Corpex (1977) Inc. v. The Queen in right of Canada

Corpex (1977) Inc. v. The Queen in right of Canada

Clause 12 creates a contractual compensation mechanism for unforeseen soil conditions and requires the contractor to give timely written notice to preserve claims; failure to give notice bars the soil-mistake claim and precludes annulment. Costs caused by delays from work ordered under clause 38 are recoverable under clauses 38 and 46 (actual cost plus 10%), so the contractor is entitled to the quantified delay-related sums; appeal allowed in part awarding those amounts.

Citation
[1982] 2 SCR 643
Parties
Appellant/contractor: Corpex (1977) Inc.; Respondent/owner: Her Majesty The Queen in right of Canada
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
23 November 1982
Procedural Posture
Contract Appeal / On Appeal to the Supreme Court of Canada From the Federal Court of Appeal; Final Judgment
Outcome
Appeal allowed in part; Federal Court of Appeal judgment reversed in part and Trial Division judgment varied
Legal Topics
Mistake, Notice Requirement, Contract Interpretation, Compensation for Extra Work, Delay Claims, Quantum Meruit, Annulment
Source Language
English
Contract Law Construction Law Administrative Law Civil Procedure Mistake Notice Requirement Contract Interpretation Compensation for Extra Work +3 more

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Parties

Corpex (1977) Inc.

Appellant/contractor

Her Majesty The Queen in right of Canada

Respondent/owner

Procedural Posture

Contract Appeal / On Appeal to the Supreme Court of Canada From the Federal Court of Appeal; Final Judgment

Legal Issues

  1. 1 Whether the contract could be annulled for mistake as to soil conditions
  2. 2 Whether contractor may recover additional pumping costs where contractor failed to give notice required by clause 12
  3. 3 Whether costs arising from delays caused by work ordered in addition to plans/specifications are recoverable under clauses 38 and 46

Ratio Decidendi

Clause 12 creates a contractual compensation mechanism for unforeseen soil conditions and requires the contractor to give timely written notice to preserve claims; failure to give notice bars the soil-mistake claim and precludes annulment. Costs caused by delays from work ordered under clause 38 are recoverable under clauses 38 and 46 (actual cost plus 10%), so the contractor is entitled to the quantified delay-related sums; appeal allowed in part awarding those amounts.

Court Disposition

Appeal allowed in part; Federal Court of Appeal judgment reversed in part and Trial Division judgment varied

Orders

  • Action allowed for $138,486.65 with interest at the legal rate from December 5, 1974
  • Contract not annulled