IN THE MATTER OF - BDO Canada€¦ · Fletcher Construction Co. v. 1707583 Ontario Inc., 2009 CarswellOnt 2805 (Ont. S.C.J.) ['Fletcher1'] at para. 26., Schedule A, Tab 13 21 Lido

Court File No. CV-17-0242-00

ONTARIOSUPERIOR COURT OF JUSTICE

IN THE MATTER OF the Construction Lien Act, R.S.O. 1990, c. C.30, as amended

BETWEEN:

KEN TULLOCH CONSTRUCTION LTD.Plaintiff

and

1684567 ONTARIO INC.,ASTORIA ORGANIC MATTERS LTD,

ASTORIA ORGANIC MATTERS CANADA LP,BANK OF MONTREAL,

TRENVAL BUSINESS DEVELOPMENT CORPORATION,CASA-DEA FINANCE LIMITED and

BUSINESS DEVELOPMENT BANK OF CANADADefendants

STATEMENT OF LAW AND BRIEF OF AUTHORITIES

Date: November 29, 2017 AIRD & BERLIS LLPBarristers and Solicitors Brookfield Place Suite 1800, Box 754 18T Bay Street Toronto, Ontario M5J 2T9

Courtney Raphael - LSUC# 51134C

Tel 416.863.1500 Fax 416.863.1515 E-mail: [email protected]

Lawyers for BDO Canada Limited, in its capacity as the court appointed Receiver of Astoria Organic Matters Ltd. and Astoria Organic Matters Canada LP

TO: KENNALEY CONSTRUCTION LAWFirst Canadian PlaceSuite 5700 - 100 King Street WestToronto, Ontario M5X 1C7

Robert J. Kennaley

Tel: 416.886.7310Fax: 416.700.8185Email: [email protected]

Lawyers for Ken Tulloch Construction Ltd.

AND DENTONSTO: 77 King Street West, Suite 400

Toronto, ON M5K 0A1

Karen GroulxTel: 416.863.4697Email: [email protected]

Sara-Ann Van AllenTel: 416.863.4402Email: [email protected]

Lawyers for 1684567 Ontario Inc.

AND FOGLER, RUBINOFF LLPTO: TD Centre, North Tower., 3000-77

King St. W.PO Box 95, Stn. Toronto Dorn. Toronto, Ontario M5K 1G8

Scott R. Venton Ross MacDougall

Tel: 416.864.9700Fax: 416.941.8852Email:[email protected]

Lawyers for Business Development Bank of Canada

2

AND GOWLING WLG (CANADA) LLPTO: Suite 1600, 1 First Canadian Place

100 King Street West Toronto, Ontario M5X 1G6

Neil Abbott

Tel: 416-862-4376Fax: 416-863-3476E-mail: [email protected]

Lawyers for Bank of Montreal

AND Sioui Mitts LawTO: Barristers, Solicitors & Notaries

21 Quinte Street, P.O. Box 397 Trenton, ON K8V 5R6

Stephen M. Sioui

Tel: 613-965-6430Fax: 613-965-6400E-mail: [email protected]

Lawyers for Trenval Business Development Corporation

AND CASA-DEA FINANCE LIMITEDTO: 150 North Murray Street

Trenton, ON K8V 6R8

Darrell Edgett

Email: [email protected]

3

Court File No. CV-17-0242-00

ONTARIOSUPERIOR COURT OF JUSTICE

IN THE MATTER OF the Construction Lien Act, R.S.O. 1990, c. C.30, as amended

BETWEEN:

KEN TULLOCH CONSTRUCTION LTD.Plaintiff

and

1684567 ONTARIO INC.,ASTORIA ORGANIC MATTERS LTD,

ASTORIA ORGANIC MATTERS CANADA LP,BANK OF MONTREAL,

TRENVAL BUSINESS DEVELOPMENT CORPORATION,CASA-DEA FINANCE LIMITED and

BUSINESS DEVELOPMENT BANK OF CANADADefendants

STATEMENT OF LAW AND BRIEF OF AUTHORITIES

1. The Construction Lien Act1 (the “CLA” or the “Act”) is remedial legislation. It grants

extraordinary statutory rights and remedies that would not otherwise exist. As such, it must be

strictly construed.2

The Issue

2. The Court must determine the timeliness of the claimant’s lien; what considerations should

the Court take into account when determining whether the claim for lien was preserved in

accordance with section 34 of the CLA?

1 R.S.O. 1990, c. C.302 Clarkway Construction Ltd. v. 2247129 Ontario Inc. 2016 ONSC 3991 at para. 9, Schedule A, Tab 1

Timeliness of Liens

Expiry of Liens

3. The expiry of liens is governed by section 31 of the CLA, which states that unless

preserved under section 34 of the Act, the liens arising from the supply of services or materials to

an improvement expire as provided in the section.

4. Pursuant to section 31 (2)(a) of the CLA, a contractor’s lien expires at the conclusion of the

forty-five (45) day period (the “Lien Period") next following the occurrence of the earlier of:

(a) the date on which a copy of the certificate or declaration of substantial performance

of the contract is published pursuant to section 32 of the CLA; and

(b) the date the contract is completed or abandoned.3 This date of completion

corresponds to original work outlined in the contract, not repair work or rectification

of deficiencies.4

Preservation of Liens

5. The preservation of liens is governed by section 34 of the CLA.

6. Pursuant to section 34(1 )(a) of the CLA, a lien that attaches to the premises may be

preserved by registration of a claim for lien at any time before the lien expires (i.e. before the end

of the Lien Period).

7. Strict compliance with the terms of the CLA is required for the lien to be properly preserved

and perfected, subject to section 6 of the CLA.5

3 CLA s. 31 (2)(a), Schedule B4 Lido Cabinet Ltd, v. Joy 2012 ONSC 5058 [“Lido”] at para. 64, Schedule A, Tab 25 Dirm Inc. v Dalton Engineering & Construction Ltd. 2004 CarswellOnt 3479 at para. 38, Schedule A, Tab 3

2

8. Section 6 of the CLA states that no certificate, declaration or claim for lien is invalidated

by reason only of a failure to comply strictly with subsection 32(2) or (5), subsection 33(1) or

subsection 34(5), unless in the opinion of the court a person has been prejudiced thereby, and

then only to the extent of the prejudice suffered.6 The test for this is one of degree.7

9. In order to preserve a lien, a claim for lien must be registered in accordance with section

34(5), which states that the claim for lien must set out the name and address of the owner and

the premises against which the lien claim is preserved and the name and address of the person

for whom the services and materials were supplied.

10. A lien is perfected by registering a certificate of action within ninety (90) days after the

date the contract is complete or abandoned. The lien rights expire if a contractor fails to meet

these limitation periods.8

Expiry of the Lien

The Lien is not extended by Warranty Work

11. It is trite law that repair or deficiency work (“Warranty Work”) is not included in the last

provision of services or the completion of a contract for services, and does not serve to extend

the Lien Period.9

12. Further, if a trivial amount of work is performed after a lien has expired, then the lien rights

also do not extend.10

6 CLA s. 6, Schedule B7 Govan Brown & Associates Ltd. v. Equinox 199 Bay Street Co. 2014 ONSC 3924 at para. 28, 5, Schedule A, Tab 48 Lido, supra at para. 60, Schedule A, Tab 29 Micon Interiors General Contractors Inc. v. D'Abbondanza Enterprises Inc. 2008 CarswellOnt 6156 (Ont. S.C.J.), [2008] O.J. No. 4132 at para 49, Schedule A, Tab 5; Applewood Glass & Mirror Inc. v. Baun Construction Inc., 2009 CarswellOnt 7122 (Ont. S.C.J.) [ Applewood"] at para. 11, Schedule A, Tab 610 Diamond Drywall Contracting Inc. v. Ikram 2016 ONSC 5411 at para. 12, Schedule A, Tab 7

3

13. This is expanded upon in Toronto Zenith Contracting Ltd. v. Fermar Paving Ltd,10 where

the court held that the following, inter alia, do not generally constitute a lienable supply of services

and do not extend the forty-five (45) day limitation period in which a lien must be preserved:

(a) repair work;

(b) deficiency work;

(c) off-site and/or project management work;

(d) work that is not directly incorporated into the improvement; and

(e) work that is not invoiced for.11

14. Administrative overhead and office costs have been held not to be lienable.12

15. Further, a lien cannot be extended by doing work on a separate contract. The claimant

cannot claim that the lien is extended because of work being done at the property pursuant to a

separate contract.13

16. In addition, a trivial amount of work performed after the completion of a contract will not

serve to extend the time within which a claim for lien must be registered.14

10 Toronto Zenith Contracting Ltd. v. Fermar Paving Ltd 2016 ONSC 4696, 2016 CarswellOnt 11566 ["Zenith"], Schedule A, Tab 811 Zenith, supra, at para. 27, Schedule A, Tab 8; 697470 Ontario Ltd. v. Presidential Developments Ltd., 1989 CarswellOnt 698 (Ont. Div. Ct.), [1989] O.J. No. 1111 at paras. 1 and 8, Schedule A, Tab 912 Selectra Inc. v. Penetanguishene (Town), 2016 ONSC 2293, 2016 CarswellOnt 5132 at paras. 14 and 23, Schedule A, Tab 1013 Landac Developments Ltd. v. Kerry T. Howe Ltd. 1990 CarswellOnt 653 at para. 10, Schedule A, Tab 1114 Applewood, supra, at paras. 11-12, Schedule A, Tab 6

4

17. The courts have stated that "[a]n attempt to bootstrap lien rights after their expiry by

additional work will not extend the time within which the claim for lien must be registered failing

which it is not preserved.”16

Sections 45 and 47 of the CLA and Summary Judgment

18. Pursuant to section 45 of the CLA, where a lien has not been preserved within the time

allowed for doing so, a person may bring a motion for a declaration that the lien has expired and

an order that the registration of the claim for lien be vacated.16

19. The evidentiary burden to prove compliance with the statutory timelines of preservation

and perfection under the CLA is on the lien claimant, on a balance of probabilities. Accordingly,

the lien claimant must adduce sufficient evidence to establish that the lien claimant was registered

in time.17

20. A motion under section 45 is akin to summary judgment and, as such, it is not sufficient

for the parties to rely upon allegations in the pleadings; affidavit or other evidence must be

adduced.18

21. Pursuant to section 47 of the CLA, the court retains a general power to order the discharge

of liens, the vacation of claims for lien and/or certificates of action, and the dismissal of actions,

upon any proper ground.19

15 Applewood, supra, paras. 10, 12, Schedule A, Tab 616 CLA s. 45, Schedule B17 Applewood at para. 8., Schedule A, Tab 618 Demik Construction Ltd. v. Royal Crest Lifecare Group Inc. 1994 CarswellOnt 955 at para. 6, Schedule A, Tab 1219 CLA s. 47, Schedule B

5

22. The courts have confirmed that section 47 of the CLA is also akin to a motion for summary

judgment, in the sense that a party must lead their best evidence.20

23. When adjudicating disputes, the court must do its best to apply principles of

proportionality.21 The court is therefore entitled to presume that the lien claimant has led its best

evidence in response to motions under sections 45 and 47 of the CLA.

24. In order to defeat the motion, the lien claimant must establish that there is a genuine issue

requiring a trial as to whether the lien claimant’s lien has expired.22

25. The test is whether a trial is necessary or whether the court can make a finding of fact that

allows a fair and just determination of the motion to be held.23

20 Diamond Drywall Contracting Inc. v. Ikram 2016 ONSC 5411 at para. 18, Schedule A, Tab 7; Brian T. Fletcher Construction Co. v. 1707583 Ontario Inc., 2009 CarswellOnt 2805 (Ont. S.C.J.) ['Fletcher1'] at para. 26., Schedule A, Tab 1321 Lido Cabinet Ltd. v. Joy 2012 ONSC 5058 at para. 3, Schedule A, Tab 222 Fletcher, supra at para. 26, Schedule A, Tab 1323 Diamond Drywall Contracting Inc. v. Ikram 2016 ONSC 5411 at paras. 3 and 5, Schedule A, Tab 7

6

ORDER REQUESTED

26. The Receiver respectfully requests that this Court grant advice and directions regarding

whether the claim for lien registered by the Plaintiff as referenced in the Receiver’s Notice of

Motion dated September 27, 2017 has been preserved in accordance with section 34 of the CLA.

ALL OF WHICH IS RESPECTFULLY SUBMITTED

Date: November 29, 2017

Lawyers for BDO Canada Limited, in its capacity as the court appointed Receiver of Astoria Organic Matters Ltd. and Astoria Organic Matters Canada LP

7

TAB “A”

SCHEDULE A

List of Authorities

1. Clarkway Construction Ltd. v. 2247129 Ontario Inc. 2016 ONSC 3991

2. Lido Cabinet Ltd. v. Joy 2012 ONSC 5058

3. Dirm Inc. v Dalton Engineering & Construction Ltd. 2004 CarswellOnt 3479

4. Govan Brown & Associates Ltd. v. Equinox 199 Bay Street Co. 2014 ONSC 3924

5. Micon Interiors General Contractors Inc. v. D'Abbondanza Enterprises Inc. 2008CarswellOnt 6156 (Ont. S.C.J.), [2008] O.J. No. 4132

6. Applewood Glass & Mirror Inc. v. Baun Construction Inc., 2009 CarswellOnt 7122 (Ont. S.C.J.)

7. Diamond Drywall Contracting Inc. v. ikram 2016 ONSC 5411

8. Toronto Zenith Contracting Ltd. v. Fermar Paving Ltd., 2016 ONSC 4696, 2016CarswellOnt 11566

9. 697470 Ontario Ltd. v. Presidential Developments Ltd., 1989 CarswellOnt 698 (Ont. Div. Ct.), [1989] O.J. No. 1111

10. Selectra Inc. v. Penetanguishene (Town), 2016 ONSC 2293, 2016 CarswellOnt 5132

11. Landac Developments Ltd. v. Kerry T. Howe Ltd. 1990 CarswellOnt 653

12. Demik Construction Ltd. v. Royal Crest Lifecare Group Inc. 1994 CarswellOnt 955

13. Brian T. Fletcher Construction Co. v. 1707583 Ontario Inc., 2009 CarswellOnt 2805 (Ont. S.C.J.)

8

TAB “1”

P<JUQ ^

2016 ONSC 3991 Ontario Superior Court of Justice

Clarkway Construction Ltd. v. 2247129 Ontario Inc.

2016 CarsweilOnt 9626, 2016 ONSC 3991, 267 A.C.W.S. (3d) 525

Clarkway Construction Ltd., Lien Claimant v 2247129 Ontario Inc., Owner

Master C. Albert

Judgment: June 15, 2016 Docket: CV-16-551851

Clarkway Construction Ltd. v. 2247129 Ontario Inc., 2016 ONSC 3991, 2016...

2016 ONSC 3991,2016 CarsweilOnt 9626,267 A.C.W.S. (3d) 525 : : ' ""

Counsel: K.A. Dhirani, for Owner H. Dupras, for Lien Claimant

Subject: Contracts; Corporate and Commercial; Insolvency

MOTION by owner for declaration that construction lien claim had expired.

Master C. Albert.

The motion

1 The owner, 2247129 Ontario Inc. ("224") asks the court to declare the lien claim of Clarkway Construction Ltd. ("Clarkway") expired.

2 The 45 day time limit within which a subcontractor must preserve a lien claim begins to run on the date of last supply of services or materials. The issue on this motion is whether the date of last day of Clarkway, a subcontractor to the general contractor 1892458 Ontario Inc. ("189"), can extend beyond the date on which the contract as between 224 and 189 ended by abandonment or termination.

Background:

3 224 contracted with 189 to build a gas and service station on 224's property at 2201 McCowan Road, Toronto. 189 subcontracted, in turn, with Clarkway to supply certain services and install certain equipment, including a water storage tank.

4 Work commenced in 2015 and continued until November 30,2015 when 189 stopped supplying services and materials to 224. 189 abandoned its contract with 224 on January 25, 2016 by letter delivered to 224. It is clear that as of January 25, 2016 189 had ceased to supply services and materials to 224 and had no intention of returning to the project.

5 On February 9, 2016 224 accepted 189's termination of the general contract and instructed 189 to remove all of its equipment from the site. A direction by an owner to its general contractor that it must remove all of its equipment from the construction site includes a direction by implication that the general contractor must in turn direct its subcontractors to remove all of their equipment from the site.

6 Clarkway's rented water tank remained on site and on April 14, 2016 the owner, 224, wrote directly to Clarkway asking it to remove the water tank.

Siext:. CANADA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.


2016 ONSC 3991, 2016 CarswellOnt 9626, 267 A.C.W.S. (3d) 525 : :

7 On April 15, 2016 Clarkway registered a construction lien claiming $72,177.58 as instrument AT4194763. In the lien claim Clarkway identifies 224 as owner and 189 as the person to whom Clarkway supplied services and materials from January 12, 2015 to April 15, 2016. Clarkway describes the services and materials supplied as "delivery and rental of 6,900 gallon poly tank for water storage on site."

8 Clarkway removed the water tank from the site over a two-day period beginning April 28, 2016. It is well settled law that removal of equipment does not reinstate lien rights that have expired or extend the period within which a subcontractor must preserve a lien claim.

Analysis

9 The Construction Lien Act, R.S.0.1990, c.C.30 (the "Act") is remedial legislation that grants extraordinary statutory rights and remedies that would not otherwise exist. It must be strictly construed.

10 The scheme of the Act sets up a pyramid or ladder structure for contractors and subcontractors to recover payment for services and materials supplied to improve a property. The theory underlying the Act is that supplying services and materials to improve land is akin to advancing credit. Once the services or materials have been supplied the owner enjoys the benefit of what was supplied. Therefore the supplier of the services and materials is entitled to security in the form of a lien claim for having advanced credit to the owner. The Act creates a ladder or pyramid, with the owner at the top, the general contractor under the owner and subcontractors under the general contractor. The lien claim and holdback rights and obligations flow up the ladder or pyramid to the owner.

11 However, in order for a contractor to avail himself or herself of the extraordinary remedies provided for in the Act the lien claimant must comply strictly with the technical requirements of the Act, with relief available only for minor

irregularities1 . Failure to strictly comply with the requirements of the Act results in no access to holdback and confines the supplier of services and materials to a contractual remedy against the party with whom they contracted directly.

12 Section 1 provides definitions for "owner", "contractor" and "subcontractor". I find that 224 is an owner as defined by the Act, having an ownership interest in the lands and having requested that 189 supply construction services and materials to improve 224's property. Similarly, 189 is a contractor, having contracted directly with 224 to supply services and materials to improve the property. Clarkway is a subcontractor as defined by the Act, not having contracted directly with the owner but having supplied services or materials to the improvement under a contract with 189 as contractor.

13 The Act prescribes strict time limits within which a claim for lien must be preserved by registering a claim for lien against the property. The significance of a claim for lien in this case is that Clarkway's claim against 224 is solely against the holdback that 224 is required to retain as owner of the property. If Clarkway failed to register its claim for lien prior to the expiry of its lien rights then it has no claim against 224 under the Act.

14 Section 31(3) sets out the time limits for a lien claimant other than a direct contractor to preserve a lien claim. In this case there was no certificate of substantial performance so subsection 31 (3)(b)(i) applies: the lien claim expires 45 days after the date of last supply of services or materials to the improvement.

15 The issue in this case is whether a subcontractor's lien rights against an owner can continue to accrue after the contract between the owner and the general contractor ends. Clarkway argues that because the owner did not give Clarkway notice of termination of the 189 contract then Clarkway's lien rights against the owner continued at least until April 14, 2016 when 224 instructed Clarkway to remove the water tank.

