Alberta Court Of Appeal Upholds Summary Judgment On Invoices Based On Pay First, Audit Later Provision

In a previous post, BLG blogged about SemCAMS ULC v Blaze Energy Ltd. 2015 ABQB 218 ("SemCAMS") where the Alberta Court of Queen's Bench granted summary judgment under a "pay first, audit later" clause. In that case, the Court of Queen's Bench noted that SemCAMS ULC needed "to be able to rely on a reliable cash flow." Although, in the usual case, a party seeking payment would not be able to get summary judgment where the amounts owing were in dispute, the parties' agreement to allocate the risk meant Blaze might pay amounts it didn't actually owe, and that SemCAMS could get summary judgment.

In a brief decision, the Alberta Court of Appeal recently upheld Justice Strekaf's decision in SemCAMS. The Court of Appeal held that Justice Strekaf's decision in SemCAMS was based on a reasonable interpretation of the agreements in issue and business efficacy considerations which supported that interpretation. With no error in Justice Strekaf's decision, the Court of