Supreme court | Construction Law | Bonds and sureties | Bonds
Defendant company was general contractor on energy project. Defendant entered into subcontract with L Ltd., which required L Ltd. to obtain labour and material payment bond. L Ltd. obtained bond describing L Ltd. as principal, bond issuer as surety, and defendant B as obligee. Plaintiff company V entered into subcontract with L Ltd. but was not fully paid for its services. V claimed on subject bond, but bond issuer denied claim on basis that plaintiff had not provided timely notice as required under subject bond. V took position that B, as trustee under subject bond, had obligation to inform V of subject bond’s existence. Defendant’s application for summary dismissal was granted and plaintiff’s action was dismissed. Appeal was allowed as to indemnity costs. Appeal to Supreme Court of Canada allowed. B committed breach of trust by failing to inform V of bond, or take steps to ensure it would come to V’s attention. Where evidence was that labour and material payment bonds were uncommon, something more than filing bond off-site was required from B to discharge its duty. As no evidence what sum of money was available on bond at any time during V’s 120-day notice period following last day on project matter remitted to trial judge.
Valard Construction Ltd. v. Bird Construction Co. (2018), 2018 CarswellAlta 261, 2018 CarswellAlta 262, 2018 SCC 8, 2018 CSC 8, McLachlin C.J.C., Abella J., Moldaver J., Karakatsanis J., Côté J., Brown J., and Rowe J. (S.C.C.); reversed (2016), 2016 CarswellAlta 1584, 2016 ABCA 249, Patricia Rowbotham J.A., Thomas W. Wakeling J.A., and Frederica Schutz J.A. (Alta. C.A.).
