Construction Dispute Resolution Seminar Series · index construction dispute resolution seminar series bonding on the construction project thursday, may 10, 2012 tab 1. presentation:

MONTRÉAL OTTAWA TORONTO CALGARY VANCOUVER NEW YORK CHICAGO LONDON BAHRAIN AL-KHOBAR* BEIJING SHANGHAI* blakes.com

*Associated Office Blake,Cassels & Graydon LLP

Construction Dispute Resolution Seminar Series

Bonding on the Construction Project

Thursday, May 10, 2012

INDEX

CONSTRUCTION DISPUTE RESOLUTION SEMINAR SERIES

BONDING ON THE CONSTRUCTION PROJECT

THURSDAY, MAY 10, 2012

TAB

1. PRESENTATION: BONDING ON THE CONSTRUCTION PROJECT

BY RICH BELL & COURTNEY KACHUR 2. PRESENTATION: NEW & IMPROVED, WHAT’S THE LATEST IN THE WORLD OF SURETY

BONDS BY LOIS INNES, MARSH CANADA LIMITED

3. PROFILES: CONSTRUCTION DISPUTE RESOLUTION GROUP - RICH BELL, DAVID TUPPER, KEN MILLS, CHRIS PETRUCCI, COURTNEY KACHUR LOIS INNES, MARSH CANADA LIMITED

1

Bonding on the Construction Project

Richard Bell, PartnerLois Innes, Senior Vice President, Marsh Canada Limited

Courtney Kachur, Associatewith thanks to Adam Scrivens, student-at-law

May 10, 2012

Construction Dispute Resolution Seminar Series

Outline• Surety Bonds Overview• Bonds vs. Insurance• Types of Surety Bonds• Triggering the bond claim• Common Pitfalls and Defences Available to the Surety• New Performance Bond Wording – Enhanced Performance

Bond 2012• “Dual Obligee” Rider Problems• New standardized format of performance bonds

2

Surety Bonds Overview

• Prominent form of performance security in the North American construction industry.

• Allows parties to minimize risk of contractor default and project delay or collapse.

• Tri-partite contract (Principal-Surety-Obligee).

• Not the same as insurance.

Surety Bonds Overview

Subcontract Bond (payment)

Principal(Contractor)

Obligee(Owner)

Surety

Premiums

Indemnity/Right of Action

Bond

Bond

3

Bonds vs. Insurance• Insurance Policies

– 2 party agreement (Insured and Insurer)

– Insurer agrees to indemnify in the event of a loss

– Premiums determined on theoretical basis of loss occurring

– Insurer cannot claim against Insured in event of loss; recourse is limited to subrogation

• Bonds– 3 party agreement

(Principal, Surety and Obligee)

– Surety and Principal guarantee to Obligee that loss event will not occur

– Premium is administrative charge

– Surety can recover from Principal after making payment on bond

– Labour & Material Payment Bonds: claimant sues as third party beneficiary

Types of Construction Surety Bonds

• Bid Bond• Labour & Material Payment Bond• Performance Bond • Construction Lien Bond

4

Bid Bond• Posted by a contractor for submitted bid.• Ensures that contractor enters into “Contract B”: Ron

Engineering & Construction (Eastern) Ltd. V. Ontario [1981] 1 S.C.R. 111

• If a contractor is awarded a contract in response to a tender but dishonours its bid, the bond will cover the difference between its winning bid and the next bid.

• Protection for owner against contractors submitting false bids.

• The surety can then recover from the contractor.

Labour & Material Payment Bond

• Ensures that sub trades or suppliers are paid and the project is kept free of liens.

• Generally taken out by contractors (principal) for the benefit of the owner (obligee) – often required under the contract.

• Prevents any unpaid sub trades or suppliers to which the principal may owe payment (claimants) from claiming against the principal or filing a builder’s lien against the obligee, and instead allows them to claim under the bond.

5


• Subcontractor or supplier sues as third party beneficiary.

• Claimant must show that:– It has a direct contract with the principal;– For labour, materials or both; and– Which are used or are reasonably required for

use in the performance of the Contract with the owner.


Triggering the bond claim• Failing to pay accounts of sub-trades.

– Claim is made by subcontractor or supplier to surety as third party beneficiary.

• Requires:– Falling within scope of “claimant”.– Providing proper notice to the surety (and others).– Complying with time limits in the bond.

6

• Taken out by contractor or supplier (principal).• Ensures for the owner (obligee) completion of the project

for no more than contract price.• On declaration of default of performance, surety agrees

to:– complete the work;– issue new tenders and/or pay for the completion of work; or– reimburse owner for completion of work.

• Principal (contractor or supplier) is liable to surety.

