Cost Consequences of a Trial Adjournment in a BC Construction Dispute

The Dispute

A trade contractor was pulled into the litigation that followed a construction project, brought in by a defendant based overseas that held no assets in Canada. Two orders had already been made requiring that defendant to put up money to cover costs, and the second instalment arrived late. Less than three weeks before a trial set to run sixty days, with the preparation for it largely spent, the overseas defendant asked the court to put the trial off.

The Parties’ Positions

The defendant applied to adjourn a trial set to commence on 7 April 2025 and to run for sixty days. It put the application on two footings. The first was a demand it had made for documents, delivered late in the proceeding, which it said had left it unable to prepare. The second was a responsive expert report it wished to deliver before trial. It brought that application from a particular position in the litigation. The defendant was a company resident outside Canada holding no assets in this country, and two orders for security for costs stood in favour of the construction manager and the trade contractor. The second tranche of that security had been paid late.

The plaintiffs, the construction manager and the trade contractor each came to the application having committed counsel and preparation to sixty days of hearing time. The chronology on which the responding side stood appears in the reasons, including that the defendant had obtained an order extending the date for payment of security for costs only earlier in the same year. The factors governing an adjournment were those collected in Navarro v. Doig River First Nation, which the court treated as reducing in substance to the question of what the interests of justice required.

The Court’s Decision

The court granted the adjournment, describing itself as doing so extremely reluctantly, and concluded on its review of the evidence that the defendant had been dilatory. It did not accept the late document demand as a reasonable excuse for not preparing for trial, and it made no finding that the responsive expert report the defendant wished to deliver would be treated as responsive by the trial judge. It attributed no fault to the plaintiffs, the construction manager or the trade contractor. The trial was adjourned generally for rescheduling at the earliest convenient date, and that date was made peremptory on the defendant. Lump sum costs thrown away were fixed on the tariff at five units per day over sixty days of preparation, three hundred units plus tax. That produced two payments of $36,960, one to the plaintiffs and one to the construction manager and the trade contractor collectively, $73,920 in all. Non payment by the date set would give the responding parties liberty to apply to strike the defence, the counterclaim or the third party notice, an outcome the court said it was not predicting. Their costs of the application followed in any event of the cause.

Key Lessons for Trade Contractors and Project Owners

• Seek security for costs early where a party to the litigation holds no assets in the jurisdiction. A costs award against a company resident outside Canada with nothing in this country is difficult to enforce, and an order for security obtained early is what can make the later award worth having.
• Expect costs thrown away on an adjournment to be fixed as a lump sum. The court here worked from the tariff, five units per day over sixty days of preparation, so an award of this kind may bear no direct relation to what the preparation actually cost.
• Ask for terms beyond costs when a trial date is lost. The orders made here included a peremptory trial date and liberty to apply to strike on non payment, and a party seeking an adjournment can generally expect terms of that kind to be proposed against it.
• Make document demands early in a long proceeding. A late demand was not accepted here as a reasonable excuse for being unprepared, and a demand delivered close to trial may carry little weight as a ground for delay.

The orders made on this application turned on the conduct of this litigation and on the material before the court on that day. A similar application may resolve differently.

ATAC LAW acts for applicants and for responding parties in civil and commercial litigation, including the interlocutory applications that shape how a construction dispute reaches trial.

This matter was conducted by Gurpal Sandhu, an associate lawyer at ATAC LAW, who acted for the trade contractor.