RC117 MarApr 2025 - Magazine - Page 29
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“In Walsh v. TTC—arising out of the construction of the
Pioneer Village subway station—advancing a flow-through claim
without the direct involvement of a subcontractor proved fatal to
both the general contractor and some of its subcontractors. ”
the subcontractor’s claim outright in respect of only
those losses for which the general contractor may be
solely responsible. Also, the general contractor could
choose not to settle and defend the subcontractor’s claim
while bringing a third-party claim against the owner for
contribution and/or indemnity in respect of any losses
that the general contractor believes is the responsibility of
the owner.
One challenge with the 昀椀rst approach is that if the
general contractor attributes fault to the owner for any
or all of the losses advanced by the subcontractor, then
the general contractor may not be willing to settle with
the subcontractor in advance of any settlement with the
owner.
The second approach is burdened by the fact that the
general contractor would face litigation on two fronts—as
RENEWCANADA.NET
a defendant against the subcontractor and as a plainti昀昀
against the owner. This approach can be costly and timeconsuming. For example, the general contractor may be
required to attend additional examinations for discovery
and prepare additional court documents if it 昀椀nds itself
advancing complex third party claims against the owner.
As a result, the 昀氀ow-through claim remains an
appealing option for general contractors facing claims
from subcontractors.
Recent treatment of flow-through claims
Until recently, there have been few decisions by Canadian
courts in respect of subcontractor 昀氀ow-through claims.
However, the recent decision in Walsh Construction v. Toronto Transit Commission (“Walsh v. TTC”) provides some illustrative guidance with regards to advancing such claims.
MARCH/APRIL 2025 – RENEW CANADA 29