Performance Bond

Performance Bond

Triggering the bond claim• Failing to meet:

– specific contractual obligations;– financial obligations; or– project schedule.

• Insolvency• Refusing to remedy construction deficiencies.• BUT: there must be a default – mere

deficiencies are generally insufficient.

7

Construction Lien Bond

• Removes liens filed by unpaid sub trades and suppliers against an owner’s property.

• Bond is posted with the court as security to stand in place of the lien.

• The lien is cleared from the owner’s title.• Either the principal contractor or surety

can then defend the lien claim.

Common Pitfalls & Defences Available to the Surety

• Material change to the underlying contract.• Failure to notify the surety.• Timing and limitations issues.• Any defences available to the principal.• Defences relating to the contract itself.

8


• Material Change In The Contract:– Material change that prejudices the surety;– Change that makes the contract materially different

than the contract as bonded (“cardinal change”);– Often a grey area as to when a change is “material”.

• Other Prejudice to the Surety:– Deviation from payment schedule or prepayments;– Granting of extensions and slippage in schedule.


• Failure to Notify the Surety:– Notice provisions are a term of the contract;– The surety has a right to investigate the claim in order

to make an informed decision as to a response (particularly for performance bonds);

– Some bonds may require advance notice to the surety of an intention to note the principal in default;

– The surety will not be liable where notice comes too late for it to exercise its options: Marigold Holdings Ltd. v. Norem Construction Ltd. (1988) 60 Alta. L.R. (2d) 289 (Q.B.).

9


• Timing Issues:– Most bonds require the claimant to bring an

action within a certain period (often one year);– Likely unenforceable due to the Limitations

Act;– Nonetheless, file the action in any event, even

where negotiations with the surety are ongoing.


• Reliance upon the Principal’s Defences:– Surety can take advantage of any substantive

defences which could have been raised by the principal at law (formation of contact, enforceability, breach by owner);

– Liability of the surety is co-extensive with the liability of the principal (the surety’s liability is only triggered when the principal/contractor is liable to the obligee/owner).

10


• Defences Relating to the Contract Itself:– If the underlying contract is unenforceable, then the

surety will have no obligation to respond;– Contract may be unenforceable for invalidity,

impossibility or illegality (once again, the obligations of the surety extend only as far as the obligations of the principal under the contract);

– Contract which cannot be performed legally: • One Hundred Simcoe Street Ltd. v. Frank Burger

Contractors Ltd. (1969) 2 D.L.R. (2d) 735 (S.C.C.): (plans and specifications included in the underlying contract not complying with the building code);


– Contract can be performed legally but is made with the intention of violating the law:

• Miller v. Moore (1911), 3 Alta. L.R. 297 (C.A.):(contract to construct an addition to a brothel).

11


• The Bond Limit or Penalty

Tips to Avoid the Surety’s Defences

• Read the bond wording very carefully and be aware of its terms. It is a contract.

• Follow all notice provisions under the bond scrupulously. Diarize the dates and give timely and proper notice to all required parties.

• Give notice within the notice period even if the current intention is not to make a claim under the bond.

• Commence an action within the time limit prescribed, even if negotiations with the surety are ongoing and notwithstanding a later limitation period at law.

12


• Prior to terminating the contract, review the bond to ensure that this does not relieve the surety of its obligations or check with the surety.

• Confirm terms of default in the underlying contract prior to termination and claiming under the bond.

• Keep the surety in the loop and try to work with the surety as much as possible.


• If the surety elects to hire a new contractor, consider obtaining either a new performance bond from this contractor or confirmation from the surety that the existing performance bond will apply to the new contractor.

• Stick to payment terms as set out in the underlying contract: overpayments and early payments can be seen as prejudicial to the surety as they increase the surety’s risk under the bond, even if made in good faith: Thomas Fuller Construction Co. (1958) v. Continental Insurance Co., [1973] 3 O.R. 202 (H.C.J.).

• Also be careful in granting extensions to the contractor.

13

Advancing a Bond Claim • Surety Association of Canada recommends that

the obligee provide the surety with certain documents:– copy of the contract and bond;– copies of any change orders issued under the

contract; and– up-to-date summary of the accounting between the

obligee and principal.• Keep surety in the loop, comply with all formal

notice requirements and work with the surety.

Surety Bonds

• Some common criticisms:

– Delayed response to default; and

– Contractor’s lack of control.

1

0MARSH

NEW & IMPROVEDWHAT’S THE LATEST IN THE WORLD OF SURETY BONDS

1MARSH

Enhanced Performance Bond 2012

Designed to respond to owners’ concerns• Surety Association of Canada consulted with Owners &

Contractors: - More “certainty” in the claims process.- More responsiveness to a claim.- More frequent and effective communication between sureties

and owners.

