Why Courts Show Deference to Consultants’ Decisions

by Robertson Stromberg | Mar 4, 2019 | Articles & Research, Construction, Misty S Alexandre

by Misty Alexandre

Robertson Stromberg LLP

Like the onus carried by the proverbial middle child, the Consultant is bound to wear the unbiased hat of fairness as they administer the typical construction contract. Perhaps this is why the Courts have consistently paid such deference to the role when disputes reach the courts. A recent Alberta Court of Queen’s Bench decision has confirmed that tradition and provided a few clues as to why the courts typically take a back seat to the findings of a Consultant under a contract.

In ASC (AB) Facility Inc v. Man-Shield (Alta) Construction (2018 ABQB 130), the primary issue considered by the Court was whether the Court should make its own findings or defer to the findings already made by the Consultant.

Man-Shield was contracted to construct a retirement residence in Calgary for the Owner, ASC (AB) Facility Inc. Page+steele/IBI Group Architects acted as the Consultant under the terms of the CCDC2 Contract. The dispute centred around 2 invoices – the former submitted prior to ManShield’s termination from the project, and the latter submitted quite some time thereafter. Relying upon the Consultant’s review and determinations on the invoiced work, the Owner withheld payment on the basis that some of the invoiced work was either deficient or incomplete.

Man-Shield argued that deference to the Consultant’s findings was only applicable during the life of the contract, and that no deference is owed following termination.

Justice Antonio, following various past precedents, concluded that deference to the Consultant continues after termination of the contract for a number of reasons, notably:

• The Consultant has the best opportunity and expertise to determine the matters at stake, and the benefit of the best evidence;

• The terms of a CCDC2 contract clearly show an intention by the parties “that the Consultant’s decisions will be binding at least absent demonstrable and significant error, legal or factual”;

• The parties, in the context of a stipulated price contract, have “subjected themselves to the expertise of a payment certifier and not to a “nuts and bolts” accounting before court”; and

• Prudent policy considerations require deference to the Consultant’s findings, as “to defy or ignore certifications would “encourage litigation of a very harassing kind, and probably to a great extent””.

While the Court will generally defer to the Consultant on decisions of fact or contractual interpretations, the situation is slightly different for a Consultant’s determination of law, as presumably the Court would be in a position of greater expertise.

The Court confirmed that the Consultant was not held to a standard of perfection. Rather, the Consultant’s decisions are persuasive in the absence of contrary evidence or demonstrable and significant error.

Despite Man-Shield’s arguments on various aspects of the Consultant’s findings, it was ultimately unable to satisfy the onus of proving a “demonstrable or significant error” in those findings. As a secondary argument, Man-Shield attempted to discredit the Consultant by providing evidence that his numbers changed over time. The Consultant explained that such changes resulted from correction of superficial errors, or refinement of estimates, each time resulting in Man-Shield’s favour. Man-Shield’s efforts backfired on this aspect, as the Court reasoned that the Consultant’s openness to reviewing his numbers based on new information “supports an inference that he took his role seriously and performed it with objectivity.”

A Consultant’s decision is subject to challenge under the dispute provisions of a CCDC2 Contract. However, disputing parties should be aware of the general deference paid by the courts to a Consultant’s findings. On matters of fact or contractual interpretation, the burden of overturning a Consultant’s findings is a heavy one.