16 Clarkway argues that a case of equipment rental is different from a case of the supply of labour because the equipment remains on site and the supplier of the rental equipment may not have any knowledge that the main contract has ended.

exf CANADA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 2

17 I reject this argument. Clarkway has no direct contractual relationship with 224. It supplied rental equipment to 189 and had a responsibility to keep itself informed as to the status of the project to which it had supplied the equipment, particularly in view of the arrears accruing monthly with the rental payments for the water tank falling further and further into arrears. When asked questions on cross-examination about its knowledge of the status of the project Clarkway's representative refused to answer relevant questions. I draw an adverse inference from these refusals.

18 Justice DiTomaso in 1442968 Ontario Ltd. v. Houston Engineering & Drafting Inc. determined that the contract of a subcontractor ends when the contract as between the owner and the general contractor ends. I find that the reasoning in that case applies to the present case, where even though the lien claim in the short description refers to rental of tanks, the invoices underlying Clarkway's claim for lien show that the amounts claimed include services supplied over and above rental of equipment. As a matter of law I find that the lien rights of Clarkway as subcontractor do not extend beyond the date on which the general contract between 224 and 189 came to an end, such date being, at the latest, February 9,2016.

19 Similarly, in U.A. Local Union 853 Ontario Sprinkler Industry Benefit Trust Fund v. Metro Sprinkler & Fire System

Co. Master Clark found that the time for union labourers to preserve a lien claim started to run when the labourers' employer abandoned the contract. By analogy, the time for a subcontractor to preserve a lien claim starts to run when the general contractor with whom the subcontractor had contracted abandons or terminates its contract with the owner.

20 Clarkway argues that the subcontractors "preservation clock" should not begin to run until the potential lien

claimant has been given notice, relying on a statement made by Duncan Glaholt in his annotated Construction Lien Act4 that the time should run only from a date that can be readily ascertained by that claimant. I agree with Mr. Glaholt's statement but reject Clarkway's application of it: the date of 189's abandonment of the general contract, namely January 25, 2016 or at the latest February 9, 2016, was readily ascertainable had Clarkway made the appropriate inquiries on an ongoing basis, particularly in view of the ongoing and increasing rental arrears.

Conclusion

21 Giving Clarkway the benefit of the doubt, the last possible date on which the preservation clock could start to run was February 9, 2016. The last date to preserve a claim for lien was March 25, 2016. Clarkway registered its claim for lien on April 15, 2016.

22 For the reasons given I find that the lien claim registered by Clarkway has expired, having been registered more than 45 days after February 9, 2016.

23 It is appropriate for costs to follow the event, calculated on a partial indemnity scale. Considering the relevant factors as set out in section 86 of the Act and rule 57.01, a fair and reasonable quantum for costs in this case is $7,000.00 for fees inclusive of HST plus $2,878.77 for disbursements for a total costs award of $9,878.77 payable by Clarkway Construction Ltd. to 2247129 Ontario Inc.

Motion granted.


2016 ONSC 3991,2016 CarswellOnt 9626,267 A.C.W.S. (3d) 525 ‘ — —

Footnotes

1 Section 6 of the Act

2 [2008] O.J. No. 1460, 71 C.L.R. (3d) 165 (Ont. S.C.J.)

3 [1995] O J. No. 3200 (Ont. Master)

4 Carswell, commentary following section 31

it. CANADA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.


2016 ONSC 3991,2016 CarswellOnt 9626, 267 A.C.W.S. (3d) 525

End of Document Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). Ali rightsreserved.

tiwNext..CANADA Copyright @> Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

TAB “2”

Lido Cabinet Ltd. v. Joy, 2012 ONSC 5058, 2012 CarswellOnt 11114

2012 ONSC 5058, 2012 CarswellOnt 11114, 17 C.L.R. (4th) 158, 220 A.C.W.S. (3d) 320

PoJQS- fcOr


Lido Cabinet Ltd. v. Joy

2012 CarswellOnt 11114, 2012 ONSC 5058,17 C.L.R. (4th) 158, 220 A.C.W.S. (3d) 320

Lido Cabinet Limited, Plaintiff (defendant by counterclaim) and Stefania Joy and David Joy, Defendants (plaintiffs by counterclaim)

Master C. Albert

Heard: September 5, 2012 Judgment: September 6, 2012

Docket: CV-10-417326

Counsel: F. Battiston, for Plaintiff / Defendant by counterclaim M. Hassell, for Defendants / Plaintiffs by counterclaim

Subject: Contracts; Corporate and Commercial

ACTION by contractor for unpaid balance of contract price; COUNTERCLAIM by owner for deficiencies in design and installation.

Master C. Albert:

1 Lido Cabinet Limited ("Lido") designed and installed custom kitchen cabinetry in David and Stefania Joy's Rosedale home. Lido claims $11,164.75 as the unpaid balance of the contract price. The Joys counterclaim for $25,000.00 for deficiencies in the design and installation of their new kitchen.

2 The issues are:

a) What is the balance owing on the contract?

b) Are the Joys entitled to set-off and recover damages for deficiencies?

c) Did Lido register its construction lien in time?

3 The reference rule and the Construction Lien Act provides a framework for the court to adopt as summary a procedure as is suitable to meet the needs of the case, taking into account the amounts in issue. In other words, the court must do its best to apply principles of proportionality to the process of adjudicating disputes. For that reason the trial was conducted as a summary trial with evidence in chief by affidavit and time limited cross-examination.

4 Each side submitted affidavit evidence of one witness: Silvana Bruno, general manager for Lido, and David Joy, spouse of the homeowner. They were cross-examined at trial.

5 Disputes such as this one are unfortunate. Whereas the parties may have been able to find a mutually acceptable solution had they communicated effectively in late 2010, the passage of time has only caused them to dig in their heels further and become more entrenched in their positions. This is particularly so on the part of David Joy, who gave his testimony in a self-righteous manner, answering questions put to him in cross-examination with non-responsive speeches on topics of greater interest to him, thereby undermining his credibility.

‘leXti-CANABA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

Lido Cabinet Ltd. v. Joy, 2012 ONSC 5058, 2012 CarsweilOnt 11114


6 Ms Bruno's evidence on cross-examination was delivered in a straightforward and direct manner. She answered the questions asked and admitted facts that were not necessarily helpful to her case. I found her to be a credible witness.

a) Balance owing on the contract

7 The parties entered into a written contract on or about July 16,2010 for $16,000.00 plus taxes for a total of $18,080. For this price Lido was to supply and install kitchen cabinetry as per specifications and drawings. The Joys were to provide their own appliances (new and used from their previous home) and provide the appliance specifications to Lido. The contract did not include a countertop and the Joys contracted directly with a granite supplier for the countertop.

8 The Joys paid Lido a deposit of $7,000.00 but have not paid anything more, leaving a balance owing of $11,080.00 on the contract price, provided Lido performed the contract according to its terms.

9 Lido claims an extra of $75.00 plus tax for a total of $84.75 for an extra door, which they incorrectly described in their invoice as a "door for garberator" but in fact was a front panel for a trash compactor cabinet. Their total claim is for $11,164.75.

10 Lido supplied and installed all of the cabinetry that was required for the kitchen. They also supplied the trash compactor cabinet front.

11 Based on the contract price, the additional trash compactor door, the invoices issued and the deposit paid, I find that the balance owing on the contract is $11,080.00 plus the extra of $84.75 for a total of $11,164.75 payable by the Joys to Lido subject to the Joy's claim for set-off and counterclaim for damages.

b) Deficiencies

12 The Joys listed their complaints about their kitchen cabinetry in the Scott Schedule. They did not notify Lido about their complaints until after installation was complete.

1. Base cabinets ($10,000.00 counterclaim)

13 Symmetrical design was very important to the Joys and Ms Bruno knew this. They had relocated an exterior window so that it would be centered over their new sink. One of the Joys' complaints is that the area of the kitchen cabinetry around the kitchen sink was not perfectly symmetrical and, as a result, all of the base cabinets would have to be removed, redesigned, re-manufactured and reinstalled.

14 The complaint about symmetry is that the lower cabinets to the right and left of the sink are not of the same depth. The dishwasher protrudes out farther than the Joys expected it to. They blame it on poor design, accusing Lido of designing and building cabinet boxes that are too shallow. To the left of the sink is a cabinet box containing two large drawers. To the right of the sink is a dishwasher with drawer-like front panels to be affixed to its door to mirror the drawer fronts on the other side of the sink.

15 In Lido's design plans the dishwasher was supposed to be on the left and the drawers on the right. It was the Joys' decision to relocate it to the other side, without first consulting with Lido. Ms Bruno expressed concern that in doing so there may have been an obstruction preventing the dishwasher from being pushed back to the rear wall of the cabinet box.

16 After installing the dishwasher the Joys did not allow Lido entry to inspect the installation to see whether there were any obstructions (such as plumbing pipes) behind the dishwasher on the side on which it had been installed, preventing it from being pushed back further into the lower cabinet. Mr. Joy's evidence is that there are no plumbing or other pipes or obstructions at the back of the space into which the dishwasher was placed.

duxt CANADA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 2

17 Ms Bruno's response is that the cabinet boxes were built to accommodate the dishwasher specifications that Mr. Joy provided to her. The specifications for the dishwasher show a depth of 21 inches required for the dishwasher "box",

an overall depth of 24 1 Ij inches including the dishwasher door and a depth of 25 1A4 inches including the door and the control panel.

18 The dishwasher specifications that had been provided to Ms Bruno were filed as exhibit 1, tab 30 at trial. Ms Bruno asserts that the dishwasher that the Joys actually installed is not the same dishwasher as the one in the specifications. Mr. Joy's evidence is that the dishwasher installed is the same as the "panel ready" model shown in these specifications. I accept and find as a fact that the Joys installed the same dishwasher as the one for which they provided specifications to Lido.

19 The problem with the "as built" cabinetry appears to be one of miscommunication. According to Ms Bruno, cabinetry is always designed in such as way as to hide the box of the dishwasher inside the cabinetry, with the front face of the dishwasher protruding so that when the dishwasher is opened the steam that escapes does not damage the cabinetry. Mr. Joy's position is that the entire dishwasher, including the front panel, should have been recessed below the countertop and set back from the protruding sink so that it does not extend beyond the cabinetry. He had expected that it would be recessed into the cabinetry to the same extent as the drawers are recessed on the other side of the sink, thus providing the symmetry for which they were striving. The contract is silent on the issue and the design does not provide a level of detail sufficient to address the setback of the dishwasher.

20 I find that Ms Bruno is partially at fault for not communicating clearly to the Joys that while the cabinetry would be symmetrical from most perspectives (looking at it directly and from above), it would not be symmetrical for depth if the Joys wanted the sink to be set forward with a recessed drawer bank beside it.

21 However, this absence of clear warning by Ms Bruno is not fatal to Lido's entitlement to payment for their work. There is no evidence that the dishwasher was installed in other than a proper and worker like manner, fit for its purpose. In redirect examination Mr. Joy introduced for the first time that in his household dishes are washed by the housekeeper by hand because the dishwasher is not functioning. If this were so then this very important fact would have been communicated to Lido much earlier than partway through trial. There is no mention in any documents, productions, letters, affidavits or the Scott Schedule that the dishwasher does not function because of its placement. I do not find Mr Joy's statement that the dishwasher is not functioning credible. Given the timing of his statement it discredits his reliability as a witness.

22 Mr. Joy stated repeatedly that he is a builder and developer. If symmetry in the cabinet depth was such a crucial issue for the Joys it ought to have been specified in the contract. It was not. The Joys are not new to renovations, nor are they new to building.

23 The Joys' complaint about the base cabinets also concerns the area adjacent to the Viking range. They claim that the cabinetry must be replaced because the counter is too high and interferes with the burners, posing a fire hazard. They attribute the improper height to the granite countertops, discussed under the next subheading.

24 The next area of complaint regarding the base cabinets concerns the trash compactor cabinet front. The Joys complain that the front panel does not fit properly, again justifying ripping out all of the base cabinetry and having new cabinetry manufactured and installed. My concern over this item is that they failed to mitigate by preventing Lido from returning to effect minor adjustments and repairs, which is standard in cabinetry installation jobs.

25 I find that the Joys have failed to meet the onus of proving that these complaints relating to the base cabinets are significant design and manufacturing flaws for which Lido is responsible. I find that the Joys are not entitled to any setoff or damages for the base cabinets.


2012 ONSC 5058, 2012 CarswellOnt 11114, 17 C.LR. (4th) 158, 220 A.C.W.S. (3d) 320 " ~

NSXt,.-CANADA Copyright & Thomson Reuters Canada Limited or its licensors (excluding individual court documents). Ail rights reserved.


26 Had I found that the Joys are entitled to compensation for the base cabinets I would have found that they had failed to prove damages. The only quantification provided is the evidence of Mr. Joy who deposes that the repair is worth $10,000.00. He arrives at this figure not based on any actual or independent evidence but rather by calculating 60 per cent of the Lido contract price. There is no evidence to support the percentage of the Lido contract that applies to the base cabinets in the area of the sink and dishwasher.

27 In almost two years the Joys have taken no steps to effect the repairs about which they complain. They have not obtained quotes from independent contractors, nor have they undertaken any repairs for which they could provide evidence of payment. I find that the evidence of quantum relied on by the Joys is not reliable.

28 Built into their quantification of damages for this and other items, according to Mr. Joy, is the impact on property value of their Rosedale home. Mr. Joy asserts that the kitchen does not measure up to what is expected in a Rosedale home and on that basis the Joys are entitled to damages. He has not provided any evidence of property value or change in property value as a result of the Lido kitchen installed in their Rosedale home. I reject a decline in property value as a basis for damages in this case.

29 For all of these reasons I disallow the counterclaim for base cabinets.

2. Granite Countertops ($5,000.00 counterclaim)

30 The Joys claim set-off and damages for a granite countertop that they allege was installed improperly. They claim that it was improper to place a layer of plywood on top of the lower cabinets and the granite countertop on top of the plywood. They complain because they say it is unsightly and also because it raises the countertop so that it is too high. They also claim that adjacent to the Viking stove the plywood creates a fire hazard.

31 Lido did not supply the granite countertop. Ms Bruno gave the Joys the name of a granite contractor, Granito, with whom she had worked in the past. Lido did not receive a commission or a referral fee and the Joys were under no obligation to use Granito. They chose to do so and contracted directly with Granito for the granite countertops.

32 The photograph filed as exhibit 1, tab 27 shows that before Granito installed the granite countertop its height in relation to the adjacent stove was obvious. Mr. Joy admits that Lido did not install the plywood. He testified that he was present on the day that the photograph was taken and saw the Joys' workers (they were doing other renovations in the house) and the granite contractor bringing plywood from the next room into the kitchen and placing it on top of the lower cabinets.

33 The photograph shows that measurements by laser were being taken on the day of the photograph. Mr. Joy's evidence is that the granite contractor was taking measurements after the main installation of cabinetry by Lido. It is obvious that this photograph was taken before the granite countertops were placed. As a builder and developer, and as the party selecting the thickness of granite to be used for the countertop, Mr. Joy would have known at that time what the final height of the countertop would be. If he and his wife were dissatisfied with the height of the countertop they had an opportunity to raise the concern and try to find a solution before having Granito install the granite countertop.

34 The Joys' position is that the only way to rectify the deficiency is to remove the granite countertop, which they claim will destroy the cabinetry, the sink, and other parts of the kitchen. Lido's position is that Granito could lift the countertop, allowing Lido to pull the cabinets forward by two inches, and then Granito could reinstall or replace the granite counter. According to Ms Bruno's evidence the Joys refused to consider Lido's offer to this effect, made together with Granito. Granito even offered to replace the granite countertop if it broke in the exercise.

35 I find that the Joys failed to reasonably mitigate their claim. They are holding Lido to a standard of perfection, but they did not contract for perfection. They contracted with Lido for high quality cabinetry manufactured and installed

2012 ON SC 5058, 2012 CarswellOrit 11114, 17 C.L.R. (4th) 158, 220 A.C.W.S. (3d) 320 “ : “

’Next. CANADA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). Ail rights reserved.

Lido Cabinet Ltd. v. Joy, 2012 ONSC 5058, 2012 CarsweiiOnt 11114

2012 ONSC 5058, 2012 CarsweiiOnt 11114, 17 C.L.R. (4th) 158, 220 A.C.W.S. (3d) 320

according to the approved design. From the photographs it appears to me that Lido supplied a beautifully designed and manufactured, high quality kitchen.

36 I find that the deficiency, if any, in the height of the granite countertop is not Lido's responsibility. Granito and the Joys, not Lido, affixed the plywood to the base cabinets. Granito is a direct contractor with the Joys and not a subcontractor of Lido. The Joys were under no obligation to use Granito as their granite contractor.

37 The Joys argue that Lido and Granito are jointly and severally liable for the overall deficiency and costs arising from the improper granite countertop. They claim that Lido is liable because they designed lower cabinets that are too shallow and that Granito is liable because they improperly installed plywood on top of the base cabinets before installing the granite, thereby raising it to a height that is too high.

38 Having found that there is no deficiency in the base cabinets, it follows that Lido did not provide erroneous measurements to Granito. In any event, before manufacturing the granite countertops Granito attended on site to take measurements from the "as built" cabinets. Mr. Joy was present. I find that the Joys have not met their onus of proving that Lido is liable to them for any deficiency in the granite countertops supplied by Granito.

39 The Joys also complain that the plywood layer placed on top of the base cabinetry under the granite is unsightly. They claim that it is visible from the front door and that it detracts from their expectation as to the aesthetic beauty of the kitchen that they wanted. They provided photographs of the plywood underneath the granite, filed as exhibit 4, tabs 4 and 10. The photographs were taken from underneath the lower cabinets — most likely from someone who must have been just about lying on the floor looking up to the underside of the cabinets, as might be the view of an infant or toddler. The photographs taken straight on or from the vantage point of a person of ordinary height do not show any unsightly plywood, as is clear from the photographs at exhibit 3, tabs 3, 5, 6, 7, 8, 9 and 16. There were no photographs taken from the front door showing that the plywood was visible, as stated by Mr. Joy in evidence.

40 I conclude that the plywood is not readily visible from the normal vantage point of a person of ordinary height walking into the house or standing in the kitchen. Rather, the plywood is underneath and hidden by the granite countertop. The unsightliness complained of would only be apparent to a toddler and is only visible from underneath, looking up at the underside of the countertop where it meets the cabinetry. No independent evidence was supplied to the effect that such an installation is other than industry standard.

41 I find that the photographs relied on by the Joys in an effort to prove this element of their counterclaim are misleading and fail to fairly depict the situation. Submitting these photographs in evidence and relying on them discredits the Joys' evidence.

42 As to joint and several liability of Lido and Granito, if Lido is not liable for deficient cabinetry (a finding that I have already made) then it follows that they are not liable for Granito's installation of the granite on top of that cabinetry. The Joys received Lido's design specifications at the beginning of the job, including cabinet heights. Mr. Joy declared in evidence on several occasions that he is a builder and developer. As such I draw the inference that he is capable of reading and understanding design drawings and specifications. The Joys selected the thickness of granite to install on top of the base cabinets. Mr. Joy was capable of calculating the exact height that would result by affixing granite at the thickness they chose on top of the cabinets.

43 The Joys' problem with the granite counter arises from the installation by Granito and the Joys' own worker of a plywood base on top of the base cabinets, under the granite. Lido did not install the plywood nor did its design deal with what was to be affixed on top of the base cabinets.

44 I find that Lido is not liable to the Joys for the Joys' complaint about the granite countertops, including the installation of the granite countertop and the plywood underneath it.