• In 2008 Surety Association Task Force appointed to respond to needs of stakeholders.

• December 2011 – SAC Board of Directors approves new process enhanced performance bond; introduced in January 2012

2

2MARSH

Enhanced Performance Bond 2012

• Surety Association work with CCDC to include new provisions in the updated industry standard.

• Includes many features of the standard CCDC 221 Performance Bond but with service improvements and clarifications.

• Provides more responsive services to owners by…..

New “enhanced” performance bond provides construction buyers with more timely & responsive claim service.

3MARSH

Enhanced Performance Bond 2012• Pre-Demand Conference to allow surety and owner to prevent

problems from turning into a default. • Timelines for Surety’s Response:

- 5 days to acknowledge a response & request info.- 21 days (from receipt of information) for surety to respond to

owner with their response.• Emergency Remedial Work: Allows Owner to address urgent

issues (e.g. safety) under the bond.• Post-Demand Conference: Mechanism to minimize or eliminate

work stoppages while surety investigates.• Contact Coordinates: Contact information for all parties to

facilitate notices and communication.

3

4MARSH

What is a Dual Obligee Rider

• Intent is to add additional obligees to a performance and/ or payment bond.

• Often misused.• Dual Obligee – Dual Responsibility.• Potential major exposure for the Owner as a Dual Obligee.• In the event of bankruptcy or default of the CM or GC, the

owner assumes the position of the CM or GC and therefore assumes payment as a precondition of trade performance, highly unlikely that trades would agree to different terms.

5MARSH

• Owner as dual obligee may be exposed to a “double payment” situation.

• The Owner will be precluded from calling on performance security if the trades refuse to perform without payment.

• In essence the defaulting CM or GC will have prejudiced the Owners’ rights and protection under the bond

• Signed copy of the dual obligee rider must be presented to the surety to put forth a claim.

• Owners may find themselves unprotected if the primary obligee has breached the bonded contract.

4

This document and any recommendations, analysis, or advice provided by Marsh (collectively, the "Marsh Analysis") are intended solely for the entity identified as the recipient herein ("you").This document contains proprietary, confidential information of Marsh and may not be shared with any third party, including other insurance producers, without Marsh’s prior written consent. Any statements concerning actuarial, tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, accounting, tax, or legal advice, for which you should consult your own professional advisors. Any modeling, analytics, or projections are subject to inherent uncertainty, and the Marsh Analysis could be materially affected if any underlying assumptions, conditions, information, or factors are inaccurate or incomplete or should change. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Except as may be set forth in an agreement between you and Marsh, Marsh shall have no obligation to update the Marsh Analysis and shall have no liability to you or any other party with regard to the Marsh Analysis or to any services provided by a third party to you or Marsh. Marsh makes no representation or warranty concerning the application of policy wordings or the financial condition or solvency of insurers or reinsurers. Marsh makes no assurances regarding the availability,cost, or terms of insurance coverage.

Richard Bell Partner, Calgary Office Blake, Cassels & Graydon LLPDirect 403-260-9656 Facsimile 403-260-9700 [email protected]

Profile Rich is a partner in the Litigation Group. He earned his law degree from the University of Toronto in1997 as well as graduate and undergraduate degrees from the University of Oxford (where he was aCommonwealth Scholar) and the University of Saskatchewan.

Prior to beginning his articles at Blakes, Rich also served as law clerk to the Honourable MadamJustice C. D. Hunt of the Alberta Court of Appeal and the Honourable Mr. Justice T. F. McMahon ofthe Alberta Court of Queen’s Bench.

With over 13 years of litigation experience, Rich has appeared before all levels of courts in Alberta,as well as the Federal Court of Canada and the Tax Court of Canada. He has been involved in several high profile litigation cases that have received significant media attention from both the localand national press and television. His practice in the area of construction dispute resolution hasinvolved defending various cost overrun, delay, warranty, alleged defect and default claims and cost-plus contract claims, as well as prosecuting surety bond claims and prosecuting and defending builders’ lien actions.

Rich has been recognized in the 2011 and 2012 editions of The Best Lawyers in Canada ® in corporate and commercial litigation.

