PEI Court Reiterates Limitation Period Rules and Delineates Third-Party Costs

ALC v. Bergmark Guimond et al., 2023 PESC 48

Reading time: 4 minutes (approx.)

By: Alexandre Doucet (Articled Clerk)

In this motion for summary judgement the defendants, F&S Holdings Inc. (“F&S”) and Bergmark Guimond Hamarlund Jones Inc. (“Bergmark”), sought dismissal of a claim filed by the plaintiff, Atlantic Lottery Corporation inc. (“ALC”). The third parties, which included J.M. Giffin Engineering Inc. (“JM”), were added to proceedings by F&S for contribution and indemnity reasons.

ALC’s claim stemmed from damages associated with the 2015 reconstruction of a grandstand at Red Shores Racetrack and Casino. The original grandstand from 2005 was designed by Bergmark with construction managed by F&S. Water damage led the grandstands’ closure and reconstruction.

In its summary judgement motion, F&S submitted there were no genuine issues requiring a trial for two reasons: firstly, the waiver agreed upon by the parties in the Construction Management contract barred ALC from commencing a claim related to breach of contract and negligence; secondly, the six-year limitation period for ALC to commence action had passed, as ALC knew, or ought to have known, the material facts upon which a claim as early as 2005. In contrast, ALC claimed it was not aware of the nature and extent of the damage to the grandstand until much later than alleged by F&S.

Justice Coady began by interpreting the contract between ALS and F&S and found that there was no evidence to support circumstances of unequal bargaining power or misconduct. Furthermore, Justice Coady found the waiver in the contract, which F&S claimed precluded ALC from initiating the subject action, to be appropriate, citing BG Checo International Ltd. v. British Columbia Hydro & Power Authority, [1993] 1 S.C.R. 12 [para 15-16]. This Supreme Court of Canada case that found that parties are free to arrange their affairs and assume risks differently than the common law, an extension of Freedom of Contract principles.

Given the above, the claim by ALC against F&S for breach of contract was unsuccessful, and the motion was granted in favour of the defendants. F&S’s third-party claims were also dismissed accordingly. While the general rule is that a defendant who has initiated an unsuccessful claim against a third party is responsible for the costs of the third party, there are exceptions, such as where the third party claim inevitably flows from the action commenced by a plaintiff. In this case, the third parties, who supported the motion for summary judgment, took the position that it would be appropriate for the plaintiff to bear the third parties’ costs, which Justice Coady confirmed.

Link: https://www.canlii.org/en/pe/pesctd/doc/2023/2023pesc48/2023pesc48.html?autocompleteStr=Bergmark&autocompletePos=1

Related Posts