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Legal Notes: Trust and transparency are foundations for a successful project

John Bleasby
Legal Notes: Trust and transparency are foundations for a successful project

A recent Legal Notes column referenced the case, Priestly Demolition vs. Walsh Construction.

Edward Lynde, a partner with Fasken Martineau DuMoulin LLP, used the case to illustrate the consequences when one party fails to read and understand their contractual obligations.

“Parties should act in good faith, clearly communicate with each other, and attempt to work collaboratively to overcome issues to the benefit of all involved in the project,” Lynde concluded.

A comment was received from Romario Rodrigues, a construction project manager holding both law and engineering degrees. He pointed out the case illustrates the absence of proper communication and collaboration between Priestly and Walsh, both before and during project execution.

Had there been better information sharing between the two parties, the issue of an existing duct bank, mistakenly demolished, would have come up and could have been addressed. In fact, a Priestly witness expressed concerns over a “lack of information.”

Lynde addressed Rodrigues’ thoughts concerning the Priestly and Walsh dispute, telling the Daily Commercial News, “There is no substitution for clear and concise contracts.”

British architect Robert Adam suggests a possible starting point for miscommunication.

He writes too often each profession tries to carve out its own territory.

“Often it comes together badly.”

This reveals the importance of trust and transparency by all project parties.

“Complex projects involving many contractors and subcontractors and thousands of deliverables, combined with fragmented processes, have given rise to the systemic issue of a lack of trust and transparency in the industry,” writes Lukas Olbrich, chief executive of construction management software developer Sablono. “Construction projects are fraught with possibilities for misunderstanding and miscommunication.” 

Olbrich speaks of the need to break down information silos. Providing one version of the truth will then foster greater trust between all parties.

Even so, disputes can still arise. This is where good faith, communication and working collaboratively are important, said Lynde.

“Construction projects are epitomes of risk. Parties should take the time to directly negotiate and carefully draft contracts, which will memorialize the intent of the parties, thereby minimizing issues impacting the project. However, far too often parties fail to do so.”

“It is in their individual and common interest,” he said. “This can be achieved without otherwise contravening the parties’ respective contractual obligations. While each party may have their own contractual obligations and vested interests, there is a common goal of the completion of the project.”

One management tool that can help break down informational silos and improve project communication is project tracking software like that developed by Canadian consulting firm Stoneboy.

Stoneboy founder and managing director Aditya Arya told the Daily Commercial News 90 per cent of construction projects experience delays and 95 per cent have cost overruns. 

His company’s software helps to identify design and workmanship deficiencies, incomplete design and unforeseen physical conditions as the top drivers of construction disputes.

What often leads to disputes, and certainly to miscommunication, he says, are problems associated with identifying and notifying key personnel in the field about variations to the scope of work.

That’s followed by issues concerning documentation, such as the retrieval of required information and making it available in a timely manner.  The Priestly Demolition vs. Walsh dispute again comes to mind.

Stoneboy and its associate company Novologic have developed Enterprise Resource Planning software that runs what they call Variation Management Protocol, a framework that identifies, catalogues, analyzes and then quantifies variation in construction projects.

“By pinning the variations to deviations from baseline scope, baseline time and baseline cost, variations are easily identified,” the company says.

It can also help determine relationships between cause and effects earlier and with a high degree of certainty.

“One of the biggest problems to arise from a lack of trust and transparency is waste,” says Olbrich. “Time and money are wasted as a result of faulty reporting, broken processes, dependencies between stakeholders, delays, double work, manual work observations and late payments.”

Nobody wants that.

John Bleasby is a Coldwater, Ont.-based freelance writer. Send comments and Legal Notes column ideas to

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