Further recent litigation experience includes the following:

• Ongoing defence and prosecution of various claims regarding alleged cost overruns and billing disputes with respect to the construction of an oilsands water treatment facility near FortMcMurray, Alberta

• Prosecution of a claim for unpaid invoices and defence of a counterclaim for delay, alleged defects and breach of contract on behalf of a materials supplier on a major Alberta water line construction project, leading to a successful settlement

• Defence of a claim for unpaid invoices and additional costs incurred by the general contractor,along with the prosecution of counterclaims, with respect to the construction of an in-situ oilsands facility for a major oilsands producer, leading to a successful settlement of all claims

• Ongoing defence of construction and builders’ lien claims relating to the construction of theCross Iron Mills mall north of Calgary

• Prosecution of performance bond and labour and material payment bond claims regarding the failure of owners or general contractors to satisfy invoices issued by a material supplier on

various Alberta construction projects

• Successfully defending a claim over ownership and alleged unitization of a natural gas well at trial and appeal for Dominion Exploration Canada Ltd.

• The defence of a major oil & gas producer in an ongoing $110 million claim for alleged breach of contract and expropriation of business

• Representation of a major oil & gas producer in a commercial arbitration regarding the allocationof capacities at a jointly-owned processing facility leading to a favourable negotiated settlement

• Successfully defending challenges to the powers of the Alberta Auditor General, confirming his authority to conduct an audit of the Alberta Securities Commission

Education

Admitted to the Alberta Bar – 1998 LL.B., University of Toronto – 1997 M.Phil., University of Oxford – 1993 B.A. (Hon.), University of Saskatchewan - 1991

Publications Co-author - "Integrity of Tender Process Reinforced", Construction Business, p. 34, March/April, 2010. Co-author – “Ontario Court of Appeal Reinforces Integrity of Tender Process and Prohibition Against Improper Bid Repair in Maystar Decision”, Blakes Bulletin on Litigation/Construction, November, 2009 Case Comment - "Man-Shield (Alta.) Construction Inc. v. 1117398 Alberta Ltd.", Construction Law Letter, Vol. 25, No. 3 (January/February, 2009) Co-author - "Alberta Court of Appeal Finds Mistake in Dispute over Unit Agreement ", Blakes Bulletin on Litigation, January 2009.

Professional Activities Co-speaker: "Builders' Liens and Holdback Basics", Client Seminar for EllisDon Corporation, Vancouver, March 16, 2012. Speaker – “Contractual Risk Transfer in the Oil Sands”; Oil Sands Forum: Operations and Construction Risk Management Overview, October 24, 2011 Speaker – “Update on Bidding and Tendering Issues”, seminar for Marsh Canada and the Surety Association of Canada, September 9, 2011 Speaker – “Tendering and Bidding on Construction Projects”, Construction Dispute Resolution Seminar, June 7, 2011 Speaker – “Dealing with Construction Liens”, Federated Press Fourth Construction Claims

Conference, April 18, 2011 Speaker – “The Sky is Falling: Hazardous Debris and Other Potential Tort Liability on the Construction Project, Part I”, Construction Dispute Resolution Seminar, October 28, 2010 Speaker - "Effectively Litigating Construction Claims", Strategies for 2010: Tendering, Risk Management and Dispute Resolution, MMPI Canada Construction Law Primer conference, September 28, 2010 Speaker – “Builders’ Liens”, Construction Dispute Resolution Seminar, February 4, 2010 Speaker – “Hot Button Topics in Intellectual Property Law, Intellectual Property Seminar, October 1, 2009 Speaker – “Termination of Construction Contracts – the Owner’s Perspective”, Construction Dispute Resolution Seminar, June 18, 2009 Speaker – “Avoiding and Minimizing Delay in the Construction Project”, Construction Dispute Resolution Seminar, April 8, 2009 Speaker - "Intellectual Property and the Energy Sector", Blakes Seminar for Emerging Energy Sector Clients, March 12, 2008

30826619.4

David Tupper Partner, Calgary Office

Blake, Cassels & Graydon LLP Direct 403-260-9722 Facsimile 403-260-9700 [email protected]

Profile David Tupper is a partner in the Litigation Group. His practice involves all aspects of corporate/commercial litigation with an emphasis on construction law, insurance law, oil and gas law, and commercial disputes. He has appeared before all levels of courts in Alberta, in applications, trials and appeals, and has appeared in the Federal Court and the Federal Court of Appeal.

David has acted as counsel for plaintiffs and defendants in construction disputes, including engineering, builder and architectural issues. The construction projects at issue have included oil sands facilities, roadways, bridges, buildings, manufacturing plants and energy facilities. Issues have included delay, cost overruns, deficient construction, deficient design and negligent estimates. Many of the matters have been worth hundreds of millions of dollars and have involved hundreds of thousands of documents. The matters have been dealt with both by way of arbitration and in the courts.

In the insurance area, David has acted as counsel in subrogation actions, coverage actions, and liability defence matters, involving property, liability, and life insurance policies. He has also prepared coverage opinions dealing with numerous issues involving property and liability policies and reinsurance losses of very significant magnitude.

