By Ty Schmidt – Supervised by Professor Maharaj
1242311 Alberta Ltd. v. Tricon Developments Inc., 2021 ABCA 418, a recent decision from the Alberta Court of Appeal (ABCA), illustrates how a party’s conduct may satisfy the second step of the test for waiver by indicating an “unequivocal and conscious intention” to waive its right to rely on a contract provision.
The relationship between the parties that gave rise to the litigation began when 1242311 Alberta Ltd. (“124”), a land developer, retained Tricon Developments Inc. (“Tricon”) to construct two housing projects in 2011. After the projects had been completed, 124 claimed to have overpaid Tricon and sought to recover the gratuitous payments. At trial, 124 argued that the contracts were subject to a guaranteed maximum cost provision that precluded any right on Tricon’s part for any amount over the maximum and entitled 124 to recover the excess payment, while Tricon successfully argued that 124 had waived the right to rely on that provision. The correctness of the latter conclusion was the primary issue on appeal before the ABCA.
The two part test for waiver established by the Supreme Court in Saskatchewan River Bungalows Ltd. v Maritime Life Assurance Co.,  2 SCR 490, applied by the trial judge, and considered by the ABCA in this decision, requires that in order to find waiver, the evidence must demonstrate that the party waiving its right had:
- Full knowledge of that right; and
- An unequivocal and conscious intention to abandon it.
The trial judge’s findings of fact that were essential to the application of the test above included the conclusion that 124 had paid more than the maximum cost of the two projects once it had settled invoices issued by Tricon in September 2013, and more importantly that 124 had knowledge of this overpayment by the following month. This indicated that the first step of the test for waiver was satisfied in the circumstances because 124 was aware that it had paid more than it was required to under the maximum cost provision. The second aspect of the trial judge’s findings that were important for the purposes of the test above was the fact that the parties had discussed the issue of overpayment and that 124 nonetheless continued to pay amounts invoiced by Tricon up to and including a final payment of amounts outstanding in October 2014, and all without indicating any formal or informal protest to Tricon. This indicated that the second step of the analysis for waiver was also satisfied because 124’s conduct objectively demonstrated an intention on 124’s part to abandon its right to rely on the maximum price provision. This led to an overall conclusion by the trial judge that 124 had waived its right to rely on the maximum price provision, which the ABCA confirmed.
The key takeaway from this case for contracting parties and counsel is the importance of asserting contractual rights promptly and clearly, or reserving those rights, when it is apparent that issues relating to such rights have arisen. The more time that passes without doing so, the more likely Courts will find the rights have been waived.