>ruxi. Canada Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 5



45 Had I found Lido liable for this deficiency claim then I would have considered the quantification of damages relied on by the Joys. They claim $5,000.00 as the price they paid to Granito for the granite countertops. However, I am not satisfied that they have proven that all of the granite countertops throughout the kitchen would have to be replaced. Nor have they proven whether some or all of the existing countertop could be saved and reused. Had I found liability I would have quantified the deficiency at $2,500.00, based on replacing the countertop in only half of the kitchen where it was supplied.

46 However, as liability has not been proven, the Joys' claim against Lido regarding the granite countertop is refused.

3. Kitchen redesign drawings ($1,500 counterclaim)

47 The basis of this claim is that the drawings must be redone to correct specifications. Not having proven the need to redo the cabinetry this claim fails.

48 Had the claim been allowed I would have found that damages claimed have not been proven. There is no independent evidence as to the cost of redesigning the cabinetry. The Joys have not contracted with a designer or obtained any quotes. The claim is refused.

4. Sink ($1,400.00 counterclaim)

49 The basis of the claim of $1,400.00 for a sink is that the sink will be destroyed when the countertop is removed. Having found that Lido is not liable for the countertop, it follows that Lido is not liable to replace the sink.

50 The quantification relied on by the Joys includes the cost of a plumber but there is no evidence to support the cost of the sink or a plumber. Had liability been found recovery would have been denied on the basis of lack of evidence.

5. Marble Backsplash ($2,000.00 counterclaim)

51 The Joys claim $2,000.00 for the backsplash which they claim will be destroyed when the countertop is removed. They also claim that if the countertop is lowered to the proper height then they will require additional backsplash tiles. The quantum of the claim is based on Mr. Joy's estimate, unsupported by any quotations, documents or invoices.

52 The claim is disallowed for several reasons. First, as already found, Lido is not liable to replace the countertop. Second, the issue as to the countertop was obvious to Mr. Joy, or ought to have been obvious to him if it is a genuine concern, at the time the granite measurements were being taken, after the plywood was installed. As an experienced builder he should not have proceeded to have the granite countertop and tile backsplash installed before resolving the concern over the height and depth of the countertop. In going forward and completing the granite and backsplash not only did the Joys fail to mitigate, they actually caused damages to escalate.

53 An undercurrent throughout the trial is the concern as to whether the Joys' complaints are genuine. When asked whether the kitchen was functional at the time it was completed and today Mr. Joy responded that it was not. He explained the reason that it was not entirely functional was because it was not aesthetically pleasing to his wife, who is the title owner of the home. Mr. Joy testified that the kitchen is not fully functional to "an Italian woman" (referring to his wife) to whom her kitchen "is her whole life". He testified that the functionality and design of the kitchen are inconsistent with his wife's needs to have a kitchen that is aesthetically pleasing. If that is the case the best evidence would have been that of Mrs. Joy. I find it significant that Mrs. Joy failed to give evidence, leaving it to her husband to testify on her behalf. No explanation was given as to why she did not testify.

6. Hardwood flooring ($2,000.00 counterclaim)

54 The Joys describe their claim for $2,000.00 for hardwood flooring as based on a reduction in the kitchen floor area if deeper counters are installed to replace the base cabinets. Having found no liability on Lido's part to install deeper base

Next- • canaoa Copyright '■! Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 6


2012 ONSC 5058, 2012 CarswellOnt 11114; 17 C.L.R. (4th) 158, 220 A.C.W.S. (3d) 320

cabinets, the claim must fail. Furthermore, the Joys provided no evidence of probative value to support the monetary claim.

7. Minor deficiencies to upper cabinetry ($1,000.00 counterclaim)

55 The Joys complain about minor touch up work and deficiencies that require correction. As Ms Bruno testified, every cabinetry installation requires minor adjustments and repairs after it is completed. This includes items such as caulking around crown molding, tightening cabinet screws and similar items. The need arises because drywall and other components of new construction shift after installation, requiring minor adjustments to the cabinetry.

56 In the case of the Joys, they would not permit Lido to attend on site to inspect the work and effect any of these minor repairs and adjustments. Mr. Joy testified that Lido would not return unless the Joys paid the outstanding account but Ms Bruno stated in evidence that Lido was ready and willing to perform the minor necessary repairs and was not permitted entry to inspect and carry out these minor items.

57 Faced with this contradictory evidence I prefer the evidence of Ms Bruno over that of Mr. Joy, having found that she is a more credible witness, for reasons already stated.

58 On the claim for $1,000.00 for minor deficiencies and adjustments I find that the Joys are not entitled to recover this amount because they failed to mitigate by refusing to allow Lido to return to inspect and carry out these minor adjustments and repairs. The claim is refused.

8. Remove and dispose of cabinets ($1,500.00 counterclaim)

59 Having found that Lido is not liable to replace the base cabinets or granite countertops, they are also not liable to dispose of these materials. The counterclaim for removal and disposal costs is refused. Had I found liability the claim would have been refused for lack of evidence of quantification. No quotes or invoices were provided to support the claim.

c) Timeliness of the lien

60 Lido is a contractor within the meaning of that term as defined in the Construction Lien Act. The Act provides at section 31 (2)(b) that a contractor's lien must be preserved by registering a lien within 45 days after the date the contract is completed or abandoned. The lien must be perfected by registering a certificate of action within 90 days after the date the contract is completed or abandoned. If a contractor fails to meet these limitation periods the lien rights expire.

61 Lido registered its claim for lien on November 25, 2010 as instrument AT2559911 and its certificate of action on December 30, 2010 as instrument AT2589134.

62 The Joys challenge the timeliness of the work, claiming that the contract was completed on October 6,2010, more than 45 days prior to the date the lien was registered. They acknowledge that Lido's installer attended at the site on October 12, 2010 for three hours to complete a few items of installation, but claim that the work he did that day was so trivial that it did not extend the October 6, 2010 completion date. They also rely on October 6, 2010 as the date of completion because Lido sent its last two invoices on that date.

63 Lido asserts that the work performed on October 12, 2010 was sufficiently substantial as to constitute the last of the contract work within the meaning of section 31(2)(b), constituting the completion date. If the contract work was in fact completed on October 12, 2010 then Lido's lien was preserved and perfected in time.

64 It is clear from the case law that repairs and rectification of deficiencies cannot revive lien rights that have expired. The work that Lido's installer, Mr. Mohammed, did on October 12, 2010 was not repair work or rectification of deficiencies. It was original work, installing the remaining cabinetry pieces and hardware.

Next -CAMAOA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

Lido Cabinet Ltd. v. Joy, 2012 ONSC 5058, 2012 CarsweilOnt 11114

2012 ONSC 5058, 2012 CarsweilOnt 11114, 17C.L.R. (4th) 158, 220 A.C.W.S. (3d) 320

65 Pursuant to the Act a contract is deemed to be completed when the price of completion or last supply is not more than one percent of the contract price or $1,000.00, whichever is less. The contract price in this case is $16,000.00 plus taxes. I do not include the amount that the government extracts for taxes as part of the contract price as between Lido and the Joys. One percent of the contract price is $160.00. If the installer supplied at least $160.00 worth of services and materials on October 12, 2010 then Lido meets the threshold and the completion date is October 12, 2010. Otherwise it does not.

66 Ms Bruno gave evidence in redirect examination that Lido paid the installer $450.00 in cash for his work on October 12, 2010. Lido provided no receipts, nor did they provide this evidence of payment in chief in Ms Bruno's affidavit or in any affidavit from Mr. Mohammed. A statement from the installer was filed as an exhibit, not in affidavit form, but it is silent as to payment. Based on the timing of this evidence and the absence of any corroboration I do not accept Lido's evidence that it paid the installer $450.00 for the October 12, 2010 work.

67 Mr. Joy's evidence on this issue is that one percent should be calculated on a tax included basis. He responded to the assertion that the installer was paid $450.00, testifying that the installer spent no more than three hours at the site and could not be worth $150.00 per hour. He did not provide any evidence as to normal hourly rates of cabinet installers.

68 Based on a contract price of $16,000.00 one percent is $160.00. The issue is whether there is sufficient evidence to establish that Lido's installer supplied $160.00 worth of services and materials to the Joys' project on October 12, 2010. According to Ms Bruno the installer spent the better part of the day there. She has no direct knowledge. According to Mr. Joy the installer spent three hours on site. For reasons already given I find that Mr. Joy is prone to exaggerating his evidence to better his case. I find that the installer was on site for more than three hours but less than a full day. I draw the inference from the combined evidence that Mr. Mohammed supplied at least four hours of services on October 12, 2010.1 also find that he was completing contract work as he was not effecting repairs or rectifying deficiencies.

69 Cabinetry installation is skilled labour and while neither party provided any evidence of appropriate hourly rates for cabinetry installation contractors I am prepared to take judicial notice of such rates based on my experience of more than eight years as a Construction Lien Master in Toronto hearing construction lien trials such as this one. I am satisfied that the hourly rate of a skilled cabinet installer would be at least $40.00.

70 Based on an hourly rate of at least $40.00 and a minimum of four hours worked on October 12, 2010, then even without supplying any materials that day, the threshold for completion on October 12,2010 is met. The evidence satisfies me that Mr. Mohammed also supplied materials that day, bringing cabinetry hardware with him to the site, so that the value of the supply of materials and services on October 12,2010 exceeded $160.00. On that basis I find that Lido carried out contract work on October 12, 2010 that constituted completion work. The date of completion of the Lido contract with the Joys was October 12, 2010.

71 The Lido lien was preserved and perfected in time.

Conclusion

72 The contract price is $ 16,000.00 plus HST of $2,080.00 plus an extra for the trash compactor cabinet door of $75.00 plus HST of $9.75 for a total price of $18,164.75. Lido invoiced and received payment of $7,000.00. Outstanding are invoice #0681 dated September 20,2010 for $9,040.00 including HST, invoice #0699 dated October 6,2010 for $2,040.00 including HST and invoice #0700 for $84.75 including HST.

73 In conclusion I find that Stefania Joy and David Joy must pay to Lido the balance of the contract price of $11,164.75 plus prejudgment interest up to the date of this judgment and post judgment interest thereafter until paid.

74 If the amount owing is not paid within 30 days after the report arising from this reference is confirmed then Lido is entitled to enforce its lien remedies against the property.

'!&>■’' Canada Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.


2012 ONSC 5058! 2012 CarswellOnt 11114, 17 C.L.R. (4th) 158, 220 A.C.W.S. (3d) 320

75 Costs should follow the event, calculated on a partial indemnity scale. The plaintiff did not require counsel of 29 years experience and I have taken that into account in the fixed fee amount. Taking into account the factors prescribed by the rules and the Act, and in particular the amount in issue, the degree of success and proportionality, and for the same reasons in respect of proportionality as I gave in 1022423 Ontario Ltd. v. Metcap Living Management Inc., 2010 ONSC 1782 (Ont. Master) at paragraphs 20 and 21,1 fix costs at $8,636.27 made up of fees of $6,500.00 plus HST of $845.00 plus disbursements of $1,291.27 (including HST of $701.17).

Action allowed; counterclaim dismissed.

End of Document Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rightsreserved.

vext-CAMABA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

TAB “3”

Dirm Inc. v. Dalton Engineering & Construction Ltd., 2004 CarsweilOnt 3479

2004 CarswellOnt 3479, [2004] O.J. No. 3524, [2004] O.T.C. 760, 133 A.C.W.S. (3d) 394...

PoufCi 3S

2004 CarswellOnt 3479 Ontario Superior Court of Justice

Dirm Inc. v. Dalton Engineering & Construction Ltd.

2004 CarswellOnt 3479, [2004] O.J. No. 3524, [2004] O.T.C. 760,133 A.C.W.S. (3d) 394,37 C.L.R. (3d) 1

Dirm Inc. (Plaintiff) and Dalton Engineering & Construction Limited (Defendant)

John Bianchi Grading Limited (Plaintiff) and Eastern Construction Company Limited and The Board of Governors of the George Brown College of Applied Arts and Technology (Defendants)

Master Sandler

Heard: February 19, March 9, May 19, 2004 Judgment: August 24, 2004

Docket: 03-CV-254163, 02-CV-241608

Counsel: Kenneth W. Movat, Kathryn E. Lack for Moving Party, Defendant Salvator Mannella for Responding Party, Plaintiff W.A. McLauchlin for Moving Party, Defendant S. Veltri for Responding Party, Plaintiff


MOTIONS by general contractors pursuant to s. 47 of Construction Lien Act to discharge liens on basis of improper preservation.

Master Sandler.

Introduction

1 These reasons are being written to dispose of two motions under s. 47 of the C.L.A., in each of two entirely separate lien actions involving different projects, that raise certain similar issues. In each case, the ultimate similar issue is whether s. 34 (l)(b) applies, and if so, whether the plaintiffs lien was preserved in accordance with sections 34 (l)(b), 34 (3), 16 (1), 16 (3) and 87 (1) of the C.L.A. and s. 1.3. of O. Reg. 175 made under the C.L.A. In each case, the owner of the premises on which the work was done was a college of applied arts and technology. The key issue is the proper procedure to be followed for preservation of a lien if s. 34 (1) and (3) applies, and whether each lien claimant followed the correct procedure, and if not, whether anything can be done by the court to rectify the errors and save the liens?

The Background Facts in Dirm v. Dalton

2 Dirm is a concrete sub-contractor. In December, 2002, Dirm entered into a contract with Dalton Engineering, the general contractor, to perform certain concrete forming and cast-in-place concrete work for a construction project on lands owned by Centennial College at 951 Carlaw Ave., Toronto, for a price of about $236,000. The work was done from mid-December/02 to the end of June/03. Dirm claims it is owed $146,700 plus G.S.T. and on July 25/03, its solicitor electronically registered a claim for lien against the premises at 951 Carlaw Ave. The solicitor also sent a letter to Centennial, the details of which will be set out below. Dirm's lien was vacated in August on the posting of security by Dalton under s. 44 (1) of the C.L.A. Dirm's statement of claim was issued August 21/03 naming only Dalton since, by s. 44 (6), the lien ceased to attach to the premises and to the holdbacks and other amounts subject to a charge under s. 21, and became instead a charge upon the security. In effect, this is simply a contract dispute between Dirm and Dalton but

- CANADA Copyright®.'Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 1

2004 CarswellOnt 3479, |2004] O.J. No. 3524, [2004] O.T.C. 760, 133 A.C.W.S. (3d) 394... — :

governed by the Construction Lien Act procedure, and Dirm currently has security for its lien claim. In November/03, Dalton obtained the usual judgment of reference and the first construction lien pre-trial was fixed for January 30/04.

Dalton's Motion

3 In late November/03, Dalton served a motion seeking to discharge Dirm's lien (charge) because of (a) lateness of preservation and (b) improper service of the claim for lien, originally returnable December 15/03, but later changed to February 19/04.

4 I heard part of Dalton's motion (lateness of preservation) on February 19 and ruled that there was a triable issue as to when the last supply of services was made. Dalton was contending for May 30/03 while Dirm was contending for June 26/03. If the last work was done on May 30, the preservation on July 25 was too late; if done on June 26, the preservation on July 25 was in time. So I ruled that the case would have to proceed to trial to determine, inter alia, this disputed factual question. Even if Dirm's lien was late, it might be able to get a personal judgment under s. 63 of the Act because it has a direct contractual relationship with Dalton, provided it was contractually entitled to the money it was claiming.

5 But the other basis of Dalton's motion was that preservation was improper because Dirm had registered its lien in the land registry office under s. 34 (l)(a) rather than "give" a copy of the claim for lien and affidavit of verification to the owner under s. 34 (l)(b) and s. 34 (3), and s. 16 (1) and s. 16 (3), and s. 87 (1) of the Act, and s. 1.3. of O. Reg. 175, by mailing a copy of the claim for lien and affidavit of verification to the "office of the president of the college". But Dirm's solicitor did send, by registered mail, a copy of the electronically registered claim for lien and a copy of the affidavit of verification with a letter dated July 30/03 but the envelope and the letter were addressed to "The Board of Governors of the Centennial College of Applied Arts and Technology, 951 Carlaw Avenue, Toronto, M4K 3M2".

6 Dalton contended that preservation was governed by s. 34 (l)(b) and not 34 (l)(a) and that this was not a proper preservation under s. 34 (l)(b). This part of the motion was adjourned to March 9/04 to be heard together with another pending motion in the case of Bianchi v. Eastern that I knew raised a similar issue. (At the end of the argument on March 9,1 conducted the first construction lien pre-trial in Dirm v. Dalton. There were no other lien claimants. The only consequence of a ruling that the lien was invalid would be that the security posted would be returned to Dalton but both counsel wanted the action to proceed as an ordinary contract action under s. 63-(see Teepee Excavation & Grading Ltd. v. Niran Construction Ltd. (2000), 49 O.R. (3d) 612 (Ont. C.A.), so I set a timetable for documentary and oral discovery and fixed the next construction lien pre-trial for September 24/04.)

The Background Facts in Bianchi v. Eastern

7 Bianchi is an excavation and back-fill sub-contractor. In February/2002, Bianchi entered into a contract with Eastern Construction, the general contractor, to do excavation and back-fill work for a construction project on certain lands owned by George Brown College of Applied Arts and Technology at their Casa Loma campus on Kendal Avenue in Toronto for a price of $337,804. There are several buildings comprising this campus on Kendal Ave; the specific municipal address of the construction was 146 Kendal Ave. The work was done from about February 22/02 to about November 6/02. Bianchi claims it was owed $183,062.91 and on December 11/02, its solicitors electronically registered a claim for lien against the premises at 146 Kendal Ave. (The solicitors also sent some letters to George Brown, the details of which will be set out below.) Bianchi's lien was vacated in December by Eastern posting security under s. 44 (1).

8 Bianchi started its action on December 30/02, naming as defendants Eastern Construction and The Board of Governors of the George Brown College of Applied Arts and Technology. A statement of defense and counterclaim of Eastern was delivered in mid-January/03, and a reply and defense to counterclaim was delivered, also in mid-January/03. Bianchi obtained the usual judgment of reference on February 6/03 and the first construction lien pre-trial was fixed for May 2/03.

9 At this first construction pre-trial, I separated off the Bianchi claim from another "stream", (DMS), and since the dispute was only and directly between Bianchi and Eastern and the lien had been "bonded-off by Eastern, I dismissed

Dirm Inc. v. Dalton Engineering & Construction Ltd., 2004 CarswellOnt 3479

vNext-.-tAMAQA Copyright €> Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.


2004 CarswellOnt 3479, [2004] O.J. No. 3524, [2004] O.T.C. 760, 133 A.C.W.S. (3d) 394... ” : '

the action against the defendant George Brown College. I also fixed a timetable for production and discovery, and fixed the next construction pre-trial in the Bianchi case for November 21/03.

10 At this second construction lien pre-trial on November 21/03,1 heard a progress report. More discoveries were required. I set further deadlines for completion of discovery and fixed a third construction lien pre-trial for April 23/04. Counsel for Eastern then advised of his intention to bring amotion under s. 47 to discharge the plaintiffs lien on the basis of improper preservation because George Brown College was said to be a "Crown agency" and the lien was alleged not to have been preserved in accordance with s. 34 (l)(b) and s. 34 (3) of the C.L.A. The motion date was fixed for March 9/04.