David is ranked in Chambers Global: The World's Leading Lawyers for Business as a leading Alberta business litigator and is recognized as having a "'tremendous ability to listen to clients, understand the issues, and convert that to a successful strategy'." He is ranked in The Best Lawyers in Canada in the Corporate and Commercial Litigation and Alternative Dispute Resolution categories. David was also one of the lawyers named in the "Top 40 Under 40" by Calgary Inc. magazine in September 2005. In his free time, David is active in many volunteer organizations.

Representative Matters Among the construction matters in which David has been involved are the following:

• Acted in a long international commercial arbitration with a value of over C$800-million, involving construction issues and insurance issues in the oil sands.

• Several actions as plaintiff's counsel relating to negligent design and maintenance of compressors.

• Defence of an engineer in litigation relating to negligent design and build of a roadway.

• Defence of an architect relating to negligent design of a recreational complex.

• Acted for a contractor in a dispute with multiple parties as to validity of builders' liens and the timing of filing.

- 2 -

• Acting for a multinational construction company in defence of allegations of negligent design and gross negligence in project management relating to an international construction project. The claim asserts damages of more than C$30-million.

• Represented a large oil sands company in a multimillion-dollar dispute over the applicability and validity of a cancellation provision in a construction contract.

• Counsel to a multinational energy company in a contractual dispute regarding the design, supply and installation of components for a major project in the Alberta oil sands.

• Acted for a contracting firm in litigation involving a government owner and an engineering firm. This matter involved interpretation of a design-specified contract evaluation of construction practices against industry standards.

• Acted for a company in a suit over deficiencies related to construction of its headquarters building.

Education Admitted to the Alberta Bar - 1996 LL.B., University of Toronto - 1995 B.A., University of Alberta - 1991

Media Appearances Interviewed and mentioned - "Environmental Issues in Canada", For publication in Advantage Monthly, The CIP Society, Insurance Institute of Canada, April 12, 2011.

Publications Co-author - "Alberta Courts Breathe Life into New Rules", Blakes Bulletin on Litigation & Dispute Resolution, June 2011. Co-author - "New Alberta Rules of Court: Important Changes to Drop Dead Rule", Blakes Bulletin on Litigation & Dispute Resolution, October 2010. Co-author - "Duty of Insurers to Defend Revisited by Supreme Court of Canada", Blakes Bulletin on Litigation & Dispute Resolution, October 2010. Co-author - "International Commercial Arbitration: Supreme Court of Canada Enforces Domestic Limitation Period on Application to Enforce Foreign Arbitration Award", Blakes Bulletin on Litigation & Dispute Resolution, May 2010. Author - "Hunt Succeeds Before Energy Resources Conservation Board in Competitive Drainage Case", Blakes Bulletin on Energy - Oil & Gas, January 2009. Co-author - "Alberta Court of Appeal Finds Mistake in Dispute over Unit Agreement ", Blakes Bulletin on Litigation, January 2009. Author - "Court of Appeal Clarifies Alberta Limitations Law", Blakes Bulletin on Litigation, July 2008. Co-author - "Design Services Ltd. v. Canada", Blakes Bulletin on Procurement/Litigation, July 2008.

- 3 -

Professional Activities Co-speaker - "Terms of Engagement: Non-Competition Clauses, Fiduciary Duties, Clawbacks and Employment Contracts", In-house Counsel Network Seminar, Calgary, April 19, 2012. Co-speaker - "Builders' Liens and Holdback Basics", Client Seminar for EllisDon Corporation, Vancouver, March 16, 2012. Co-speaker - "Update on Securities Class Actions", Break-out session at Blakes Class Action Client Seminar, Toronto, February 8, 2012. Speaker - "Developing a Winning Strategy for Managing Construction Claims", Workshop presentation, 20th Annual Western Canadian Construction Superconference: Planning and Managing Construction Projects in Western Canada's Growing Economy, Calgary, January 23-25, 2012. Co-speaker/Panellist - "Alternative Dispute Resolution - Negotiation", University of Calgary 2nd year block week, Calgary, January 3, 2012. Speaker - "Protecting against Subcontractor Default", Calgary Bar Association Construction Law Subsection Meeting, Calgary, December 19, 2011. Speaker – "New Trends and Best Practices for Drafting Construction Contracts", Project Management Conference – Northern Construction Trade Fair, Yellowknife, Northwest Territories, November 29-December 1, 2011. Co-chair and Speaker - "Effectively Litigating Construction Claims", 4th Annual Managing Risk in Construction Contracts, The Canadian Institute, Edmonton, Alberta, November 22-23, 2011. Co-chair and Speaker - "Positioning Your Insurance Claim for Success to Ensure You Avoid Costly Losses", 4th Annual Managing Risk in Construction Contracts, The Canadian Institute, Edmonton, Alberta, November 22-23, 2011. Co-speaker - "Privilege Practice Points", Seminar for In-house Counsel Network, November 17, 2011. Speaker - "Surety Case Law Update", Marsh Surety 101 Seminar for Enbridge, Calgary, Alberta, November 16, 2011. Speaker - "Litigation Management", Lex Mundi and Canadian Corporate Counsel's Fall Training Camp for New In-House Counsel, Calgary, Alberta, November 7, 2011. Co-speaker - "Contractual Risk Transfer in the Oil Sands", Oil Sands Forum: Operations & Construction Risk Management Overview, Calgary, Alberta, October 24-25, 2011. Co-speaker - "Update on Progressive Homes and Recent Developments in Casualty Insurance", Breakfast at Blakes Seminar, Toronto, September 15, 2011. Co-speaker - "Update on Bidding and Tendering Issues", Seminar for the Surety Association of Canada, Calgary, Alberta, September 9, 2011. Speaker - "International Business & Arbitration", Back to School CLE Symposium, Association of Corporate Counsel, Houston Chapter, Houston, U.S.A., August 25, 2011.

