B.C. Court of Appeal Reinforces Key Lessons for Managing Construction Delay Claims

CIMIC Morningstar Investments Ltd. v. Chandos Construction Ltd., 2026 BCCA 2

In CIMIC Morningstar Investments Ltd. v. Chandos Construction Ltd., 2026 BCCA 2, the British Columbia Court of Appeal refused leave to appeal an arbitral award arising from a delayed fixed-price construction project. The decision is a strong reaffirmation of the limited scope of appeals under British Columbia’s Arbitration Act, SBC 2020, c. 2, and provides practical guidance for parties involved in construction delay claims.

The decision is an important reminder that delay disputes are won or lost long before any hearing, through the day-to-day administration of the project. The case reinforces the narrow scope of appeals under British Columbia’s Arbitration Act and highlights several recurring themes in construction delay claims. For parties delivering or managing complex projects, the judgment underscores the need for disciplined record‑keeping, clear communication, and proactive delay management.

Background of the dispute

The dispute arose from a delayed CCDC‑2 fixed‑price project in which the arbitrator found that CIMIC’s ongoing design changes and late approvals materially contributed to delay. The arbitrator awarded Chandos more than CAD $6.47 million in damages, interest, and costs. CIMIC advanced four grounds of appeal, all framed as alleged errors of law. The Court held that none raised a true question of law and therefore none could support an appeal under s. 59 of the Arbitration Act (SBC 2020, c. 2).

Key takeaways

The decision offers several practical reminders for construction delay disputes.

First, the Court affirmed that notice provisions in construction contracts, even those imposing strict written timelines, are interpreted in context. CIMIC argued that GC 6.5.4 required strict written notice within ten working days of each delay event, and that Chandos had failed to comply. The arbitrator, however, reviewed the extensive contemporaneous record, including email correspondence, meeting notes, verbal warnings, and rolling schedule updates. She concluded that CIMIC had been fully aware of design‑related issues and their effect on the critical path, and that Chandos provided formal written notice once the float had been exhausted. The Court held that CIMIC’s challenge was nothing more than a disagreement with factual findings and therefore not appealable. The decision underscores that notice is assessed substantively and contextually.

Second, the Court endorsed the arbitrator’s conclusion that “zero‑day” change orders were not determinative in this case. Throughout the project, CIMIC’s consultant used a standard change‑order template that routinely recorded zero days of delay. Chandos led evidence that CIMIC directed it not to include time impacts in change orders because the parties would deal with schedule issues through a comprehensive delay claim. The arbitrator accepted that evidence and found that CIMIC was estopped from relying on the “zero‑day” entries to defeat the global claim. The Court confirmed that this was a fact‑driven application of promissory estoppel, not a question of law.

Third, the Court confirmed that the prevention principle remains a powerful doctrine in construction law. CIMIC sought to rely on the liquidated damages clause after the contract’s completion date had passed. The arbitrator found that CIMIC’s extensive design changes and refusal to grant appropriate extensions had “put time at large,” meaning CIMIC could not enforce the liquidated damages provision. On appeal, CIMIC argued that the prevention principle should not apply in the context of a CCDC‑2 contract because the contract contains an explicit mechanism for time extensions. The Court rejected this argument, noting that the arbitrator’s findings were factual and therefore immune from appeal.

Fourth, the decision reiterates how narrow appeals from arbitration remain. CIMIC’s proposed grounds all turned on disagreements with the arbitrator’s factual determinations, including her assessment of expert evidence regarding the critical path and the causes of delay. The Court stressed that arbitration awards on construction delay issues are heavily factual and that attempts to re‑litigate those findings cannot be reframed as “questions of law.”

Concluding thoughts

In the result, the Court dismissed the application for leave to appeal, finding no appealable error and no basis under the s. 59 of the Arbitration Act to justify intervention.

Cases like this underscore how essential it is to manage projects and claims as they unfold, not years later when disputes arise. Timely notice, clear documentation, and consistent communication can make the difference between a defensible position and an unfavourable award. If you need guidance on navigating delay issues, managing risk under CCDC‑2 contracts, or strengthening your project administration practices, please contact Andrés Duran or Karina Alibhai.