Executive Summary: Key Legal and Evidentiary Issues

• Whether the arbitrator's finding that RuggedWest elected to claim in contractual quantum meruit raises an extricable question of law appealable under s 59 of the Arbitration Act.
   
• Jayen argued the quantum meruit question arose from the Partial Award and was time-barred under the 30-day limit in s 60(1).
   
• Timeliness turned on whether the Supplementary Award corrected or interpreted the Partial Award, or was merely an additional award under s 56(4).
   
• RuggedWest relied on Infinity Steel to argue that contractual quantum meruit cannot apply where a contract fixes the price or the method of determining remuneration.
   
• Section 51 of the Act lets an arbitrator set interest "unless otherwise agreed by the parties," raising whether the 59.99% contract rate bound the arbitrator.
   
• A further question was whether the contractual interest rate survived RuggedWest's termination of the ABTS.
   

Facts of the case

Between April 2022 and March 2023, Jayen Homes Ltd. engaged RuggedWest Contracting Ltd. under three fixed-price subcontracts (the On-Site, Off-Site and Excavation Subcontracts) to perform civil works for a residential development in Surrey, British Columbia. Together, the subcontracts were worth approximately $10 million. Allegations of misconduct on both sides soon followed. After a binding term sheet signed on July 20, 2023 failed to resolve their differences, the parties entered into the Amended and Restated Binding Term Sheet (ABTS) on September 8, 2023. Jayen refused to pay outstanding invoices in November 2023, and RuggedWest terminated all contracts on January 5, 2024.

Disputes under the ABTS went to arbitration before Robert J. Bauman, K.C., who was appointed on August 8, 2024. RuggedWest filed its statement of claim on August 23, 2024, and Jayen counterclaimed on September 13, 2024. In a Partial Award dated August 22, 2025, the arbitrator found that RuggedWest had elected a quantum meruit claim for the value of its work and, accepting the evidence of its expert, Augusto Patmore, with minor adjustments, awarded $2,366,598, including claims for extra work orders. Interest, he stated, was payable on that sum "(or on discrete parts of it) in accordance with the provisions of the ABTS," but he directed that the issue be set down for a brief hearing after finding he could not calculate it without further submissions.

At the October 1, 2025 hearing, RuggedWest sought interest at the ABTS rate of 59.99% and presented two calculations of $2,195,300.53 and $2,080,405.12, based on different commencement dates. Jayen countered that the quantum meruit election barred reliance on the ABTS and that interest should follow the Court Order Interest Act, RSBC 1996, c 79. In the Supplementary Award [the decision also refers to this award as the "Supplemental Award"] dated December 22, 2025, the arbitrator agreed that contractual interest did not apply, found Court Order Interest Act rates inappropriate, and set simple interest at 8% per annum on the net award from January 5, 2024 until payment. That award also reduced the amount owing by $47,942 after the arbitrator found one calculation error. RuggedWest applied for leave to appeal on January 21, 2026.

Policy and legislative provisions at issue

Section 59 of the Arbitration Act, SBC 2020, c 2 allows appeals from arbitral awards only on questions of law, and only with the parties' consent or with leave. Under s 59(4), a justice may grant leave where the importance of the result justifies intervention and determining the point may prevent a miscarriage of justice, where the point matters to a class of persons that includes the applicant, or where it is of general or public importance. Applications must be brought within 30 days after receipt of the "arbitral award, correction, interpretation or additional award on which the appeal or application is based" (s 60(1)). Corrections, interpretations and additional awards, including awards on omitted claims for interest or costs, are governed by s 56. Section 51 permits a tribunal to award simple or compound interest at the rate it considers appropriate "unless otherwise agreed by the parties." Interest at 59.99% was stipulated in paras 10, 15, 29 and 32 of the ABTS, while Jayen relied on ss 28-29 of the ABTS [the decision refers to ABTS provisions as both "paras" and "ss"] to argue that the contract rate on damages applied only after undisputed certification of a progress payment or an arbitral award resolving a contested certification.

Reasoning and analysis

Justice Butler, sitting in chambers, treated the quantum meruit question as central because the arbitrator's s 51 discretion depended on it. On timeliness, he followed Justice Newbury's chambers decision in Desert Properties Inc. v G&T Martini Holdings Ltd., 2024 BCCA 24. He read that case to mean that time runs from receipt of the final version of the award as corrected, while a later award dealing only with an additional matter such as costs or interest does not extend the time. Although the Supplementary Award was an additional award on the interest rate, it also interpreted the Partial Award. The earlier reference to ABTS interest on "discrete parts" of the sum suggested the contract rate applied to at least part of the award, whereas the later reasons held that the individual progress claims and their timing were also subsumed in the quantum meruit approach. It further corrected the award by $47,942 under s 56. Jayen's time-bar argument therefore failed, since the January 21, 2026 application fell within 30 days of the December 22, 2025 award.

On the leave question itself, RuggedWest relied on Infinity Steel Inc. v B & C Steel Erectors Inc., 2011 BCCA 215, and the passage it quotes from CH2M Hill Energy Canada Ltd. v Consumers' Co-operative Refineries Ltd., 2010 SKCA 75. It cited them for the proposition that contractual quantum meruit has no room where the contract explicitly provides for remuneration or the method of determining it. Justice Butler found that this argument ignored the more fundamental point in CH2M: contractual quantum meruit is a principle of contract construction, and the task of construction is determining the parties' intentions. Having found a valid contract that Jayen breached, the arbitrator concluded that its compensation provisions did not apply to the circumstances presented, implied a term for payment of a reasonable price, and quantified it. RuggedWest's challenge targeted that interpretive step and, in substance, argued that the arbitrator should have reached a different conclusion about the parties' intentions. Hugh's Contracting Ltd. v Stevens, 2015 BCCA 491, in which this Court found no extricable question of law in a challenge to the use of quantum meruit to value extra work, supported Jayen's position. Here, the arbitrator had examined a much broader range of circumstances: the contract terms, the breakdown of the relationship, the steps the parties took, and the way the claims were pleaded and advanced. That analysis undoubtedly required him to resolve questions of mixed law and fact. Given that the ABTS was a unique contract tailored to very particular circumstances, the answer was also unlikely to have precedential value beyond the case. With no question of law identified, the s 59(4) criteria did not need to be considered.

RuggedWest's s 51 argument turned entirely on the quantum meruit finding and so raised the same question, leaving no basis for leave. As for the alternative ground, whether the contract rate survived termination was also a question of contractual interpretation involving mixed law and fact, and it would only have arisen had an appeal on the quantum meruit issue succeeded.

Ruling and overall outcome

RuggedWest's application for leave to appeal the Supplementary Award's interest ruling was dismissed, a procedural outcome in Jayen's favour. No damages, costs or other monetary amount were ordered in this decision, and the reasons do not address costs of the leave application.