- 4 -

Co-speaker - "Tendering and Bidding on Construction Projects - The Owner's Perspective", Construction Dispute Resolution Seminar, Calgary, Alberta, June 7, 2011. Co-speaker - "Privilege, Document Production and Danger of E-mails", Seminar for Pembina Pipeline Corporation, April 28, 2011. Speaker - "Recent Developments in Securities Class Action Litigation", Corporate Counsel Section Meeting, The Canadian Bar Association, Calgary, Alberta, February 23, 2011. Speaker - "Reducing Risk Through the Proper Use of Insurance and Surety Bonds", Western Canadian 7th Annual Legal & Business Guide to Public Procurement, The Canadian Institute, Vancouver, British Columbia, February 2-3, 2011. Co-speaker - "Avoiding Liability and Litigation by Identifying, Shifting and Minimizing Risks in Bidding and Tendering", 19th Annual Western Canadian Construction Superconference, The Canadian Institute, Calgary, Alberta, January 24-25, 2011. Speaker & Author - "Case Law Update and Regulatory Round-Up", Recent Developments in Pension and Employee Benefits Law, Blakes Pension Seminar, Calgary, Alberta, November 30, 2010. Speaker - "New Alberta Rules of Court", Blakes Seminar for Inhouse Counsel Network, Calgary, Alberta, November 26, 2010. Speaker - "Gross Negligence & Wilful Misconduct", Blakes Seminar for AMEC, Ramada, Calgary, Alberta, November 19, 2010. Speaker - "Successfully Utilizing Construction Contracts to Control Financing Risks", Managing Risk in Construction Contracts, The Canadian Institute, Edmonton, Alberta, November 18, 2010. Speaker - "Examining the Ramifications of the Supreme Court of Canada's Decision in the Tercon Appeal", Infonex Seminar, Toronto, Ontario, November 17, 2010. Speaker - "The Sky is Falling: Hazardous Debris and Other Potential Tort Liability on the Construction Project, Part I", Construction Dispute Resolution Seminar, Calgary, Alberta, October 28, 2010. Speaker - "The Tercon Decision: A Fundamental Change of Fundamental Breach or More of the Same?", Corporate Counsel Section, Canadian Bar Association, Calgary, Alberta, May 26, 2010. Speaker - "Effectively Managing Bonding and Insurance Coverage Risks", 2nd Annual Construction Superconference Saskatchewan, The Canadian Institute, Regina, Saskatchewan, April 22-23, 2010. Speaker - "Effectively Litigating Construction Claims", 18th Annual Western Canadian Construction Superconference, The Canadian Institute, Calgary, Alberta, January 25-27, 2010. Speaker - "A Better Understanding of Contract Indemnity Provisions and the Possible Disconnect between those Provisions and Liability Insurance", Inhouse Counsel Network Seminar, The Ranchmen's Club, Calgary, Alberta, November 19, 2009.