Importance of These Two Motions

11 There are at least twenty-five colleges of applied arts and technology in Ontario. They are as follows:

Humber College — Toronto

George Brown College — Toronto

Seneca College — Toronto

Centennial College — Scarborough (Toronto)

Sheridan College — Oakville

Conestoga College — Kitchener

Durham College — Oshawa

Fanshawe College — London

Georgian College — Barrie

Sir Sandford Fleming College — Peterborough

St. Clair College — Windsor

Loyalist College — Belleville

Mohawk College — Hamilton

Niagara College — Welland

La Cite College — Ottawa

St. Lawrence College — Kingston

Lambton College — Sarnia

Canadore College — North Bay

Cambrian College — Sudbury

Algonquin College — Ottawa

Boreal College — Le College Borel — Sudbury

Northern College — Timmins

ext Canada Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

Dirm Inc. v. Dalton Engineering & Construction Ltd., 2004 CarsweiiOnt 3479

2004 CarsweilOnt 3479, [2004] O.J. No. 3524, [2004] O.T.C. 760, 133 A.C.W.S. (3d) 394...

Sault College — Sault St. Marie

Confederation College — Thunder Bay

Grands Lacs College — Le College Des Grands Lacs — Toronto and Windsor

There may be four other such colleges, namely, Ridgetown College in Ridgetown (near Windsor), Kempville College in Kempville (near Ottawa), The Michener Institute (Toronto), and College d'Alfred (Alfred). None of these four colleges are referred to in O. Reg. 34/03 under the Ontario Colleges of Applied Arts and Technology Act, 2002-(see below). Ridgetown and Kemptville may be part of the University of Guelph according to their websites. I am not totally sure about the status of Michener and Alfred. There may be another Regulation under the said Act but I couldn't find it in a brief search. These four colleges would have to be checked at the time any lien against any of them is sought to be preserved to 'see if they are colleges under the said Act or are otherwise Crown agencies.

George Brown College and Centennial College each have several campuses or locations in Toronto, (details set forth below). Some of the other colleges may also have several different locations or campuses.

Future construction at some of these various colleges can be expected and therefore, lien claims and lien actions can be expected, so it is important for the profession and contractors and suppliers to know how to properly preserve a lien where services or materials are supplied to an improvement that is a college established under The Ontario Colleges of Applied Arts and Technology Act, 2000.

12 While this judgment does not deal with other institutions, it occurs to me that other problem institutions could be AGO, ROM, O.C.A.D. (Ontario College of Art and Design), the casinos in Windsor, Orillia and Niagara Falls, other local museums and art galleries, Ontario universities, and other educational, cultural, health or tourist-oriented institutions. Then there is ORC (Ontario Realty Corporation. I am sure there are others. In each case, the solicitor wishing to preserve a lien for services or materials supplied to any such institution will have to consider whether such institution is owned by the Crown or a Crown agency and then proceed accordingly. If in doubt, I think the safe course would be to follow both the s. 34 (l)(a) and (b) procedures as was done in Ken Gordon Excavating Ltd. v. Edstan Construction Ltd., intra.

How Liens Are To Be Preserved — s. 34 (1) of the C.L.A.

13 Under this section, a lien may be preserved in one of two different ways. Where the lien attaches to the premises, the lien is to be preserved by registering, in the proper land registry office, on the title to the premises, a claim for lien in accordance with Part V of the C.L.A. Where electronic registration is in force, one must do an e-registration. Where the lien does not attach to the premises, the lien is to be preserved by "giving", to the owner, a copy of the claim for lien- (see s. 34 (5) for the contents of the claim for lien)-together with the affidavit verification required by s. 34 (6). How one "gives" a copy of a claim for lien and affidavit is prescribed by s. 34 (2) re: public highways, s. 34 (3) re: the Crown or Crown agencies and s. 34 (4) re: railway right-of-ways, and by s. 87 (1) "How documents may be given", and lastly, by s. 1.1.2. and 3. of O. Reg. 175 made under the C.L.A. in circumstances where a copy of the claim for lien (and affidavit) must be "given" to an office of the Crown. (I will return to these sections later in these Reasons.)

14 To determine if the lien attaches to the premises, one must turn to s. 14(1) and s. 16 of the Act. Firstly, section 14 (1) provides, generally, for a lien "upon the interest of the owner in the premises improved ...". But s. 16 (1) provides that "A lien does not attach to the interest of the Crown in a premises." And Crown is defined in s. 1 (1) to include "... a Crown agency to which the Crown Agency Act applies". Section 16 (3) goes on to provide, inter alia, that "Where the Crown is the owner of a premises ... the lien does not attach to the premises but constitutes a charge as provided by section 21, and the provisions of this Act shall have effect without requiring the registration of a claim for lien against the premises." This takes one back to s. 34 (l)(b) and s. 34 (3) which require, where the owner of the premises is the Crown, the "giving" of a copy of the claim for lien together with the affidavit of verification "... to the office prescribed

'Next.'CANADA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.


2004 CarsweliOnt 3479, [2004] O.J. No. 3524. [2004] O.T.C. 760, 133 A.C.W.S. (3d) 394... ' : :

by regulation or, where no office has been prescribed, to the ministry or Crown agency for whom the improvement is made. The "prescribed regulation" is O. Reg. 175, s.l.

15 So the critical question is whether either George Brown College or Centennial College are "the Crown" or are "a Crown agency". (As will appear later in these Reasons, Bianchi's counsel conceded that George Brown College was a Crown agency but Dirm's counsel disputed that Centennial was a Crown agency.)

16 There is a reference to the general question of how to preserve liens that do not attach to premises in Kirsh's Guide

to Construction Liens in Ontario, 2 nd ed., 1995, Butterworths, at pp. 88-89 and a reference to a "college of applied arts and technology in footnote 119, at p. 89.

Crown Agency

17 It must be remembered that the Dirm lien was registered July 25/03 and the Bianchi lien was registered December 11/02. This is important because there were different applicable pieces of legislation in effect at these different times as detailed below.

18 Mr. Mannella, for Dirm, argued strenuously that Centennial College is not a Crown agency, and that his lien was to be, and was, properly preserved by registration, and that sections 16, 34 (l)(b), 34 (3), 87, and O. Reg. 175, s. 1.3. have no application. In the alternative, he argued that his method of "giving" a copy of the claim for lien and affidavit, if such "giving" was required, was proper.

19 There is an article by Mr. Harvey Kirsh called "Ontario Hydro and the Construction Lien Act", published in (1995), 17 Advocates' Quarterly, at p. 199, that has some bearing on the issue I am considering and I have found it to be of some assistance on the topic of Crown agency, generally.

The Applicable Legislation

20 The Crown Agency Act, R.S.O. 1990, c. 48 (amended by S.O. 1998, c. 15, Sched. E, s. 8, effective April 1, 1999, which repealed s. 3 of the 1990 Act) provides, in s. 1, as follows:

In this Act, "Crown agency" means a . . . board . . . university ... or agency, owned, controlled or operated by Her Majesty in right of Ontario, or by the Government of Ontario, or under the authority of the Legislature or the Lieutenant Governor in Council.

George Brown College

21 So one question is whether George Brown College was a "university" or "agency" or whether its Board was a "board" owned, controlled, or operated by Her Majesty in the right of Ontario or by the Government of Ontario, etc.?

22 The applicable legislation that was in force when the Bianchi lien was attempted to be preserved-(December 11/02)- was the Ministry of Colleges and Universities Act, R.S.O. 1990, c. M. 19. The critical sections are sections 5 (1), 5 (2), 5 (3) and 5 (7). The relevant Regulations were O. Reg. 770 and O. Reg. 771 which continued twenty-three colleges of applied arts and technology including George Brown College, (Regulation 771, s. 10), and Centennial College, (Regulation 771, s. 4). This legislation does not specifically provide that a college, or a board of governors, or the Council of Regents, is a Crown agency. To determine this question, (as of December 11/02 in relation to George Brown College), one must turn to the common law. Whether or not a particular body is an agent of the Crown depends upon the nature and degree of control that the Crown exercises over it. If one considers this legislation, and the cases of Westeel-Rosco Ltd. v. South Saskatchewan Hospital Centre (1976), [1977] 2 S.C.R. 238 (S.C.C.), Halifax (City) v. Halifax Harbour Commissioners (1934), [1935] S.C.R. 215 (S.C.C.), Perehinec v. Northern Pipeline Agency, [1983] 2 S.C.R. 513 (S.C.C.), R v. Ontario (Labour Relations Board), [1963] 2 O.R. 91 (Ont. C.A.), Lavigne v. O.P.S.E. U., [1991] 2 S.C.R. 211 (S.C.C.) and Douglas! Kwantlen Faculty Assn. v. Douglas College, [1990] 3 S.C.R. 570 (S.C.C.), it is clear that George Brown College was a

■NexLcAHAOA Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). Ail rights reserved.


2004 CarswellOnt 3479, [2004] O.J. No. 3524, [2004] O.T.C. 760, 133 A.C.W.S. (3d) 394... : :

Crown agency as of December 11,2002. As I understand Mr. Veltri's submissions, he did not dispute that George Brown College was a Crown agency although he did raise the issue in paras. 11-14 of his Factum. I have relied on his oral submissions.

Centennial College

23 The Ministry of Colleges and Universities Act was repealed and replaced by the Ontario College of Applied Arts and Technology Act, 2002, S.O., c. 8, Sched. F. This statute came into force on April 1, 2003. This statue, in s. 2 (4), specifically provides that "A college established under subsection (1) is an agency of the Crown." Under this statute, O. Reg. 34/03, a general regulation, was passed which also came into effect on April 1, 2003. Centennial College was established under s. 2(1) of the Act and s. 2.(1) 4. of O. Reg. 34/03. This is the legislation that was in effect as of July 25/03, when Dirm's lien was sought to be preserved.

The Argument of Dirm's Counsel

24 Mr. Mannella argued that while Centennial College, (the college itself), seems to be an agency of the Crown because of s. 2 (4) of the Ontario Colleges of Applied Arts and Technology Act, the Board of Governors of the College is not. He argued that there is a difference between the College and its Board of Governors. He pointed out that the Board of Governors is a non-share corporation under s. 3 (2) of the Act. He noted that under Reg. 34/03, s. 4 (l)(b), the president of a college is a member of the board of governors and he noted that the title of the land at 941 Carlaw Avenue is held by the "Board of Governors of the George Brown College of Applied Arts and Technology". There is nothing in this statute or the said Regulation 34/03 that I could find about owing or acquiring or purchasing or selling or mortgaging real property. By contrast, s. 3 (15) of O. Reg. 770 under the former Act prohibited such activity without Ministry approval. But s.8(c) of the Act suggests that the Corporations Act generally governs the powers that may be exercised by a college but regulations may be passed limiting such powers.

25 I note that s. 1 of the Crown Agency Act refers to, inter alia, a "board" that is "owned, controlled or operated by Her Majesty in right of Ontario or by the Government of Ontario ..." etc. So even if there is a legal difference between the "College" and the "Board of Governors" as Mr. Mannella argues but which argument I do not accept, the "Board of Governors" is itself a Crown agency by reason of the Crown Agency Act and the common law on Crown agencies, above set out.

26 So I find that both Centennial College and its Board of Governors were and are Crown agents under s. 2 (4) of the Ontario Colleges of Applied Arts and Technology Act, 2002 and, if necessary, under the Crown Agency Act. The main contract was between Dalton and the Board of Governors of Centennial College and therefore, the "Crown" is the owner of the premises within s. 16 (3) and s. 16 (1) of the C.L.A. and the lien of Dirm did (and does) not attach to the premises on Carlaw Avenue and preservation is governed by s. 34 (l)(b).

27 I also find that George Brown College and specifically, its Board of Governors, were and are Crown agents. The main contract was between Eastern Construction and the Board of Governors of George Brown College and therefore, the lien of Bianchi did (and does) not attach to the premises at 146 Kendal Ave and again, preservation is governed by s. 34 (l)(b).

The Proper Procedure for Preservation of a Lien Once it is Clear That s. 34 (l)(b) Applies

28 Under s. 34 (l)(b), a copy of the claim for lien together with an affidavit of verification has to be "given" to the owner. (This must be done, for a sub-contractor, where s. 31 (3)(b)(i) applies, within 45 days of the last supply of services or materials. Section 34 (3) directs one, where the owner of the premises is the Crown as it is in both cases here, to "the office prescribed by regulation". Under O. Reg. 175, s. 1.3., where the "contract" is with a college of applied arts and technology — (here, Eastern's contract was with the Board of Governors of George Brown College and Dalton's contract was with the Board of Governors of Centennial College) — the copy of the claim for lien and the affidavit of verification must be given to "the office of the president of the college". (Contract means the contract between the

'text,--canaoa copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.


2004 CarswellOnt 3479, [2004] O.J. No. 3524, [2004] O.T.C. 760, 133 A.C.W.S. (3d) 394... ~—

owner and the contractor — see s. 1 (1) definition of "contract". It does not refer to the Dirm-Dalton sub-contract or the Bianchi-Eastern sub-contract.)

29 Under s. 87, "given" means being "... sent by certified or registered mail addressed to the intended recipient. .. " here, "the office of the president of the college", "... at the recipient's last known mailing address . . . ". (I have not concerned myself with whether either lien claimant could have used the alternative "rules of court" procedure, also referred to in s. 87 (1), because it was not used. Quaere whether a claim for lien is an "originating process" within rule 16.01 (1) and rule 1.03, Definitions, of the Rules of Civil Procedure. (I doubt it, but I do not decide the point as it was not before me.)

The Complete Method of Preservation Actually Used by Dirm's Solicitor

30 It became clear during argument that Dirm's solicitor, when taking the steps he took to preserve Dirm's lien, was not conscious of the fact that there was anything special about the owner, Centennial College. He did not think about the question whether it was a Crown agency nor did he intentionally adopt both methods of preservation (registration and mailing) because he was unsure which one was correct, as did the lien claimants S. Henry & Sons Limited and Ken Gordon Excavating Limited in the case of Ken Gordon Excavating Ltd. v. Edstan Construction Ltd. (1984), 12 D.L.R. (4th) 481 (S.C.C.), at p. 493. Rather, he used the procedure that he always used to preserve liens against schools and universities, i.e., he registered the claim for lien against the title of the premises on July 25/03 and, on July 30/03, he sent a letter, by registered mail, addressed to "The Board of Governors of Centennial College of Applied Arts and Technology" at 951 Carlaw Ave., Toronto, MYK 3M2, enclosing a copy of the electronically registered claim for lien and the affidavit of verification, and saying in the covering letter, "Please take this letter as notice that my client has registered a claim for lien against the above-captioned premises for the reasons and in the amount set out on the copy enclosed." There followed a section 39 demand for information requesting the five items of information listed in s. 39 (1) 1. i, ii, iii, iv and v of the C.L.A.

31 This letter, after it entered the premises at 951 Carlaw Ave., was internally directed and delivered to Nate Horowitz, Dean of Communications Arts Administration Department. He forwarded the letter to Leona Mitchell who was Acting Manager, Renovations & Special Projects, as she and Adam Crabe were Centennial's representatives for the construction project dealing with Dalton, the general contractor, and the other people involved in the construction project. She directed the said letter to Maureen Bavington, the Executive Assistant in the Office the President. There is no affidavit evidence as to the physical location of the Office of the President but I ascertained (judicial notice) from Centennial College's website at www.centiannialcollege.ca that they have five campuses, namely, Ashtonbee Rd., Warden Woods, Progress Ave., Momingside — Ellesmere, all in Scarborough, and The Centre for Creative Communications at 951 Carlaw Ave. in east Toronto where the construction work was actually done. The current president is Anne Buller, and the Office of the President's address is shown as P.O. Box 631, Station "A", Toronto (Scarborough), Ontario, M1K 5E9. The president's office is not at 951 Carlaw but at one of the other campuses. The Board of Governors is made up of a Chair and seventeen other governors. The president is one of the Board of Governors. Twelve governors are appointed from the external community by the Ontario Council of Regents. The other four are elected from internal constituencies-student, faculty, support staff, and administration. Under the 2000 Act, The Board of Governors is a "non-share corporation". The members of the Board of Governors are a group of people — see sections 4, 5, 6, 7 and 10 of O. Reg. 34/03. As I have said, it is important that a claim for lien be "given" to the proper person at the proper place (the office of the president) so that he or she can take immediate steps to consult with legal and construction advisors and, if necessary, halt the payment of holdbacks and other amounts, or authorize the release of the payment of holdbacks and other amounts if no claim for lien has been "given" to the "office of the president" within the specified time. (Note that it is not required to actually set out the name of the president on the envelope or covering letter, nor is it necessary that the president himself or herself actually see or receive the claim for lien and affidavit which is why sending it to the office of the president (a particular place) is sufficient. It then becomes the responsibility of those in charge of such "office" to take whatever steps must be taken to deal with the claim for lien and, if necessary, to stop any payment. Or,

(Next;'CANADA Copyright©.' Thomson Reuters Canada Limited or its licensors (excluding individual court documenls). Ail rights resented.

Dirm inc. v. Dalton Engineering & Construction Ltd., 2004 CarswellOnt 3479

2004 CarswellOnt 3479, [2004] O.J. No. 3524, [2004] O.T.C. 760, 133 A.C.W.S. (3d) 394.......................................................

if no claim for lien has been received and the time for doing so has expired, then to authorize payment of any holdbacks and other amounts owing.

32 There is also no evidence before me as to what day the letter was received by Ms. Bavington at the President's office. Forty-five days following June 26/03, the last day of supply alleged by the plaintiff, would be August 10. It is likely to have been received by Ms. Bavington in the Office of the President on or before August 10, although Mr. Movat argued that it is not clear on the evidence when it was received. But if the provisions of s. 34 (l)(b) and s. 34 (3), and O. Reg. 175, s. 1.3. are followed, then s. 87 (1) provides that the words "giving" and "given", used in those sections, mean that any document required to be "given" may be "sent" by certified or registered mail addressed to the intended recipient at the recipient's last known mailing address according to the sender’s "records" or as stated in the most recent land registry office document. (In this case, the sender's "records" would have to be the college's easily ascertained proper mailing address.) By s. 87 (3), the date appearing on the postal registration receipt is deemed conclusively to be the date of mailing. Thus it is clear from these sections that it is the "giving" that must be done within the forty-five day period, and the "giving" is the "mailing", so that the date of receipt is irrelevant to the timeliness of preservation where the correct procedure has been followed.

33 It is true that s. 87 (2) deems a document sent by certified or registered mail to be "deemed to have been received by the person on the fifth day following the date on which it was mailed, exclusive of Saturdays and holidays", (in the absence of evidence to the contrary), but this section has no application to the "giving" referred to in s. 34 (l)(b) and s. 34 (3), because "giving" is accomplished by "sending", i.e., mailing, and the time limit for preservation-^. 31 (l))-i.e., "giving", i.e., "sending", i.e., "mailing", is, in this case, forty-five days from last supply-( see s. 31 (3)(b)(i)). So, as I said in the preceding paragraph, the date of "receipt" is irrelevant to the timeliness of preservation where the proper procedure has been followed.

34 But here, the envelope containing the claim for lien and affidavit of verification, and the covering letter, were misaddressed, not to the "office of the president of the college" which was at P.O. Box 631, Station "A", Toronto, M1K 5G9 as required, but to "The Board of Governors of the College" at 951 Carlaw Ave., Toronto, Ontario M4K 3M2.

35 So in considering the question of whether the lien was properly preserved, and whether if not, any relief can be given under s. 6 or otherwise, it may be important to know whether, in fact, the claim for lien and affidavit actually had been received by the office of the president within forty-five days from June 26. And in this case, the answer seems to be "Yes" since the envelope containing the claim for lien and affidavit and covering letter was mailed on July 30, and the forty-fifth day was August 10 (June 27-30 = 4 days + July = 31 days + Aug. 1-10 = 10 days = 45 days), and it is likely that the letter wended its way from Mr. Horowitz, (951 Carlaw), to Ms. Mitchell, (probably 951 Carlaw), to Ms. Bavington in the Office of the President, (probably one of the Scarborough campuses), between Thursday, July 31, or Friday, August 1, or Tuesday, August 5, when it likely entered the building, at 951 Carlaw Ave. having been mailed by registered mail on Wednesday, July 30, and August 10, the Construction Lien Act deadline date. (Note that July 30 was a Wednesday, July 31 was a Thursday, August 1 was a Friday, August 4 was a Monday, a statutory holiday, August 5-8 was Tuesday through Friday, and August 10 was a Sunday, so August 11, Monday, would, in fact, be the last day for preservation because of the Interpretation Act R.S.O. 1990, c. 1.11, s. 28 (h). So I find that, in all probability, the letter was received by the president's office on or before August 11, the statutory deadline.

