially complete the project.

On appeal, the appellants argued that the application judge erroneously concluded that s. 62.1(c) was triggered. The Court of Appeal allowed the appeal, set aside the judgment and remitted the application to the Superior Court for a rehearing.

The application judge made a palpable and overriding error when he found that the appellants notified the respondents through the Mar. 25, 2020, email, the appellate court held. The error was palpable because the appellants never sent that internal email to the respondents. It was overriding because the judge’s finding regarding notice was central to his determination that s. 62.1(c) was triggered.

The appellate court rejected the respondents’ argument that a letter dated Apr. 21, 2020, which the appellants sent to the respondents, could substitute the Mar. 25, 2020 email to support the application judge’s finding respecting notice.

According to the appellate court, the Apr. 21 letter was, at best, ambiguous. The respondents, in their other correspondence with the appellants, never said that any of the appellants’ letters constituted actual notice under s. 62.1(c), the appellate court added.

Moreover, the respondents did not frame their application or arguments on the basis that any of the appellants’ communications amounted to actual notice. The appellate court noted that the parties made no submissions about what constituted notice under s. 62.1(c) or about whether the appellants’ communications complied with the notice requirements under s. 61.1(a) of the project agreement.