Thomas G. Heintzman, O.C., Q.C.

McCarthy Tétrault
Toronto, Ontario
www.mccarthy.ca
theintzm@mccarthy.ca
www.constructionlawcanada.com

Thomas Heintzman specializes in commercial litigation and is counsel at McCarthy Tétrault in

Toronto. His practice focuses on litigation, arbitration and mediation relating to corporate
disputes, shareholder’s rights, securities law, broadcasting/telecommunications and class actions.

He has been counsel in many important actions, arbitrations, and appeals before all levels of
courts in many Canadian provinces as well as the Supreme Court of Canada.

Thomas Heintzman is the author of Goldsmith & Heintzman on Building Contracts, 4th Edition
which provides an analysis of the law of contracts as it applies to building contracts in Canada.

Goldsmith & Heintzman on Building Contracts has been cited in 182 judicial decisions including
two Supreme Court of Canada decisions:
M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd., 1999 Carswell Alta 302 and
Double N Earthmovers Ltd. v. Edmonton (City), 2007 Carswell Alta 36

Consultants: Beware of Overstepping Your Authority

Courts do not often examine the authority of a Consultant on a construction project and the
liability consequences if the Consultant oversteps its authority. That issue was recently dealt
with by the Queen’s Bench of Alberta in Online Constructors Ltd. v. Speers Construction Inc.

A golf club hired a contractor, Speers, to repair a dam on its property. Part of the project
involved the construction of a concrete spillway. The golf club hired a Consultant to monitor the
project. The contractor hired a subcontractor, Online, to construct the spillway. There were
deficiencies in the concrete work in the spillway. The issue was whether those deficiencies were
caused by the directions of the Consultant and were therefore the responsibility of the owner, or
were caused by the work of the subcontractor Online.
In finding that the Consultant had overstepped its role, the trial judge made a number of
interesting findings. She held that “the engineer cannot compel the contractor to carry out his
work in a particular manner or sequence unless that specific right is contained in the contract. If
the engineer acts improperly, the dissatisfied party is entitled to disregard the decision as not
binding upon him”.

If, however, the subcontractor follows the engineer’s improper instructions, “such interference
will amount to a breach of contract for which the owner is liable to the extent that the engineer is
acting as an agent of the owner”. The trial judge recognized that it was “hardly an option” for
the contractor to “thrown down its tools and cease to work until the dispute is worked out”.

The subcontractor had experienced workmen who wished to proceed in one fashion to pour the
cement, while the Consultant’s representative was relatively inexperienced and directed that
another method be used. The trial judge held that the Consultant had over-stepped its
responsibilities. To the extent that the concrete deficiencies were caused by the Consultant’s
directions to pour in a certain way, the damages were attributable to the Consultant. Since the
Consultant was the owner’s agent, those damages were the responsibility of the owner.

As important as this finding was, equally important in the result was the trial judge’s finding that
no damages could be attributed to the Consultant’s error. This finding underlines the difficulty in
proving damages arising from one of many activities in a construction project. Detailed project
analyses and forensic damage evidence will likely be necessary to prove that one activity – such
as a Consultant’s wrongful direction – caused damage to the claimant.

This decision is also a goldmine of legal analysis on many other issues relevant to construction
law: the potential liability of an owner to a subcontractor for Negligent Misrepresentations
contained in Tender’s; the Incorporation by Reference of the main contract in a subcontract;
the circumstances which will give rise to the Repudiation of a construction project; and the
obligation of a contractor to make Access to the Site available to a subcontractor.

Construction Law – Consultants: Online Constructors Ltd. v. Speers Construction Inc 2011
ABQB 43 (CanLII).