36 But does any of this matter? In my view, it does not. Section 34 (3) provides that the copy of a claim for lien and affidavit of verification "shall" be given to the office prescribed by regulation.

Note the word "shall". O. Reg. 175, s. 1 uses the words "must be given". Note the word "must". Section 6 does not apply because s. 34 (1) and 34 (3) are not referred to in s. 6. And see Gillies Lumber Inc. v. Kubassek Holdings Ltd. (1999), 47 C.L.R. (2d) 1 (Ont. C.A.), atpp. 13-23.

Policy Reason Why Proper Address As Required by s. 34 (3) Must be Used

'Next; CAMAOA Copyright © Thomson Reuters Canada limited or its licensors (excluding individual court documents). All rights reserved.

37 Because of s. 16 (1) and (3), where the Crown or a Crown agency is the owner of the premises to which the services or the material were supplied, the lien does not attach to the premises but constitutes a charge upon the holdbacks and any other additional amounts, as provided in s. 21. The lien (charge) attaches to money in the hands of the owner and not to the land itself. Therefore, "giving" to, i.e., service of the claim for lien on, the owner, rather than registration against the land, is required. And further, one cannot have a sale of property owned by the Crown. One of the purposes of service of a copy of the claim for lien is to stop the payment out of money. It is important that the service be on the person who can take effective steps to stop any payment. In the case of these colleges, this person is the president of the college or his or her staff and advisors. It is important that the claim for lien be sent to his or her "office", a specific physical place within the institution itself.

A Strict or a Liberal Interpretation

38 I recently have had to address the question of whether a strict or a liberal interpretation is to be used when considering the procedure necessary to create a lien (which would include preservation) in the case of I.B.E. W Trust Fund, Local 353 v. 779857 Ontario Inc. [2004 CarswellOnt 2528 (Ont. Master)] in a judgment of mine dated June 18, 2004, in court file # 03-CV-245378.1 held there, relying on Ace Lumber Ltd. v. Clarkson Co. (1963), 36 D.L.R. (2d) 554 (S.C.C.), at pp. 557-558, and Timber Structures v. C. IV.S. Grinding & Machine Works (1951), 229 P.2d 623 (U.S. Or. S.C. 1951), at p. 629, quoted with approval by Ritchie J. in the Ace Lumber case at p. 558, and Kirsh's Guide to Construction

Liens in Ontario, 2 nd ed., Butterworths, atp. 4 and footnote 22, that a strict construction or interpretation approach is required when considering the provisions prescribing how a lien is to be created, i.e., by preserving and perfecting lien rights, (but, of course, subject to s. 6 where it applies).

39 I also here make reference to a further authority to the same effect, being the case of Ken Gordon Excavating Ltd. v. Edstan Construction Ltd., supra., where Estey J. quotes with approval the following statement from Mechanics' Liens

in Canada, Macklem and Bristow, 4td ed. (1978), at pp. 8-9 as follows:

. . . the Courts take the position that the Act, being of a remedial nature, should receive a liberal interpretation. This statement is supported by the provisions of the various provincial Interpretation Acts. However, a claimant who fails to follow the elementary and essential requirements for the creation and preservation of his lien will lose it because, as has also been pointed out, the Act, being in derogation of the common law, must be strictly construed in this respect. Once the lien has been created and preserved by registration, however, the enforcement of it is governed by the provisions of the Act designed to bring about such realization in as summary and expeditious a manner as possible.

40 Justice Estey went on to say, at p. 493;

It may be that the requirement of essential compliance with s. 21a [of the Mechanics' Lien Act R.S.O. 1970] in the giving of notice in the case of a public work imposes a hardship upon the supplier of goods and services to a construction project. The requirement of the Act, however, is clear and the remedy is legislative, not judicial.

Rule 16.08

41 Mr. Mannella also argued that rule 16.08 re: validating an improper service could apply and that I could make an order validating "service" of his claim for lien if it were found that his method of service was improper. In my view, rule 16.08 has no application to the question of proper preservation of a lien under s. 34 (1) and 34 (3) and O. Reg. 175, s. 1.3. These provisions are mandatory and statutory. Rule 16.08 applies to irregular service under the rules or a court order. Rule 16.08 is "inconsistent" with the Act and therefore, s. 67 (3) makes this rule inapplicable to the "giving" required by s. 34 (1) and 34 (3).

Decision


2004 CarswellOnt 3479, [2004] O.J. No. 3524, [2004] O.T.C. 760, 133 A.C.W.S. (3d) 394... " ”

'Next; CANADA Copyright (A Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

42 I therefore conclude that Dirm's lien was not properly preserved as the copy of the claim for lien and affidavit of verification was not "given" to "the office of the president" as required by the Act and Regulations but rather to "The Board of Governors of Centennial College". This was not good enough. (I have not considered the question of whether a lien would be properly preserved if it were sent addressed to "the office of the president" but to an address of the college that was not the proper address of the office of the president, here 951 Carlaw Ave. I strongly recommend that the correct address be ascertained and used.) The result in this case may seem harsh, but as Estey J. said in Ken Gordon Excavating Ltd. v. Edstan Construction Ltd., supra, "The requirement of the Act, however, is clear and the remedy is legislative, not judicial." One legislative remedy would be to include sections 34 (1), (2), (3) and (4), explicitly, in s. 6 so "minor irregularities" in preservation will not invalidate a claim for lien and actual prejudice could then be considered.

43 I therefore order that Dirm's lien as a charge upon the security posted which charge is created by s. 44 (6) (in lieu of the charge created under s. 16 (1) and (3), and s. 21, and s. 34 (l)(b)), is hereby discharged, and the Accountant shall deliver up the security to Dalton or its solicitors for cancellation.

44 Pursuant to s. 47 (1) of the C.L.A., (last two lines), and the case of Teepee Excavation & Grading Ltd. v. Niran Construction Ltd., supra, the personal contract action shall continue in order to determine the rights of Dirm, if any, under s. 63 of the Act, and all of the provisions of the Act shall continue to apply to the on-going action, including, in particular, s. 67 and Part X, Appeals.

The Complete Method of Preservation Actually Used By Bianchi's Solicitors

45 Bianchi's solicitors electronically registered its claim for lien on December 12, 2002 against the premises at 146 Kendal Ave. On the same day, it sent by registered mail three envelopes and it is the contents of two of these envelopes (to George Brown College) that are critical to the disposition of this motion.

46 The first envelope was addressed to Eastern Construction at its address at 505 Consumers Road and enclosed was a copy of the electronically registered lien plus copies of three separate letters, each dated December 12,2002, addressed both to Eastern, and to The Board of Governors of George Brown College at two addresses. The first letter merely advised of the electronic registration of a lien in the sum of $183,062.91 and demanded payment. The second letter requested information as to whether there was any type of payment bond posted for the project. The third letter requested the five items of information contemplated by s. 39 (1) l.of the C.L.A.

47 The second and third envelopes were addressed to "The Board of Governors of the George Brown College of Applied Arts and Technology, P.O. Box 1015, Station "B", Toronto M5T 2T9 and to The Board of Governors of the George Brown College of Applied Arts and Technology, 146 Kendal Ave, Toronto, M5R 1M3. Each of these envelopes firstly enclosed a copy of the electronically registered claim for lien. Secondly, each of these envelopes enclosed a copy of the three letters of December 12,2002, described above. All the letters were signed for Bianchi Presta by Dominic Presta. On the December 12, 2002 letter advising of the electronically registered claim for lien in the sum of $183,062.91, there are, under Mr. Presta's signature, his initials and the initials of the secretary who typed the letter, i.e., "DP:jc", and under those initials is to be found the word "Enclosure". The real question on this motion is what, in fact, was enclosed in the two envelopes addressed to the Board of Governors at the two addresses above noted.

The Material on Eastern's Motion

48 The moving party Eastern filed and served an affidavit of Bashar Amer, Director of Facilities Management for the George Brown College of Applied Arts and Technology. He deposes that on December 23, 2002, an envelope sent by registered mail was received by the office of the president enclosing, inter alia, a letter dated December 12,2002 from Bianchi Presta, addressed to the Board of Governors at P.O. Box 1015, Station "B", Toronto, M5T 2T9. This letter was the letter of December 12,2002, described above, which advised that an electronic lien had been registered in the amount of $183,062.91 against 146 Kendal Ave. and demanding payment within seven days.


2004 CarswellOnt 3479, [2004] O.J. No. 3524, [2004] OXC. 760, 133 A.C.W.S. (3d) 394... —

WestlawNext camaoa ;opyright ©; Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

49 Mr. Amer further deposes that on December 23, 2002, another envelope sent by registered mail was received by the office of the president enclosing, inter alia, a letter dated December 12, 2002, from Bianchi Presta, addressed to the Board of Governors at 146 Kendal Ave. M5R 1 M3. The text of this letter was identical to the text of the letter described in the immediately preceding paragraph.

50 Mr. Amer further deposes that each said envelope also enclosed a copy of the electronically registered claim for lien of Bianchi registered December 12,2002 as instrument # AT59633.

51 Mr. Amer further deposes that each said envelope also enclosed the two other letters of December 12, 2002 from Bianchi Presta to the Board of Governors requesting information about any payment bonds and requesting specific information pursuant to s. 39 (1) 1. of the C.L.A. as described above.

52 Mr. Amer further deposes that no further correspondence or documentation was received by the office of the president from the lien claimant Bianchi or its solicitors Bianchi Presta.

53 In the electronically registered claim for lien, the date of last of supply of services or materials is said to be November 6/02. Forty-five days next following November 6, excluding Saturdays and holidays, was Monday, December 23.

54 As I understand Eastern's counsel's argument, he does not complain about the fact that the envelopes were addressed to "The Board of Governors", etc. rather than to "The Office of the President", or that the said letters, that were actually received by the Office of the President at 200 King St. E., Room 588C, (St. James Campus) on December 23, were late. The address at King St. is the same for both the President and The Board of Governors according to the website. (It seems they were mailed, i.e., registered, on December 12 but it took eleven days for them to wend their way to the office of the president at 200 King St. E. There is no evidence as to what day they were received at 146 Kendal Ave. or at P.O. Box 1015, Station "B" but it doesn't matter since Eastern is not arguing lateness.) Eastern's website shows (judicial notice) that they have three campuses, Casa Loma (146 and 160 Kendal Ave.), St. James campus at 200 King St. E. and at Ryerson University.

55 Eastern's counsel is arguing that Bianchi failed to preserve its lien in accordance with sections 34 (1) and (3) of the C.L.A. because a copy of the claim for lien itself and the affidavit of verification, Forms 8 and 9 under O. Reg. 175, were not "given", i.e., mailed. Rather, only a copy of the electronically registered claim for lien without any affidavit was "given". This is the document authorized by the Land Registration Reform Act, R.S.O. 1990 c. L.4. (Where a lien attaches to premises, electronic registration without a sworn paper affidavit of verification is proper, as I noted in my judgment in Petroff Partnership Architects v. Mobius Corp. (2003), 29 C.L.R. (3d) 277 (Ont. Master).)

56 Counsel for Eastern relies on s. 16 (1) and (3), s. 1 (1) definition of "Crown", s. 3 (1), s. 34 (1) and (3), s. 87 (1) and s. 34 (6), "Affidavit of verification", of the C.L.A., and O. Reg. 175, s. 1.3.

57 When the motion was initially launched by Eastern, Mr. McLauchlin was of the view (as he advised on March 9/04) that the issues that had to be decided were whether George Brown College was a Crown agency so that preservation was governed by s. 34 (l)(b) and s. 34 (3), and not s. 34 (1), and whether sending a copy of the electronically registered lien instead of a copy of the claim for lien, Form 8, and a copy of the affidavit of verification, Form 9, was sufficient for proper preservation under s. 34 (l)(b) and (3). These are legal questions.

Bianchi's Response to the Motion

58 Bianchi filed an affidavit of Domenic Presta sworn March 8, 2004 in response to Eastern's motion. He was the responsible solicitor in this case. He has been practicing for 20 years and does extensive amounts of construction lien and construction law litigation. His affidavits states, in part, as follows;

4. It has always been my practice in lien litigation to forward a copy of the Claim for Lien, together with an Affidavit of Verification by registered mail to the owner of the subject lands, upon registration of the Claim for Lien.

Dirm Inc. v. Dalton Engineering & Construction Ltd., 2004 CarsweliOnt 3479

2004 CarswellOnt 3479, [2004] O.J. No. 3524, [2004] O.T.C. 760, 133 A.C.W.S. (3d) 394... ~

WeshawNextcANADA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents}. Ail rights reserved.

5. Notwithstanding the new registration process for liens under electronic registration, it is my practice to have the lien claimant execute the Claim for Lien and Affidavit of Verification as per the old process prior to electronic registration.

6. In this case, I caused my secretary, Joanne Caravaggio to prepare a Claim for Lien and an Affidavit of Verification for the Plaintiff, John Bianchi Grading, which was executed on December 11,2002, by the President of the Plaintiff Company, John Bianchi. Attached and marked as Exhibit "A" is a copy of said Claim for Line and Affidavit of Verification. I swore the jurat and my signature appears on the document.

7. The lien was registered against the subject lands on December 12, 2002, and upon registration, I instructed my secretary, Joanne Caravaggio to prepare the standard letters which I always send out upon registration of the lien.

8. Attached and marked as Exhibits "B", "C" and "D" respectively are copies of the three letters which were prepared on December 12, 2002, to be mailed to the owner, the Board of Governors of the George Brown College and to the General Contractor, Eastern Construction Company Limited.

9. As is my practice, I directed that the letter advising of the lien include both a copy of the electronic registration and the original Claim for Line and Affidavit of Verification. Please refer to Exhibit "C" above, which refers to the existence of an enclosure.

10. The enclosure referred to in that letter was a copy of the electronic registration, a true copy of which is marked as Exhibit "E", and the original Claim for lien and Affidavit of Verification, Exhibit "A" above. I signed all three letters and I confirm that said documents were attached to the Exhibit "C" letter.

11.1 am advised by my secretary, Joanne Caravaggio, and do verily believe that the three letters and attachments were mailed together in one envelop addressed to each of the indicated addressees on the letter. The fact that the three letters were received together is confirmed in the Affidavit of Bashar Amer filed by the Applicant, Eastern Construction in support of its motion.

59 Mr. Presta also deposes that no issue was taken as to the validity of Bianchi's lien, either by George Brown College or by Eastern, from December 20/02, when the lien was vacated by Eastern, until September 20/03, when Eastern's counsel raised the issue in a letter. There had been various steps taken in the action since December 20/02 including pleadings and the first construction lien pre-trial on May 2/03. (An "estoppel" argument was not advanced on the motion by Mr. Veltri, wisely in my view although there are two estoppel cases contained in Mr. Veltri's Book of Authorities.)

60 There are a large number of paragraphs (27-40) and exhibits (K-R) in the Presta affidavit that are irrelevant to the issue before me. Also, the plaintiffs "cross-motion" is unnecessary as it asks for "an order dismissing the motion", "an order declaring the lien properly preserved and valid", "an order declaring that the security posted should remain whatever the outcome", and "costs on a substantial indemnity basis". If Eastern's motion is dismissed, this cross-motion relief, other than costs, is not required to be given.

61 At the opening of argument on March 9/04, Bianchi's counsel sought to deliver another affidavit of Joanne Caravaggio sworn March 9/04. (An unsworn copy was in the served Bianchi Motion Record.) I permitted this sworn affidavit to be delivered late because of the counsel's explanation for its lateness. Joanne Caravaggio is Mr. Presta's secretary and has been so for 14 years. She deposes in her affidavit as follows:

3. It is Mr. Presta's practice, which I have followed through the course of my employment to send copies of the original Claim for Lien and Affidavit of Verification to all of the parties, namely the owner and general contractor, against whom the lien is made, once registration has occurred.

4. Under the electronic registration process, in addition to the original Claim for Lien and Affidavit of Verification, a copy of the electronically registered lien is also sent to the parties.



wNext -CANADA Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents), Al! rights reserved.



5. With respect to the matter of the John Bianchi Grading lien on George Brown College, I was secretary for Mr. Presta in December 2002.

6. At that time, Mr. Presta instructed me to prepare both the original Claim for lien and Affidavit of Verification and the electronic registration copy for execution by a representative of John Bianchi Grading.

7. On December 12, 2002, as per Mr. Presta's instructions, I electronically registered the Claim for Lien of John Bianchi Grading.

8.1 then prepared the standard letters which are always sent out to the owner and to the general contractor after the registration of lien, which letters were prepared by me on December 12, 2002. Said letters are attached and marked as Exhibit "A", "B" and "C", respectively to this my Affidavit.

9. In the letter marked as Exhibit "B" the "enclosure" is the copy of the Claim of Lien and Affidavit of Verification, together with a copy of the electronically registered lien.

10. I prepared the letters and attachments, and provided them to Mr. Presta for his signature. Once signed, they were sent out by me by registered mail to each of the addressees indicated on the letters.

62 I do not doubt that a Form 8 claim for lien and Form 9 affidavit of verification were prepared and signed and sworn as Mr. Presta states in paras. 5 and 6 of his affidavit as is shown in Exhibit "A" to his affidavit.

63 Joanne Caravaggio in her affidavit deposes as a fact that the "Enclosure" referred to at the bottom left corner of the first letter of December 12/02 (above described) included a copy of the claim for lien and the affidavit of verification plus a copy of the electronically registered claim for lien. She prepared and mailed the three envelopes on December 12/02, more than one year prior to the date of her affidavit of March 9/04 and yet she claims she remembers putting these particular claim for lien and affidavit of verification documents in these particular three envelopes. I note there is no description of what the "Enclosure" is, in the body of the first letter of December 12/02, and I also note that the word used is the singular, "Enclosure" rather than the plural, "Enclosures".

Disposition of the Motion on March 9/04

64 Counsel for Bianchi argued, as a preliminary point, that Eastern had no status or standing to attack the validity of the Bianchi lien on the basis of improper preservation and that only George Brown College could do so. But it was no longer a party defendant because Eastern had "bonded-off' the lien and I had earlier dismissed the action against George Brown College at the first construction lien pre-trial on May 2.1 disagreed with this submission and ruled that Eastern did have the legal right to attack the validity of Bianchi's lien (charge) under s. 47. Under the C.L.A., both a defendant owner and a defendant contractor, or any other lien claimant, can attack the validity of any plaintiff sub-contractor's lien.

65 Faced with what appeared to be a unexpected, critical factual dispute, I directed both counsel to attend at the President of George Brown College's office to inspect the actual file containing Mr. Presta's actual letters so they could together determine exactly what the enclosures were. (Counsel's initial suggestion was for cross-examination of Mr. Presta and Ms. Caravaggio or for a rule 36 examination of the President or his executive assistant or whoever controls the George Brown College files where these letters are kept but I felt my suggestion was more practical, effective, and cost- efficient.) I adjourned the motion sine die awaiting the results of the inspection. (Later, a new date for the continuation of the motion was fixed for May 19/04.)