- 5 -

Speaker - "Managing Risks in Construction Contracts and Litigation of Construction Claims", Project Management Conference, Yellowknife, Northern Canada, November 17-19, 2009. Co-speaker - "Process and Risks of Industrial Fire Investigation - Case Study - Explosion and Fire at a Gas Straddle Plant in Taylor, B.C.", Canadian Industrial Emergency Conference & Expo, Edmonton, Alberta, October 5-7, 2009. Co-speaker - "Termination of Construction Contracts--The Owner's Perspective", Construction Dispute Resolution Seminar, Petroleum Club, Calgary, Alberta, June 18, 2009. Speaker - "The One-Hours Lien Primer", Construction Law Update: Construction Law Strategies for 2009: Risks Redefined, BMO Centre, Calgary, June 17, 2009. Speaker - "Reservation of Rights, Non-Waiver Agreements and Law of Estoppel", Breakfast at Blakes Seminar, Calgary, June 16, 2009. Speaker - "Preparing for Trial", Inhouse Counsel Network Seminar, The Ranchmen's Club, Calgary, April 16, 2009. Speaker - "How to Differentiate between 'contaminated sites' versus 'sites that are contaminated' and the actual/potential liabilities", Blakes: How to Seminar for Environmental Consultants, Calgary, April 9, 2009. Co-speaker - "Avoiding and Minimizing Delay Before and During the Project", Construction Dispute Resolution Seminar Series, Petroleum Club, Calgary, April 8, 2009. Speaker - "CNR v. Royal Sun Alliance Decision and Management of Liability Claims", Breakfast at Blakes Seminar, Toronto, April 2, 2009. Co-speaker - "Minimizing and Managing Project Risk Prior to Beginning Construction", Construction Dispute Resolution Seminar Series, Hyatt Regency, Calgary, Alberta, February 10, 2009. Speaker - "Construction Superconference - Managing Risks and Maximizing Opportunities: Effectively Litigating Construction Claims", The Canadian Institute, Hyatt Regency, Calgary, Alberta, January 19-20, 2009. Speaker - "Securities Litigation Seminar: The Oppression Remedy", Sheraton Eau Claire, Calgary, Alberta, January 13, 2009. Speaker - "Preparation of Environmental Reports", Blakes Seminar - A "How To" Seminar for Environmental Consultants, September 24, 2008.

Ken Mills Office Managing Partner, Calgary Blake, Cassels & Graydon LLP Direct 403-260-9648 Facsimile 403-260-9700 [email protected]

Profile Ken Mills is a Partner in the Litigation & Dispute Resolution Group and the Office Managing Partner in Calgary. His practice involves commercial litigation and alternative dispute resolution, with experience in class action, construction, energy, environmental, intellectual property and insurance matters. In the area of intellectual property litigation, Ken has successfully represented clients in patent infringement, trade-mark, trade secrets and copyright cases. He has resolved one of the largest and most complex intellectual property claims involving disputed technology in the automatic welding and construction of large diameter pipelines. Ken was also successful as counsel on a leading Court of Appeal decision on the issue of waiver and abandonment of privileged communications. His practice includes advising clients on issues involving directors and officers liability, product liability and insurance concerns. Ken has acted and currently acts on some of the most significant class/representative action litigation in Alberta. On construction matters, Ken was lead counsel on issues concerning the fire rebuild of a portion of an oil sands plant. He also acted as counsel on issues arising from construction defects in a multi-storey downtown office tower. He has successfully taken to trial insolvency issues relating to building construction.

Ken has appeared before all levels of the Alberta courts, and the Federal Court. His presentations in the legal community include Responding to the Injunction Application and Problems with Privilege for In-House Counsel. Ken also has considerable experience in the area of injunctive relief, including handling a number of such claims in the pipeline and energy industry and successfully dealing with environmental regulatory and civil proceedings, patent infringement, trade secrets and trade knowledge claims.

Ken is an instructor at the chambers advocacy section of the Alberta bar admission course. He is a leader with United Way and has volunteered his time in several charitable and community causes over the years. Professional Appearances Co-presenter - "The Role of Corporate Counsel in Protecting Privilege", CCCA/Lex Mundi Fall Training Camp for In House Counsel, Petroleum Club, Calgary, Alberta, November 9, 2009.

Co-presenter - "In-House Counsel Maintaining Privilege", The Network of Trial Law Firms 2009 Litigation Management Supercourse, Laguna, California, November 5, 2009.

Education Admitted to the Alberta Bar - 1985 LL.B., Dalhousie University - 1984 B.A. (Hon.), University of Calgary - 1980

Christopher Petrucci Associate, Calgary Office Blake, Cassels & Graydon LLPDirect 403-260-9668 Facsimile 403-260-9700 [email protected]

Profile

Chris Petrucci is an Associate in the Litigation & Dispute Resolution Group. He represents clients in corporate/commercial litigation matters across various industries, such as oil and gas, agriculture, construction, insurance, and real estate. Chris is also a member of the Construction, Insurance, and Securities Litigation Groups at Blakes and practises in the area of product liability. He further specializes in obtaining prejudgment relief for clients, including interim injunctions and attachment orders.

