Executive Summary: Key Legal and Evidentiary Issues

• Dispute centered on whether the agreement between the parties was a quote or an estimate.

• Court did not resolve whether the work in the additional invoices was within the original scope or unauthorized “extra” work.

• Absence of written change orders raised legal issues about entitlement to payment for additional work.

• Trial judge cited correct legal test for extra work claims but failed to make required factual findings.

• Counterclaim analysis was flawed due to lack of factual conclusions on scope and improper reliance on unsupported theories.

• Errors of law and fact warranted a new trial on both the claim and the counterclaim.

Facts and procedural history

Great Northern Grain Terminals Ltd. (“Great Northern”) contracted Allmills Construction & Maintenance Inc. (“Allmills”) to upgrade a grain handling facility. The terms were provided in a document titled “Quote,” which set out a price and stated that any changes to the scope of work had to be authorized through written change orders.

Allmills invoiced Great Northern for the amount stated in the quote, and this invoice was paid. Allmills later issued additional invoices for other work, even though no written change orders had been made. Great Northern refused to pay some of these invoices, asserting that the additional work was either already included in the original agreement or was not approved.

In response, Allmills brought a claim against Great Northern for the unpaid invoices. Great Northern filed a counterclaim alleging deficiencies in Allmills' work and sought damages for repairs and lost profits.

Trial level decision

The trial judge awarded some damages to Allmills and dismissed the counterclaim by Great Northern. However, the judge did not resolve key factual questions, such as whether the “Quote” was a binding contract or merely an estimate. He failed to determine whether the additional invoiced work was within the original scope or extra, and whether it was authorized.

While the judge recited the correct legal test for when extra work can be invoiced in the absence of formal change orders, he did not make factual findings to show that Allmills met this test. Instead, he referenced a legal test applicable to estimates and relied on it to award damages.

Regarding the counterclaim, the judge made no factual findings about the scope of work and did not properly assess whether alleged deficiencies were Allmills’ responsibility. He also considered unsupported theories, including one suggesting that workers from another project may have caused the issues, which contradicted uncontroverted evidence.

Appeal outcome and implications

The Alberta Court of Appeal found that the trial judge committed errors of law and failed to make essential findings of fact. These deficiencies undermined both the judgment in favor of Allmills and the dismissal of Great Northern’s counterclaim.

On February 4, 2025, the appeal was heard, and on February 12, 2025, the Court of Appeal—comprised of Justices Frans Slatter, Jolaine Antonio, and April Grosse—allowed the appeal and ordered a new trial on both the claim and the counterclaim. The court also noted that the parties were free to pursue alternative dispute resolution.