66 On April 1, 2004,1 was advised by counsel for Eastern, by fax, with a copy to counsel for Bianchi, that on March 12, 2004, counsel for Eastern and Bianchi attended at George Brown College's archives located at 500 MacPherson Ave., Toronto. They were met at the archives by the said Mr. Bashar Amer, the Director of Facilities Management for the George Brown College and Mr. Robert W. Macaulay, Chief Archivist for the College and they reviewed the file as presented to them by Mr. Amer and Mr. Macaulay.

tawNeXfc-CWMAOA Copyright <& Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

_______ —

The April 19/04 Telephone Conference and Directions

67 In a telephone conference of April 19/04 with both counsel, I was advised that the inspection had taken place but counsel were still disputing how to proceed and what were the facts. I directed that there would be no cross-examination on the Presta affidavit of March 8/04 because I felt it would be useless. Mr. Presta only deposed as to his "usual practice". But I wanted both counsel to provide me in writing with the information as to what documents were found in the George Brown College file. I was advised in a fax letter of April 23, 2004 (which is now part of the material on this motion and is attached to Eastern's motion record) that upon the collective review of the college file, counsel found the following documentation:

1. The original letter of Bianchi Presta LLP, dated December 12, 2002, directed to the Board of Governors of the College at a P.O. Box. The letter bears the original signature of Mr. Dominic Presta and advises that Bianchi Presta LLP has electronically registered a Claim for Line on behalf of Bianchi. The letter bears the original date stamp of the Office of the President of the College (as identified by Mr. Amer) of December 23, 2002.

2. A copy of the electronically registered Claim for Lien of Bianchi.

3. The original letter of Bianchi Presta LLP, dated December 12, 2002, directed to the Board of Governors of the College at the P.O. Box. The letter bears the original signature of Mr. Dominic Presta and requests that the College provide information with respect to any Labour and Material Payment Bonds posted in relation to the project.

4. The original letter of Bianchi Presta LLP, dated December 12, 200, directed to the Board of Governors of the College at the P.O. Box. The letter bears the original signature of Mr. Dominic Presta and requests that the College provide a response to a Section 39 Request for Information.

5. The original letter of Bianchi Presta LLP, dated December 12, 2002, directed to the Board of Governors of the College at the Kendal Avenue address. The letter bears the original signature of Mr. Dominic Presta and advises that Bianchi Presta LLP has electronically registered a Claim for Lin on behalf of Bianchi. The letter bears the original date stamp of the Office of the President of the College (as identified by Mr. Amer) of December 23, 2002.

6. A copy of the electronically registered Claim for lien of Bianchi.

7. The original letter of Bianchi Presta LLP, dated December 12, 2002, directed to the Board of Governors of the College at the Kendal Avenue address. The letter bears the original signature of Mr. Dominic Presta and requests that the College provide information with respect to any Labour and Material Payment Bonds posted in relation to the project.

8. The original letter of Bianchi Presta LLP, dated December 12, 2002, directed to the Board of Governors of the College at the Kendal Avenue address. The letter bears the original signature of Mr. Dominic Presta and requests that the College provide a response to a Section 39 Request for Information."

68 This letter of April 23, 2004 also confirms that Mr. McLauchlin has provided a copy of the said April 23/04 letter to counsel for Bianchi in draft form for his approval and that both counsel "are in agreement as to the current contents of the College's file."

69 In this telephone conference of April 19,1 granted leave to counsel for Eastern to deliver any further affidavit(s) as he may be advised including any response to paras. 4-11 of the Presta affidavit and paras. 3-10 of the Caravaggio affidavit. If plaintiffs counsel wanted to cross-examine on any such new affidavit material and counsel could not agree, I would resolve any dispute by further telephone conference. (Counsel for Eastern was to use best efforts to have any new material served by the end of April as the motion was scheduled to resume on May 19/04.) Two new affidavits were served and filed.


>:!: cakapa Copyright <e> Thomson Reuters Canada Limited or its licensors (excluding individual court documents). Ail rights reserved.

70 The first new affidavit (sworn April 23/04) was an affidavit from Ronald J. Littlejohns, the Vice-President, Finance, of Eastern. In paras. 2-5, he repeats directly what Ms. Becker deposed on information and belief in her affidavit of March 2/04 that he had told her, about what material Eastern received from Bianchi in the registered envelope of December 12/02.

71 He then, in paras. 6-9, sets forth information relating to another lien claimant, Oakdale Dry wall, who was also a sub-contractor of Eastern on the George Brown College project, and for whom Bianchi Presta also acted. He describes a registered letter received from Bianchi Presta dated December 11, 2003, (one year following the Bianchi Presta letters of December 12, 2002 ), re this Oakdale lien claim and its contents and, in effect, says it contained the same type of enclosures as the Bianchi letters of December 12/02 re its lien claim and specifically did not enclose a copy of the claim for lien and affidavit of verification but only a copy of the electronically registered lien. (But it is important to note that for preservation under s. 34 (1) and (3), Eastern, the contractor, did not have to be "given" a copy of the claim for lien and affidavit of verification but only the "owner", George Brown College, did.)

72 The second new affidavit was another affidavit of the said Bashar Amer, sworn May 14/04. He also sets forth information relating to this new lien claimant, Oakdale Drywall. He describes envelopes that were sent by Bianchi Presta, by registered mail, and by courier, and by fax, each with an enclosed letter dated December 4,2003, directed to the Office of the President of George Brown College at 200 King St. E. Suite 588C, Toronto, M5A 3W8 and to The Board of Governors of George Brown College at the same address. Each of these letters also enclosed not only the electronically registered claim for lien but the paper claim for lien, Form 8, together with the supporting affidavit of verification, Form 9, with a reference to the sending being in accordance with s. 34 (3) of the C.L.A.

73 The obvious purpose of, in particular, this new Bashar Amer affidavit is to show that in December of 2003, (which I note is one year following the purported preservation of the Bianchi lien and well after the issue of the invalidity of preservation of the Bianchi lien was first raised by Eastern's counsel on September 30, 2003) the solicitors for Bianchi had changed their procedure for preservation and did so in respect of this Oakdale lien, following the procedure that Mr. McLauchlin is arguing should have been followed in relation to the Bianchi lien. In effect, the argument is that Bianchi's solicitors now implicitly admit that the earlier procedure they followed for preservation of the Bianchi lien was improper because they have changed their procedure in respect of the Oakdale lien.

74 In my view, the issue before me is to be decided based on what Bianchi's solicitors did on December 12, 2002 in relation to the Bianchi lien, and this new procedure that they have apparently adopted in relation to the Oakdale lien is totally irrelevant to the issue I have to decide. I put no reliance on either of these new affidavits.

The Continuation of the Motion on May 19/2004

75 Mr. McLauchlin argued that the critical question on his motion was now a question of fact rather than questions of law as he initially thought was the case. The factual question is whether a copy of the claim for lien and the affidavit of verification were enclosed with the letters of December 12/02, as required by s. 34 (l)(b) and s. 34 (3) of the C.L.A. He argued that, factually, I should prefer what was found in the George Brown College file (archive) during the March 12/04 inspection, (detailed above), rather than what is deposed to by Joanne Caravaggio in paras. 9 and 10 of her affidavit of March 9/04, and in para. 10 of the Presta affidavit. He argued that it is unbelievable that a legal secretary could remember, more than one year later, what specific documents she put in a particular envelope when the only reference to what is enclosed is the word "Enclosure". He argued that I should find, as a fact, that only a copy of the electronically registered lien was enclosed and that a copy of the "paper" claim for lien, Form 8, and the required affidavit of verification, Form 9, were not.

76 He argued that it is clear that George Brown College is a Crown agency, that strict compliance for preservation of a lien is required relying on the Ace Lumber case, supra, that Bianchi didn't strictly comply with s. 34 (l)(b) and s. 34


2004 CarswellOnt 3479, [2004] O.J. No. 3524, [2004] O.T.C. 760, 133 A.C.W.S. (3d) 394... ——

15.t CANAd-a Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.


2004 CarswellOnt 3479, [2004] O.J. No. 3524, [2004] O.T.C. 760, 133 A.C.W.S. (3d) 394... —

(3), and that therefore, the lien is invalid and should be discharged and the security posted returned to Eastern. He was content for the action to continue before me as an ordinary contract action to determine rights under s. 63 of the C.L.A.

77 He further argued that it is a fair inference to be drawn from the Presta affidavit that Presta did not turn his mind actively to whether George Brown College is a Crown agency and whether the procedure in sections 34 (l)(b) and 34 (3) had to be followed. Presta just followed his usual practice in lien litigation — see para. 4 of his affidavit. He does not say he decided to follow both procedures laid down in s. 34 (l)(a) and (b) because he wasn't sure which one applied. Mr. McLauchlin argued that the evidence is clear that Mr. Presta never turned his mind to the question. All this is relevant to making a finding as to what documents were put in the envelopes, and what the secretary was told to do, and what she did.

78 Mr. McLauchlin relied on the case of Graham Mining Ltd. v. Rapid-Eau Technologies Inc. (2000), 7 C.L.R. (3d) 279 (Ont. S.C.J.), at para.'s 6(C), and para.'s 42-60. He relied on the statement, in para. 45, that once a party has raised an issue as to the sufficiency of the notice served by the lien claimant, the onus shifts to the lien claimant to prove that the lien was preserved. Failure to satisfy that onus will result in the lien being lost. (In that case, the court could not decide, on the evidence presented, whether the Crown was an owner so the judge could not decide whether sections 31 and 34 were complied with so he sent the case on to trial.

The Argument of Bianchi's Counsel

79 Mr. Veltri argued that what was found to exist in the George Brown College file (archive) on the joint inspection is not what Mr. Presta sent out. The letters were sent to "The Board" and not to Mr. Amer so Mr. Amer's showing counsel what was in the file is not conclusive. He argued that perhaps the paper claim for lien and affidavit of verification were lost as they travelled internally from 146 Kendal Ave. and P.O. Box 1015, Station "B" to 200 King St. E. to 500 MacPherson Ave. He relied on para. 10 of the Presta affidavit and paras. 9 and 10 of the Caravaggio affidavit. He argued that Bianchi has met the onus of proving, on the balance of probabilities, that the lien was properly preserved.

80 He further argued that even if I were to find that only the electronically registered copy of the lien was "given" under sections 34 (l)(b), 34 (3), and 87, the sending of this particular document to the owner, George Brown College, was good enough, now that Ontario has electronic registration. He relied on Petroff Partnership Architects v. Mobius Corp., supra. I disagree. Petroff Partnership Architects was dealing with preservation under s. 34 (l)(a), i.e., registration in the proper land registry office. This brings into operation s. 24 (1) and (2) of the Land Registration Reform Act, R.S.O. 1990, c. L.4. But that Act does not apply to preservation under s. 34 (l)(b) of the C.L.A.

81 He further argued that the copy of the electronically registered lien that was "given" to the owner has all the information required by sections 34 (5) and 34 (6) of the C.L.A. There is a statement under the "Claimant(s)" field saying "I, John Bianchi, am the agent of the lien claimant and have informed myself of the facts stated in the claim for lien and believe them to be true." He argued that the only thing missing is the signature of a commissioner. He relied on Zemelman v. Feder (2001), 13 C.L.R. (3d) 84 (Ont. Div. Ct.). I disagree. The facts in that case are totally different. Zemelman has no application to this issue.

The above-quoted statement in the electronically registered lien is not an affidavit of verification as required by s. 34 (6).

82 He asked why "e-reg" should be satisfactory for preservation under s. 34 (l)(a) but not if the owner is the Crown or a Crown agency. He argued that this was not reasonable. I disagree. The requirement is statutory. Reasonableness has nothing to do with it.

83 He further argued that "nobody was mislead" and that George Brown College is not complaining. It is only a matter of form and not substance. He relied on Carlo's Electric Ltd. v. Metropolitan Separate School Board (1990), 40 C.L.R. 26 (Ont. Master) and Edgecon Construction Inc. v. All Saints Church Homes for Tomorrow Society (1995), 18 C.L.R. (3d) 254 (Ont. Master). These cases have no application here. Again, the factor that no one was mislead is irrelevant to the issue of these statutory requirements.

/vNext, CANADA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

84 Mr. Veltri cited the case of Re Hillsboro Construction Ltd., Re, [1987] P.E.I.J. No. 12(P.E.I. S.C.), No. B-787, but I do not think this case has any application to the issues before me.

85 My notes of the argument indicate that Mr. Veltri conceded that George Brown College is a Crown agency even though paras. 11-14 of his Factum argue otherwise. I rely on the oral submissions made to me in open court.

Decision

86 I therefore find that Bianchi's lien was not properly preserved under sections 34 (l)(b) and 34 (3) of the C.L.A. because a copy of the claim for lien document and the affidavit of verification document were not "given" to the owner, a Crown agency, as required by sections 34 (l)(b) and 34 (3) and were not, in fact, in the envelopes and letters sent to the owner. This is one of the few s. 47 motions where even though there is a factual dispute, factual findings can be made without a trial. I rely on s. 67 (1) which directs me to proceed in as summary a way as is possible, having regard to, inter alia, the nature of the liens in question.

87 In Mr. McLauchlin's reply portion of his argument, he raised the problem of the envelopes and letters being sent to "The Board of Governors" rather than "to the Office of the President" although he admits that the envelopes and letters did reach the Office of the President in time. He also raised the problem of the envelopes and letters being addressed to the wrong addresses at 146 Kendal Ave. and P.O. Box 1015, Station "B" rather than to 200 King St. E., Suite 588C, being the address of the President's Office. Firstly, I am not satisfied that P.O. Box 1015, Station "B" was the wrong address. That is the mailing address on George Brown College's website. Secondly, I am not basing my decision on either of these submissions. The whole focus of this motion was on what was sent rather than to whom or where. I rely for my disposition of the Bianchi motion only on what was and what was not inside the envelopes rather than what was on the outside of the envelopes as in Dirm. The critical facts in the Bianchi record are quite different than the critical facts in the Dirm record.

88 I therefore order that Bianchi's lien as a charge on the security posted is also discharged and the Accountant shall deliver up the security to Eastern or its solicitors for cancellation.

89 As in Dirm above, and pursuant to s. 47 (1) and Teepee Excavation & Grading Ltd. (supra), the personal contract action shall continue in order to determine the rights of Bianchi, if any, under s. 63 of the Act, and all the provisions of the Act shall continue to apply to the on-going action, including, in particular, s. 67 and Part X, Appeals.

90 As to costs, I think costs should follow the event in the usual way, payable by each plaintiff to each defendant forthwith. If counsel are unable to agree as to quantum, I will schedule a hearing to fix costs. If a hearing is required, I am to be faxed to schedule one. The defendants shall each prepare, serve and file a Bill of Costs in accordance with the Costs Grid. If quantum is disputed for both motions, I hope to be able to schedule one hearing date to deal with both disputes at the same time. There will be two formal orders issued, one in each action, dealing with each motion.

Motions granted.


2004 CarswollOnt 3479,12004] O.J. No. 3524, [2004] O.T.C. 760, 133 A.C.W.S. (3d) 394...

End of Document Copyright ©Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rightsreserved.

Nvvt: Canada Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

TAB “4”

Pa/o. 98Govan Brown & Associates Ltd. v, Equinox 199 Bay Street Co., 2014 ONSC 3924, 2014...2014 ONSC 3924, 2014 CarswellOnt 8856, 242 A.C.W.S; (3d) 21, 33 Cl.R. (4th) 78


Govan Brown & Associates Ltd. v. Equinox 199 Bay Street Co.

2014 CarswellOnt 8856, 2014 ONSC 3924, 242 A.C.W.S. (3d) 21, 33 C.L.R. (4th) 78

Govan Brown & Associates Limited v Equinox 199 Bay Street Co.; Equinox Holdings/Eclipse Development, Equinox

Fitness Center CCW, Equinox Investment Holdings Inc.,Equinox V Holdings Limited and BCIMC Realty Corporation

Black & McDonald Limited v BCIMC Realty Corporation, Govan Brown & Associates Ltd., Equinox Holdings Inc, Equinox Fitness Centre, CCW, Equinox Holdings/Eclipse

Developments, Equinox Investment Holdings Inc. and Equinox Holdings Limited

Gem Campbell Terrazzo & Tile Inc. v Equinox 199 Bay St. Co. and Equinox Yorkville Co. cob as Equinox Fitness Clubs aka Equinox Holdings aka Eclipse Developments and Govan Brown & Associates Limited

Master C. Albert

Heard: March 20, 2014; April 4, 2014 Judgment: June 26,2014

Docket: CV-13-484815, CV-13-483890, CV-13-485191

Counsel: R. Shastry, D. Winer, for Plaintiff, Govan Brown in action CV-13-484815 C. DiMarco, for Plaintiff, Black & McDonald in action CV-13-483890 C. Skipper, R. Spinks, for Plaintiff, Gem Campbell in action CV-13-485191 G. Ackerley, G. Brown, for Equinox defendants in all three actions M. McGraw, for Defendant, BCIMC Realty Corporation


MOTIONS by owner to declare invalid and discharge construction lien claims; CROSS-MOTIONS by lien claimants to add or correctly name defendant, and for declaration of substantial date of completion.

Master C. Albert:

1 Equinox 199 Bay Street Co. ("Equinox 199") asks the court to declare invalid and discharge three construction lien

claims that total $6,062,640.93, and to return to Equinox 199 security of $3,800,203.221 posted to vacate the liens. The motions are brought under section 47 of the Construction Lien Act, R.S.O. 1990, c.C.30 (the "Act") on the basis that the lien claimants failed to correctly identify the owner of the premises in their claims for lien. The targeted liens are:

a) The lien claim registered by Govan Brown & Associates Limited against PIN 21407-0005 on June 10, 2013 as instrument AT3320218 for $4,953,604.61;

b) The hen claim registered by Black & McDonald Limited against PIN 21407-0005 on June 10, 2013 as instrument AT3320812 for $570,000.00; and

c) The hen claim registered by Gem Campbell Terrazzo & Tile Inc. against PIN 21407-0005 on June 7, 2013 as instrument AT3319348 for $539,036.32.

'Next CANADA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

2 The lien claimants bring cross-motions to amend their pleadings to add or correctly name Equinox 199 as a defendant, to make the necessary changes that flow from that amendment and in one case to declare the date of substantial completion:

a) Govan Brown seeks to add "Equinox Holdings, Inc." as a party and to amend its pleading in the form attached as Appendix "A" to its notice of motion. Govan Brown also moves for a declaration that the contract was substantially completed on April 29, 2013.

b) Black & McDonald seeks to substitute "Equinox 199 Bay Street Co." for "Equinox" in its pleadings, increase its claim in contract by $109,000.00 and amend its pleading in the form of the draft Amended Statement of Claim filed at Tab "N" of its motion record.

c) Gem Campbell seeks to substitute "Equinox Holdings, Inc." for "Equinox" in its pleading and amend its pleading in the form of the draft Amended Statement of Claim appended to its Cross-Motion Record as Schedule "A".

The Issues

3 Issue #1: The main issue is whether the lien claims are invalidated because the lien claimants failed to strictly comply with subsection 34(5) of the Act by failing to name Equinox 199 as the owner against whose interest the liens are claimed, and whether section 6 of the Act saves any or all of the lien claims:

a) In the motion by Equinox 199 against Govan Brown the issue is whether naming Equinox Holdings/Eclipse Development in the lien claim as the person to whom services and materials were supplied, instead of as owner, is fatal;

b) In the motion by Equinox 199 against Black & McDonald the issue is whether naming Equinox Holdings Inc./ Eclipse Developments in the statement that describes the services and materials supplied, instead of in the statement that names the owner, is fatal; and

c) In the motion by Equinox 199 against Gem Campbell, the issue is whether naming Equinox Yorkville Co. as owner in the lien claim instead of Equinox 199 is fatal.