Chris has appeared as counsel before the Provincial Court of Alberta, the Alberta Court of Queen's Bench and the Alberta Court of Appeal. In addition to litigating matters before the courts, he has also successfully represented clients in alternative form of dispute resolution, such as mediation and arbitration.

Chris obtained his business degree with distinction from the University of Victoria and then his law degree with distinction from the University of Alberta. Chris has also completed the Intensive Trial Advocacy Workshop at Osgoode Hall Law School. He was called to the bar in 2007. Chris regularly volunteers for Calgary Legal Guidance.

Recent matters which Chris has been involved with include:

• Obtaining one of the highest security for costs orders in Alberta in connection with a large construction lawsuit

• Recovering investment funds used in Ponzi schemes and other fraudulent transactions • Obtaining extraordinary prejudgment relief, including an interim injunction in a landlord/tenant dispute

and attachment orders in a fraud action • Successfully defending an interim injunction application in connection with a real estate development • Oil and gas litigation where he acted for an oil and gas company at trial involving a contractual dispute

for C$100-million • Various corporate litigation involving shareholder disputes and share purchase agreements • A commercial arbitration where he acted for insurers regarding a claim by the insured for C$200-million • General commercial litigation and trial of an action to recover compensation in connection with a failed

business combination

Publications Co-author - "Limitation of Liability Clauses: Recent Developments", The Negotiator, pp. 14-15, June 2010.

Professional Appearances

Speaker - " Injunctions and Special Applications", Blakes Inhouse Counsel Seminar, May 2010.

Education Admitted to the Alberta Bar - 2007 B.Comm. (with Distinction), University of Victoria - 2003 LL.B. (with Distinction), University of Alberta - 2006

Courtney Kachur Associate, Calgary Office Blake, Cassels & Graydon LLPDirect 403-260-9623 Facsimile 403-260-9700 [email protected]

Profile

Courtney Kachur is an Associate in the Litigation & Dispute Resolution Group. She is also a member of the Construction Group.

Courtney joined Blakes initially in 2007 as a summer student and returned to the Firm in 2008 after graduating from the University of Saskatchewan's College of Law with distinction. Prior to attending law school, she obtained a bachelor of arts in political science from the University of Calgary.

Selected Recent Experience

• Various disputes relating to the Alberta Builders' Lien Act • Civil proceedings and settlement for both plaintiffs and defendants seeking the resolution of various

unpaid debts or breaches of contract in the oil and gas industry • Litigation of general commercial disputes, including matters arising from equipment financing,

landlord/tenant disputes, insurance claims and construction matters • Advising clients on matters relating to the enforcement of domestic and foreign judgments

Professional Memberships and Volunteer Work

• Treasurer, Southern Alberta Construction Law Section, Canadian Bar Association • Member, Calgary Bar Association • Volunteer Lawyer, University of Calgary Student Legal Assistance

Publications Author - "Alberta Master Requires True Cost Estimate and Reaffirms Need for Appropriate Security in Builders’ Lien Applications", Blakes Bulletin on Construction, April 2011. Co-authors - "Ontario Court of Appeal Reinforces Integrity of Tender Process and Prohibition Against Improper

Bid Repair in Maystar Decision", Blakes Bulletin on Litigation/Construction, November, 2009. Education Admitted to the Alberta Bar - 2009 LL.B. (with Distinction), University of Saskatchewan - 2008 B.A. (Political Science), University of Calgary - 2004

LOIS INNES, SVP (CALGARY) Placement Specialist – Surety 30 Years Experience

CURRENT RESPONSIBILITIES As a Senior Vice President within Marsh’s Construction & Surety practice, Lois provides consultation on surety issues and implementation of subcontractor default strategies. Lois will provide surety program placement, and more importantly, strategic leadership related to surety. She brings extensive experience and visibility into the surety market.

EXPERIENCE Lois has 30 years of Surety broking experience, including 15 years at Marsh where she has held the positions of Surety Manager and Western Region Surety Practice Leader. Lois successfully developed and implemented Canada’s only owner-controlled surety program for a $4 Billion project. Lois has been involved in numerous presentations to Owners to develop best-in-class business practices for surety projects and has been involved in broking numerous large construction projects in Canada and the United States.

AFFILIATIONS • Western Regional Chair for the Surety Association of Canada

• Construction Owners Association of Alberta, Member

• Presented with the President’s Award from the Surety Association of Canada for exemplary service to the surety industry

Construction Dispute Resolution Seminar Series · index construction dispute resolution seminar series bonding on the construction project thursday, may 10, 2012 tab 1. presentation:

Documents