COVID-19: Impacts on Civil Litigation, New Build Real Estate Transactions and Construction Contracts
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The news is full of updates regarding the COVID-19 pandemic and the situation is constantly evolving. Here are some current impacts that the pandemic is having on civil litigation matters, new build real estate transactions and execution of construction or other contracts.
Civil Litigation Court Suspension
On March 15, 2020 the Ontario Superior Court of Justice announced the suspension of regular operations, including civil, family and criminal proceedings.
The Court will continue to hear urgent and emergency matters at this time, including matters related to public health and safety and COVID-19, amongst others. Full details about the suspension have been provided on the Ontario Superior Court of Justice Website.
On March 20, 2020, the Ontario government also suspended any limitation period imposed by any “statute, regulation, rule, by-law or Order of Government of Ontario.”
The government also suspended any rule establishing any time period “within which any step must be taken in Ontario”, including, for example, the Rules of Civil Procedure.
However, the suspension of procedural timelines is at the discretion of the Court or Tribunal. For extremely urgent matters, therefore, a Court might order certain procedural steps be taken or adhered to notwithstanding this suspension.
These suspensions are retroactive to March 16, 2020. This regulation was invoked by the Emergency Management and Civil Protection Act, and is subject to any periods of renewal. This was necessary to protect the rights of both plaintiffs and defendants in civil litigation matters and speaks to the severity of COVID-19.
Unavoidable Delays in New Build Real Estate Transactions
Tarion has recently posted information regarding how the unavoidable delay provisions may protect new home builders who need to extend the delivery timelines due to impacts from the COVID-19 pandemic.
Some of these impacts may include disruptions to labour or material supplies or the inability to obtain government issued permits and inspections, amongst others.
The unavoidable delay provision is located in the Addendum to the new home Agreement of Purchase and Sale.
There is some variation in this provision amongst builders. If you think that impacts from the pandemic are going to affect your delivery timeline, contact a lawyer to review your unavoidable delay provision.
Force Majeure in Construction and Other Contracts
The COVID-19 pandemic may impact delivery of some construction or other contracts.
Most contracts include a force majeure provision, which protects parties to the contract from unforeseeable circumstances which prevent them from being able to fulfill their contractual obligations.
COVID-19 could qualify as a force majeure depending on the language used in the contract. Force majeure provisions that account for situations such as “pandemics”, “disease” or “illness”, amongst others, could potentially capture the COVID-19 pandemic.
Force majeure cannot be claimed for minor inconveniences or disruptions. The onus is on the affected party to prove that the force majeure provision applies and that there is a direct link between the force majeure event and their inability to perform the contract.
So, if you are looking to invoke a force majeure provision because of COVID-19 impacts, you will need to show the direct link between the COVID-19 pandemic and your inability to perform the contract.
If you think that the COVID-19 pandemic may impact the execution of your construction or other contract, contact a lawyer to review your agreement to see what protections your contract offers.
Please contact Michael Paiva at 519.729.5038 or at 416.800.1733 for more information, or if you require assistance with a civil litigation, real estate or construction matter.