4 Issue #2: Should the proposed party and pleading amendments be permitted?

5 Issue #3: What is the date of substantial completion?

6 Whether the owner of the fee simple, BCIMC Realty Corporation ("BCIMC"), is a statutory owner for purposes of these lien claims, raised by Govan Brown in its motion materials, was withdrawn as an issue on these motions without prejudice to raising it at a later date.

7 In these reasons, I use the short forms "Equinox 199" for Equinox 199 Bay Street Co. and "Equinox" when referring to all Equinox entities.

Background

8 BCIMC is the registered owner of the commercial and retail office building known as Commerce Court West ("CCW"). By lease agreement dated April 12, 2012 Equinox 199 contracted with BCIMC to lease the second and third floors of CCW for a fitness club for a 16 year term. The lease is not registered on title.

9 Improvements were required to build out the space for this use and Equinox 199 embarked on an improvement project (the "project").

Govan Brown & Associates Ltd. v. Equinox 199 Bay Street Co., 2014 ONSC 3924, 2014...2014 ONSC 3924, 2014 CarswellOnt 8856, 242 A.C.W.S. (3d) 21,33 C.l .R. (4th) 78 ' ‘ "

itiawNext ■ Canada Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

10 Equinox 199 contracted with Govan Brown on October 26, 2012 to act as construction manager for the project. Rather than contracting in its registered corporate name, Equinox 199 executed the contract using the name "Equinox Holdings/Eclipse Developments", defined as "owner" in the Govan Brown contract. The printed name of the person who signed the contract on behalf of these unincorporated entities is Khidir Abdalla, identified as "V.P.", although it is unclear of what he is "V.P.". The contract was not signed under corporate seal.

11 Govan Brown contracted with Black & McDonald on October 4, 2012 to supply electrical and lighting services and materials to the project. This subcontract refers to and defines "Equinox Holdings/Eclipse Developments" as owner of the premises.

12 Govan Brown contracted with Gem Campbell on October 4, 2012 to supply tile, stone and cork flooring to the project. The subcontract refers to and defines "Equinox Holdings/ Eclipse Developments" as owner of the premises.

13 Equinox Holdings/Eclipse Developments is neither a registered company nor a registered business name in Canada under the Business Names Act, R.S.O. 1990, c.B.17 which prohibits a corporation from carrying on business in a name other than a registered name.

14 On June 7, 2013 Gem Campbell electronically registered a lien claim for $539,036.32. Under "statements" Gem Campbell states:

Name and address of Owner BCIMC Realty Corporation, 925 West George Street, Suite 1600, Vancouver, British Columbia, V6C 3L2 (See Schedule). Name and address of person to whom lien claimant supplied services or materials GOVAN BROWN & ASSOCIATES LIMITED, 555 Richmond Street West, P.O. Box 105, Suite 1208, Toronto, Ontario, M5V 3B1 Time within which services or materials were supplied from 2012/12/20 to 2013/04/27 Short description of services or materials that have been supplied Supply and installation of tile, stone and cork flooring Contract price or subcontract price $967,938.79, including HST Amount claimed as owing in respect of services or materials that have been supplied $539,036.32 including HST.

The lien claimant claims a lien against the interest of every person identified as an owner of the premises in said PIN to this hen

Schedule: Name and address of Additional Owner: Equinox Y orkville Co. c.o.b. Equinox Fitness Clubs, 1959 Upper Water Street, P.O.Box 997, Suite 900, Halifax, Nova Scotia, B3J 3N2.

15 On June 10,2013 Govan Brown electronically registered a lien claim for $4,953,604.61. Under "statements" Govan Brown states:

Name and address of Owner BCIMC Realty Corporation, 9 th floor, 25 King West, Toronto, Ontario M5L 1R3.

Name and address of person to whom lien claimant supplied services or materials Equinox Holdings/Eclipse

Development, 895 Broadway, 3 rd Floor, New York, NY 1003. Time within which services or materials were supplied from 2012/10/05 to 2013/04/29 Short description of services or materials that have been supplied Interior

renovations on 2nd and 3rd Floors. Contract price or subcontract price $9,169,484.44. Amount claimed as owing in respect of services or materials that have been supplied $4,953,604.61.

The lien claimant claims a lien against the interest of every person identified as an owner of the premises described in said PIN to this lien.

16 On June 10, 2013 Black & McDonald electronically registered a lien claim for $570,000.00. Under "statements" Black & McDonald states:

Govan Brown & Associates Ltd. v, Equinox 199 Bay Street Co., 2014 ONSC 3924, 2014...2014 ONSC 3924, 2014 CarswellOnt 8856, 242 A.C.W.S. (3d) 21, 33 C.L.R. (4th) 78 '

WSStlawNexfe. cAnaoa Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All right* reserved.

Name and address of Owner BCIMC Realty Corporation, 925 West George Street, Suite 1600, Vancouver, B.C., V6C 3L2 Name and address of person to whom lien claimant supplied services or materials Govan Brown & Associates Ltd., 555 Richmond Street West, Suite 1208, Toronto, Ontario, M5V 3B1 Time within which services or materials were supplied from 2012/09/01 to 2013/05/23 Short description of services or materials that have been supplied supply and installation of electrical power and lighting systems to Equinox Holdings Inc./Eclipse Developments for the Equinox Fitness Centre CCW Project. Contract price or subcontract price $1,584,079.30 Amount claimed as owing in respect of services or materials that have been supplied $570,000.00

The lien claimant claims a hen against the interest of every person identified as an owner of the premises in said PIN to this lien

17 Black & McDonald also prepared a paper copy of its claim for lien in Form 8, the form prescribed under the Act but not acceptable for electronic filing. This version of its lien claim identifies multiple Equinox entities as owner, but no evidence was filed to prove that this form of the claim for lien was served on Equinox. Black & McDonald manager Michael Vulcan, in his affidavit, is silent on what his company did with the Form 8 version of its claim for lien. He

deposes: “

12. On June 10, 2013 Black & McDonald registered a claim for lien as Instrument No. AT3320812 against title to the premises. Attached as Exhibit "D" to this Affidavit is a copy of Black & McDonald's sworn claim for lien, which names the following owners: bcIMC Realty Corporation Equinox and Equinox Holdings/Eclipse Developments and Equinox Fitness Center CCW and Equinox Holdings, Inc. and Equinox V Holdings Limited and Equinox Investment Holdings Inc. Also attached as Exhibit "E" to this Affidavit is a copy of Black & McDonald's claim for lien registered as Instrument no. AT3340812...

18 On June 18, 2013 counsel for BCIMC sent a letter to Govan Brown and Gem Campbell directly and to Black & McDonald's counsel, advising them that BCIMC has no contractual relationship with any of the lien claimants and that BCIMC, in its capacity as landlord, was never served with notice under section 19 of the Act. BCIMC further advised the lien claimants that the tenant of the premises is Equinox 199 Bay Street Co.

19 On July 2, 2013 the registered lien claims were vacated upon Equinox 199 posting security in the form of lien bonds as follows:

Govan Brown & Associates Ltd. v, Equinox 199 Bay Street Co., 2014 ONSC 3924, 2014...2014 ONSC 3924, 2014 CarswellOnt 8856, ?42 A.C.W.S. (3d) 21, 33 C.L.R. (4th) 78

Lien claimant Security for the lien Security for costs Account number Court file No.Govan Brown $2,541,166.90 3 $50,000.00 527290 CV-13-483827Black & McDonald $570,000.00 $50,000.00 527293 CV-13-483830Gem Campbell $539,036.32 $50,000.00 527294 CV-13-483836

Issue #1: Are the Claims for Lien Valid?

20 The three lien claims in issue each identify at least one Equinox entity in the "Statements" portion of the registered lien claim, either as "the person to whom lien claimant supplied services or materials", or in the description of services and materials supplied or in the space to name the owner. The errors made by the lien claimants fall into two categories:

a) The lien claimant named Equinox in the wrong part of the statements on the form registered electronically (Govan Brown and Black & McDonald); and

b) The lien claimant named an Equinox entity (or non-entity) other than Equinox 199 in the claim for lien (all three lien claimants).

The form of a claim for lien required by the Construction Lien Act

:w/Next>. CANADA1 Copyright © Thomson Reuters Canada Unified or its licensors (excluding individual court documents). Ail rights reserved.

21 Section 34 of the Act provides:

34. (1) A lien may be preserved during the supplying of services or materials or at any time before it expires, (a) where the lien attaches to the premises, by the registration in the proper land registry office of a claim for lien on the title of the premises in accordance with this Part...

(5) Every claim for lien shall set out,

(a) the name and address for service of the person claiming the lien and the name and address of the owner of the premises and of the person for whom the services or materials were supplied and the time within which those services or materials were supplied


88. Regulations — The Lieutenant Governor in Council may make regulations,

(a) prescribing forms and providing for their use.

23 Ontario Regulation 175, R.R.O. 1990 provides at section 2:

2(8) A claim for lien under section 34 of the Act shall be in Form 8. (Attaches as Appendix "A")


No certificate, declaration or claim for lien is invalidated by reason only of a failure to comply strictly with subsection 32 (2) or (5), subsection 33 (1) or subsection 34 (5), unless in the opinion of the court a person has been prejudiced thereby, and then only to the extent of the prejudice suffered.

25 With the introduction of electronic registration the prescribed Form 8 was altered for expediency to meet the needs of the electronic world. In the prescribed Form 8 there is a line to identify the owner and a separate line to name the person to whom the lien claimant supplied services or materials. In the electronic version of the form these two statements are merged under the umbrella heading "statements". The Act was not amended to replace the prescribed form with the altered version developed for electronic registration.

26 Under the heading "Statements" the electronic claim for lien form requires the lien claimant to state:

Name and Address of Owner

Name and address of person to whom lien claimant supplied services or materials

Time within which services or materials were supplied

Short description of services or materials that have been supplied

Amount claimed as owing in respect of services or materials that have been supplied

27 Andrew Heal, affiant for Black & McDonald, deposes that with electronic registration the claim for lien form self-populates upon entering the PIN number for a property so that in the present case, upon entering the PIN number the legal description self-populates with BCIMC as the owner of the property. That may be so, but the electronic form of the claim for lien also provides space in the "statements" portion of the form to add other persons as owners against whose interest a lien is claimed.

Does naming the owner in the wrong part of the "statements" invalidate the claim for lien?

Govan Brown & Associates Ltd. v. Equinox 199 Bay Street Co., 2014 ONSC 3924, 2014...2014 ONSC 3924, 2014 CarswcllOnt 8856, 242 A.C.W.a (3d) 21, 33 C.L.R. (4th) 78 “~ ~

WestlawNexts-CANADA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

Govan Brown & Associates Ltd. v. Equinox 199 Bay Street Co., 2014 ONSC 3924, 2014...

2014 ONSC 3924, 2014 CarswellOnt 8856, 242 A.C.W.S. (3d) 21, 33 C.L.R. (4th) 78 ... :

28 A lien claim that fails to comply with the requirements of subsection 34(5) of the Act is invalid. But if it is merely a failure to "strictly" comply then absent prejudice the lien claim remains valid unless the court determines that it is invalid

due to prejudice 4. The test is one of degree. So the real question on each of these motions is whether the failure to name Equinox 199 as an owner in the "statements" section of the electronically registered claims for lien is a failure to comply or a failure to "strictly" comply with the requirements of subsection 34(5).

29 In Williams & Prior Ltd. v. Taskon Construction Ltd.,5 Master Sandler considered whether failure to name Hugo Boss, a tenant, as the owner or at all in a claim for lien could be cured by section 6 of the Act. In that case 3799808 Canada Inc. c.o.b. as Hugo Boss ("379") had hired contractors to carry out improvements to its leased retail store. Two contractors registered lien claims but failed to name 379 or Hugo Boss as owner as required by section 34(5)(a) of the Act. Neither lien claim mentioned 379 or Hugo Boss anywhere in their claims for lien, either as owner or in any other

capacity.6 Nor did the hen claimants describe the space leased by 379 for the retail store.

30 Master Sandler found that both lien claimants knew that they were supplying materials and services to improve leased premises, whether or not the identity of the tenant was known. He noted that a lien claimant "...has a lien upon the interest of the owner in the premises improved...". The claim is against the owner's interest in the premises, not the premises itself: section 14 of the Act. In the present case, the lien claims, if valid, are against Equinox 199's 16 year leasehold interest in the premises.

31 Master Sandler determined in Williams & Prior that where the owner is a tenant the name of the tenant must be set out in the claim for lien, and if the tenant owner's name and address are not known to the lien claimant then descriptive words such as "Hugo Boss store, suite 108, as tenant" must be used to describe the premises. Had that been done then, according to Master Sandler, the curative provisions of section 6 of the Act would have applied to replace the descriptive words with the correct legal name of the tenant once it became known.

32 Master Sandler's rationale in Williams & Prior is that a tenant of leased premises must be able to ascertain from the lien claim that its leasehold interest is being liened. If the lien claim is silent as to any description of the tenant and the leased premises then the tenant will not know whether the interest being liened is its own leasehold premises or that of a neighbouring tenant. That is why Master Sandler remarked that even if the name of the tenant is not known to the lien claimant there must be some description, such as "Hugo Boss, suite 108" that permits the leasehold tenant to identify that the lien claim is against its interest.

33 In Master Sandler's opinion the failure to name 379 or Hugo Boss or describe the leased premises in the claim for lien was not a minor or technical irregularity. It was more than a failure to "strictly" comply. It was a serious error. Had it been a minor or technical irregularity then it could have been cured by applying section 6 of the Act, absent prejudice. Master Sandler stated at paragraph 75:

The total omission to make any allegation against 379 in either of the claims for lien and to preserve these liens against 379's interest in the premises, within the statutory 45 days of last supply, is an extremely serious error. It is neither minor nor technical but rather a fundamental error in the assertion of a valid claim for lien against 379's interest in these 'premises'.

34 Williams & Prior is distinguishable from the lien claims before me. In Williams <£ Prior the tenant, 379, was not mentioned anywhere in the claims for lien. In the three lien claims that are the subject of these motions Equinox is identified as follows:

i) Gem Campbell's lien claim identifies Equinox as owner, but instead of naming Equinox 199 the lien claimant names Equinox Yorkville Co. c.o.b. Equinox Fitness Clubs, with the Nova Scotia address of the corporation.

•/N ext - CANADA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

ii) Govan Brown's lien claim identifies Equinox Holdings/Eclipse Development in the "statements" portion of the

lien claim as the person to whom it supplied services or materials. The premises is correctly identified as the 2 nd

and 3 rd floors of 199 Bay Street at 25 King Street West.

iii) Black & McDonald's lien claim names Equinox not as owner or as the person to whom services or materials were supplied but rather in the "statements" portion of the lien claim describing the services or materials supplied. The lien claim is clear on its face that the lien claimant is asserting its claim in respect of the Equinox Fitness Centre CCW project, but Black & McDonald names Govan Brown as the person to whom services or materials were supplied and BCIMC as the owner.

35 The facts in Williams & Prior distinguish it from all three of the lien claims that are before the court on these motions. A person reading the claims for lien would be able to identify the leased premises and Equinox's role. That was not the case in Williams & Prior.

36 The serious error that Master Sandler found in Williams & Prior does not exist in the Gem Campbell lien claim where an Equinox entity is described but the wrong Equinox entity is named as owner. Applying Master Sandler's reasoning from Williams & Prior, the correct legal name can be read in to replace the incorrect name that was used. It is a failure to strictly comply brought about by Equinox 199's failure to properly identify itself and register the name it was using to carry on business, discussed later in these reasons.

37 In Govan Brown's lien claim, unlike the two lien claims in Williams & Prior, Equinox and the premises are both described in the lien claim. The issue is whether naming the "owner" in the statements as the person to whom services and materials were supplied, instead of as owner, is a serious error or whether it is a failure to "strictly" comply with the requirements of the Act. On that basis the Govan Brown lien claim is distinguishable from Williams & Prior where neither the tenant nor the premises were identified anywhere in the claims for lien.

38 In the Black & McDonald lien claim Equinox and the premises are identified in the statements, but not as owner. Again, the issue is whether the error is a failure to "strictly" comply with the Act so that section 6 can be invoked or whether the error is a serious one, in which case section 6 of the Act does not apply. That in Williams & Prior the tenant and the premises were not identified anywhere in the lien claims is a significant distinguishing fact. In Black & McDonald, where the premises are described as the Equinox Fitness Centre CCW Project, Equinox ought reasonably to know that the lien claimant is asserting a claim against its interest.

39 Another reason to distinguish Williams & Prior is the intervening transition from paper registration of claims for lien to mandatory electronic registration. For electronic registration to serve the purpose for which it was created, namely to replace the out of date paper registry system, the bar and the public must adapt and learn how to comply with the new requirements. At this relatively early stage of electronic registration and in the absence of prejudice, misnomers, errors and misplaced information on the electronic version of the form required to be used for electronic registration should be interpreted liberally as failures to "strictly" comply with the requirements of subsection 34(5) of the Act.

40 This approach allows the court to consider the purpose of registering a lien claim, namely to give notice of the lien claim to the person whose interest in the property is challenged, and to any other person dealing with the property. It recognizes the need for the users of the system to be eased through the transition to electronic registration so that it is, naccomplished without defeating unnecessarily the lien claims of the contractors the Act is designed to protect.

41 In my view, when the electronic form required to be used to register a claim for lien merged (i) the name of the owner, (ii) the person to whom services and materials were supplied, and (iii) the description of what was supplied, into one section called "statements", naming the person whose property rights may be affected became confusing. If named in the "statements" section of the electronic form an owner ought reasonably be informed that a claim is made against its interest in the property, absent evidence of prejudice. In my opinion, inserting the owner's name in the wrong part of

Govan Brown & Associates Ltd. v. Equinox 199 Bay Street Co., 2014 ONSC 3924, 2014...2014 ONSC 3924, 2014 CarswcllOnt 8856, 242 A.C.W.S. (3d) 21, 33 C.L.R. (4th) 78

■fi/vNsxt .CANADA Copyright© Thomson Reuters Canada Limited or its licensors (excluding individual court documents). Ail rights reserved.

the statements is a failure to "strictly" comply with the requirements of subsection 34(5) of the Act, but not so serious an error as to take it outside of the application of section 6 of the Act.

42 The confusion created by the electronic form of registration is illustrated in the Black & McDonald case. In the electronically registered version of its claim for lien Equinox is identified in the statements but not as owner. However in the prescribed Form 8 paper version of the claim for lien, given to Equinox but not able to be registered electronically, Equinox is correctly identified on the line specifically provided in Form 8 to insert the name of the owner.

43 Unlike the lien claims in Williams & Prior, it is clear on the face of each of the three lien claims challenged on these motions that it is Equinox's leased premises that is liened. Upon reading each of the lien claims Equinox 199 would know, or ought reasonably to know, that each lien claim is made in respect of the improvements to the leased premises that it was renovating for use as a fitness club at Commerce Court West. That was not the case in Williams & Prior. Master Sandler's concern was that the lien claim could have been registered against the leasehold premises of any one of a number of tenants in the premises. On that basis I find that Williams & Prior does not apply.

44 Equinox 199 relies on the decision of Master Polika in Engineered Construction Ltd. v. Arena Entertainmentq

Corp. wherein Master Polika found that the lien claimant's failure to identify the leasehold tenant Arena Entertainment Corporation as owner or at all in its claim for lien was a serious error, fatal to the lien claim. Master Polika applied Williams & Prior and found that the omission was more than a minor or technical irregularity. The Engineered Construction Ltd. case is distinguishable for the same reasons that Willianis & Prior is distinguishable.

45 Master Sandler dismissed a motion to discharge a lien claim in Petroff Partnership Architects v. Mobius Corp. 9 where the tenant was not identified as an owner in the lien claim registered electronically. In that case the tenant was identified on the face of the lien claim as a person to whom services and materials were supplied but not as owner. However, the tenant's long term lease had been registered on title. Because the lease was registered on title the tenant could be identified as an owner by searching title. The lien claim was saved by the following language in the electronic form of lien claim:

The lien claimant claims a lien against the interest of every person identified as an owner of the premises described in said PIN to this lien

46 Having decided the case on that basis it was not necessary for Master Sandler to address the issue of whether identifying the tenant, Commerce Seven, in the lien claim as a person to whom services and materials were supplied but not as owner is a failure to comply "strictly" with the requirements of subsection 34(5) of the Act or whether it is a serious error. He did, however, distinguish Williams & Prior in paragraph 21:

A careful reading of the statements section of this electronic lien claim makes it clear that Petroff Partnership Architects is claiming a lien against the interest of both Wemat and Commerce-Seven in the identified premises. Thus the case is distinguishable from the Williams & Prior v Taskon case...

47 Master Sandler examined the Petroff Partnership claim for lien in its entirety and concluded that the failure of the lien claimant to include Commerce-Seven's name as an "owner" in the first Statement, "Name and Address of Owner", was a minor or technical irregularity if one takes into account all the other words used in the claim for lien and he applied section 6 of the Act to consider the issue of prejudice. The reasoning in Petroff Partnership is that the statements, read as a whole, identify the lien claimant's claim against the interest of the tenant.

48 Applying that reasoning to the three lien claims that are before me and reading the statements as a whole:

a) Govan Brown claims against Equinox's interest in the 2Ild and 3ld floor premises;

Govan Brown & Associates Ltd. v. Equinox 199 Bay Street Co., 2014 ONSC 3924, 2014...2014 ONSC 3924, 2014 CarswellOnt 8856, 242 A.C.W.S. (3d) 21, 33 C.i .R. (4th) 78 “

awNext.CANADA Copyright© Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

b) Gem Campbell identifies Equinox Yorlcville Co., which has the same parent company (EHI) as Equinox 199, as an owner; and

c) Black & McDonald claims against Equinox's interest in the CCW Fitness Centre Project.

49 Petr off Partnership must be distinguished, however, because the Equinox 199 lease is not registered on title. The lien claims cannot be saved by the boilerplate wording of the electronic form of lien claim that incorporates by reference every owner described in the PIN as an owner of the premises.

50 There are no cases directly on point. I find it significant that the cases that discuss section 6 of the Act do not focus on the wording of the legislation but interpret the editor's heading for section 6, namely "minor irregularities". Those words are not used in the legislation. As a matter of statutory interpretation, headings are inserted for convenience only

and do not form part of the legislation itself.10 The issue, properly stated, is whether a "claim for lien is invalidated by reason only of a failure to comply strictly with subsection ...34(5)".

51 Interpreting whether a hen claimant has complied strictly with the requirements of the Act, or whether the lien claimant's error is a serious one, must be considered in the context of the Act as remedial legislation. In my view, section 6 of the Act, even though narrower in scope than its predecessor under the Mechanics' Lien Act, R.S.0.1980, is nevertheless designed as a curative provision to protect lien claimants from losing their lien rights if they fail to comply strictly with the form and content requirements of registration under the Act, absent prejudice to other parties.

52 The Court of Appeal in Parkland Plumbing & Heating Ltd. v. Minaki Lodge Resort2002 Inc.,11 opined at paragraph 28 that the Act is remedial legislation, adopting the quote of Kevin Patrick McGuinness in Construction Lien Remedies

in Ontario, 2nd ed. (Toronto: Carswell, 1997), at para. 1.8:

[The Act] was intended to correct a perceived deficiency in the protection afforded by the common law to construction suppliers by creating a scheme of rights in favour of those suppliers, and it provides a method for the assertion and enforcement of those rights.

1 n53 In Gillies Lumber Inc. v. Kubassek Holdings Ltd. Justice Laskin, m his dissenting opinion, considered the purpose of the Act and in particular section 6 as a curative provision. Justice Borins, one of the majority judges, agreed with Justice Laskin's analysis of section 6 but found that it did not apply in the circumstances of the case before the court where the issue concerned a general lien registered under section 20 of the Act. Section 6 of the Act does not apply to section 20.

54 Justice Laskin's discussion, though not binding, is informative to the issues before the court on these motions. At paragraph 17 he reviews the legislative history of the Act and its predecessor, the Mechanics' Lien Act, which contained a broad curative provision requiring only "substantial compliance", interpreted generously by the courts. Justice Laskin wrote:

Section 6 of the current Act was intended to scale back the jurisprudence, to narrow the curative power of the court. Even so, in my view, nothing in the language or purpose of section 6 suggests that its application should be limited to technical, trivial or minor matters. Construction lien legislation is intended to protect the interests of workers by providing security for the payment of their labour and materials, which enhance the value of an owner's land. Section 6 furthers this purpose by permitting the court to excuse workers' failure to comply strictly with various statutory requirements for registering a lien. At the same time, section 6 safeguards the interests of owners by allowing them to resist the application of section 6 if they can show prejudice.

55 Section 6 is not a carte blanche curative provision to correct all defects in a registered construction lien. It is narrower than the predecessor test of "substantial compliance". However, I agree with Justice Laskin that its application should not be limited to technical, trivial or minor matters.

Govan Brown & Associates Ltd. v, Equinox 199 Bay Street Co., 2014 ONSC 3924, 2014...2014 ONSC 3924, 2014 CarswellOnt 8856, 24? A.C.W.S. (3d) ?1,33 C.l .R. (4th) 78 :

rswNaxt Canada copyright © Thomson Reuters Canada Limited or its (censors (excluding individual court documents). All rights reserved.

1 456 In the earlier case of Gitillevin International Inc. v. Enertech Lighting Systems Inc. Master Clark considered whether a hen claim was invalid because the wrong tenant was named as owner. The case concerned the flagship Toronto store bounded by Queen, Bay, Richmond and Yonge Streets. In that case the registered owner had leased the property to Simpson's Limited for 21 years and Simpsons had assigned the lease to Hudson's Bay. Hudson's Bay and the registered owner moved to discharge a claim for lien on the grounds that Simpson's, not Hudson's Bay, was named as owner in the claim for lien.

57 Master Clark, relying on the Divisional Court's decision in Allied Fasteners & Supplies Ltd. v. Perris (No. 1),14 found that that while section 6 of the Act is more restrictive than was section 19 of the Mechanics' Lien Act, it nevertheless gives the court a curative discretion when there has been a failure to comply strictly with section 34(5) of the Act.

58 In Guillevin International Inc. the tenant, Hudson's Bay, was not named at all in the claim for lien. Rather, Simpson's, the previous long term tenant, was named as owner. In the motions before me the error is less serious: Equinox is named in the claims for lien but, in two cases, in the incorrect part of the "statements" portion of the form, naming an entity that is not the corporation that signed the unregistered lease, and in the third case, Equinox is named in the correct part of the form but the incorrect Equinox entity is named.

59 Master Clark notes that the legislature specifically excused lien claimants from strict compliance with the Act in four specific instances, one instance being the contents of a claim for lien under subsection 34(5) of the Act, provided there was no prejudice. He found that failure to comply strictly with the requirements of the Act does not automatically invalidate the claim for lien beyond redemption. Rather, the claim for lien remains valid unless a court finds that "deviation from

strict compliance has caused prejudice."15 Master Clark concluded that where the proper names and addresses of the owner and the person to whom services and materials have been supplied is not set out in the claim for lien it is a failure to "strictly" comply with the Act and the court must ask whether there has been prejudice to any person and to what extent. In the case before him Master Clark concluded that there was no evidence of prejudice to Hudson's Bay so that section 6 of the Act applies to prevent invalidating the claim for lien.

60 I agree with Master Clark in Guillevin International Inc. that one purpose of section 6 of the Act is to relieve a lien claimant from strict compliance with the contents of the claim for lien where the owner is named incorrectly, provided there is no prejudice.

61 In the present three cases the owner of the fee simple is named and Equinox, in one of its various forms, is identified in the statements part of the form. Subject to my findings regarding naming the wrong Equinox entity, section 6 operates to relieve the lien claimants from strict compliance provided there is no prejudice to Equinox 199.

62 On the issue of prejudice arising from referring to Equinox in the wrong part of the statements portion of the claims for lien, there is no evidence that Equinox 199, EHI or any of the Equinox entities were misled as to the lien claims registered in respect of the project. There is no evidence that Equinox 199, EHI or any of the Equinox entities did not know that the lien claims were registered in respect of their supply of services and materials to the improvements to the Equinox leased premises on the second and third floors of Commerce Court West that was being improved for use as an Equinox Fitness Club. Equinox filed no evidence of prejudice and did not assert prejudice.

63 I find that there is no prejudice to Equinox 199 that would prevent the court from applying section 6 of the Act.

Does naming the wrong Equinox entity invalidate the claim for lien?

64 The issue in all three motions is a narrow one: is it fatal to a lien claim for the lien claimant to name the wrong Equinox entity?

Who or what is Equinox?

Govan Brown & Associates Ltd. v, Equinox 199 Bay Street Co., 2014 ONSC 3924, 2014...2014 ONSC 3924, 2014 CarswellOnt 8856, 242 A.C.W.S. (3d) 21,33 C.L.R. (4th) 78 : ~

'Next-Canada Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

65 "Equinox" is a name used by multiple related Equinox entities, including corporations, registered business names and styles, at least one partnership and several unincorporated and unregistered entitles. Equinox 199 is the entity that leased the premises from BCIMC. Signage and communications refer to the leased space as "Equinox Fitness Clubs". At the time the lien claims were registered Equinox Holdings and Equinox Fitness Clubs were not business names registered to Equinox 199 under the Business Names Act, R.S.O. 1990, c.B.17. Equinox's deponent, Mr. Weinhaus, admitted in cross-examination that Equinox Holdings is not a corporate entity, but that it refers to Equinox Holdings Inc. ("EHI"), a Delaware corporation.

66 Searches conducted in October 2013 disclosed no business name registrations in Ontario for "Equinox Holdings" or "Eclipse Developments", the names used by Equinox in the contract between Equinox and Govan Brown and, in turn, referred to as the owner by Govan Brown in its subcontracts with Gem Campbell and Black & McDonald. Many of the communications filed in evidence demonstrate that various Equinox entities identified themselves merely as "Equinox".

67 The lien claimants attempted to identify the Equinox entity involved in the project. Only with extraordinary investigative skills could the lien claimants have discovered that Equinox 199 is the correct name of the leasehold "owner" for purposes of registering a construction lien against its leasehold interest. Some of their efforts are described below.

68 Govan Brown was paid by cheques16 drawn on the bank account of an entity identified only as "Equinox" with the address "895 Broadway New York NY 10003".

69 The Equinox website identifies the operator of the fitness facility as "Equinox". In email communications between Govan Brown and Equinox regarding the project Equinox referred to itself as "Equinox Holdings/Eclipse Developments" but never as Equinox 199.

70 On June 10,2013 Black & McDonald served section 39 demands on six Equinox entities, including (i) Equinox, 199 Bay Street, Toronto, ON M5J 1J5 being the style name used by Equinox and the address of the project and (ii) Equinox

Holdings/Eclipse Development, 895 Broadway, 3 rd Floor, New York, N.Y. 10003, being the name used by Equinox in its contract with Govan Brown and carried over into the subcontract between Govan Brown and Black & McDonald, sent to the address of Equinox 199's parent company.

71 Black & McDonald's demand letter identifies the project and the premises and gives written notice of the Black & McDonald's lien claim, including the section 24 provisions for increased holdback obligations. The demand asks for the proper names of the parties to the Equinox and Govan, Brown contract. None of the Equinox recipients of the Black & McDonald demand letter responded.

72 Black & McDonald also conducted searches in an effort to uncover the proper name of Equinox Holdings/Eclipse Developments, including searches on or about June 6,2013 in New York State that disclosed Equinox Holdings, Inc. as a

Delaware corporation with a business address at 895 Broadway, 3 floor, New York, NY 10003. Black & McDonald's17corporate searches of Equinox Holdings Inc. and Eclipse Developments on or about June 7, 2013 disclosed several

entities but none of them pointed to Equinox 199.

73 After receiving the June 18,2013 letter from counsel for Equinox 199 disclosing the corporate identity of the tenant owner of the leasehold interest of the premises as Equinox 199, Black & McDonald conducted a search of that name and discovered that it had been incorporated on April 17,2012 in Nova Scotia. Curiously the lease between BCIMC and Equinox 199 is dated, and presumably was executed, on April 12, 2012, five days prior to incorporation.

74 The evidence of Richard Giacomini, vice president of Gem Campbell, is that Equinox referred to itself as "Equinox Fitness Clubs". In the contract between BCIMC and Equinox 199 Equinox referred to itself as "Equinox Fitness Clubs".

75 Gem Campbell's searches disclosed the following:

Govan Brown & Associates Ltd. v. Equinox 199 Bay Street Co., 2014 ONSC 3924, 2014...2014 ONSC 3924, 2014 CarswellOnt 8856, 242 A.C.W.S. (3d) 21, 33 C.L.R. (4th) 78 : “

i'fWNext--cauaba Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

a) A NUANS searches of "Eclips* Develop* and Equinox* Hold* disclosed Eclipse Developments as an active Nova Scotia partnership. The searches did not disclose Equinox 199.

b) A search of the style name "Equinox Fitness Clubs" did not disclose Equinox 199. The resulting Business Names Report from the Ontario government identified "Equinox Fitness Clubs" as a business name registered to "Equinox Yorkville Co.", a Nova Scotia company. Equinox Yorkville Co. is also a wholly owned subsidiary of Equinox Holdings Inc. ("EHI"), the same Delaware company with offices in New York that is also the parent of Equinox 199. Gem Campbell's style name search did not disclose that Equinox 199 operates as Equinox Fitness Clubs, notwithstanding the lease terms as between BCIMC and Equinox 199, and the signage for the CCW fitness facility.

76 Gem Campbell also served section 39 demands pursuant to the Act, requesting, inter alia, the names of the parties to the contract. Demands were sent to Govan Brown, BCIMC and Equinox Yorkville Co. on June 10, 2013. BCIMC responded to Gem Campbell on June 18,2013,11 days after Gem Campbell had registered its lien claim, identifying the tenant on the lease as Equinox 199. Govan Brown responded to Gem Campbell on June 19,2013 but did not identify the name of the tenant. There is no evidence that Equinox Yorkville Co. responded to Gem Campbell's section 39 demand.

Equinox's conduct

77 Equinox began operating as a fitness centre on April 29, 2013. Signage referred to in the contract and used to advertise and identify the fitness club refers to it as "Equinox Fitness Clubs". Had the lien claimants conducted name and style searches of "Equinox" they would have discovered the corporate name "Equinox 199 Bay Street Co.". The reason that Gem Campbell's search did not disclose that corporation is that they searched the business name that the fitness club was using, namely "Equinox Fitness Clubs", but not "Equinox" so that it disclosed only the Equinox Yorkville Co. entity. Equinox 199 should have registered "Equinox Fitness Clubs", the name it used for the CCW facility that was under construction, but failed to do so.

78 The failure by Equinox (i) to register the business names "Equinox Fitness Clubs" and "Equinox Holdings" to Equinox 199; and (ii) to contract with Goven Brown in its correct corporate name is the source of the lien claimants' confusion as to the identity of the leasehold owner. Equinox ought not be permitted to benefit from what one counsel

1Rdescribed as Equinox's "corporate name shell game".

79 Equinox 199 never issued a certificate of substantial performance under section 32 of the Act. Had it done so the identity of the owner (in this case Equinox 199) and the address for service would have been published pursuant to section 32 of the Act and Form 6.

80 Throughout the events relevant to the project and these lien claims, Equinox used multiple versions of its name, including names that were not legal entities. Most significantly, Equinox executed the contract with Govan Brown as "Equinox Holdings/Eclipse Developments", which is neither a corporation nor a registered business name or partnership. When asked by way of section 39 demands to identify the proper corporate entity under the lease and the Govan Brown contract, Equinox failed to respond.

81 I agree with the lien claimants that Equinox's use of Equinox Holdings/Eclipse Developments in the Govan Brown contract was misleading and could be construed as an attempt to avoid its contractual obligations as owner under the Act.

82 Initially Equinox took the position that failure to identify Equinox 199 by its correct corporate name, as it appears in the lease between BCIMC and Equinox 199, is fatal to the lien claims. By the time the motions were heard Equinox 199 had withdrawn its challenge to the validity of lien claims where its name, in any of its multiple forms other than "Equinox Yorkville Co.", appears in the "statements" portion of the registered lien claim as an owner.

83 Equinox 199 maintains that Equinox Yorkville Co. c.o.b. Equinox Fitness Clubs (as named by Gem Campbell in its lien claim) is not a proper form of Equinox to name as owner of the CCW leased premises.

Govan Brown & Associates Ltd, v, Equinox 199 Bay Street Co., 2014 ONSC 3924, 2014...2014 ONSC 3924, 2014 CarswellOnt 8856, 242 A.C.W.S. (3d) 21,33 C.LR. (4th) 78 :

'Nsxti.Canada Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). Ail rights reserved.

84 The puzzle was solved and the actual structure of the various Equinox entities was finally disclosed in the February 14, 2014 affidavit of Jeffrey Weinhaus, Executive Vice President of Equinox Holdings, Inc. ("EHI"). EHI, incorporated in Delaware, is the parent Equinox company. Its head office is in New York. EHI wholly owns two subsidiary holding companies, Equinox 199 Bay Holdings Inc. and Equinox 199 Bay Holdings (1%) Inc., also Delaware companies. EHI owns Equinox 199 through these two Delaware holding companies. Eclipse Development is a company incorporated in New York and a wholly owned subsidiary of EHI. Equinox 199 Bay Street Co. was incorporated in Nova Scotia on

April 14, 2012 and was registered in Ontario on May 11, 2012.19 The organizational chart attached as Appendix "B" illustrates this structure.

85 In Parkland Plumbing & Heating Ltd. v. Minaki Lodge Resort 2002 Inc. “ the Court of Appeal considered the issue of ownership in opining on a priorities issue in circumstances where multiple corporate entities were controlled by the same individual. The court found that the individual exercised clear domination and control over the project "through a stable of companies" that acted as a mere corporate fapade for the individual's own activities.

86 Equinox has conducted itself similarly to the owner of Minaki Lodge. All of the Equinox entities are related. Some of the entities were unincorporated and unregistered. But they all point back to the parent company, EHI. By operating through a stable of companies and unincorporated, unregistered entities Equinox cannot avoid its obligations as an owner and contracting party under the Act.

The Govan Brown and Black & McDonald lien claims

87 The Equinox entity named by Govan Brown and by Black & McDonald in their claims for lien is "Equinox Holdings/Eclipse Development", the same entity that is named in its October 26, 2012 contract with Equinox 199 as owner and Govan Brown as construction manager. Equinox 199 defined "owner" and executed the contract using the name "Equinox Holdings/Eclipse Developments".

88 I find that naming Equinox Holdings/Eclipse Development instead of Equinox 199 in the claim for lien is a failure to strictly comply with the Act. Section 6 of the Act provides that, absent prejudice, this failure does not invalidate the claim for lien but rather allows the name Equinox 199 to be substituted for Equinox Holdings/Eclipse Development in the Govan Brown claim for lien.

89 As to prejudice, there can be no prejudice (and none is asserted) on the issue of the Equinox entity named where the version used is the exact same version that Equinox used to contract with Govan Brown.

The Gem Campbell lien claim

90 The Equinox entity that is named in Gem Campbell's claim for lien is "Equinox Yorkville Co.", an Equinox entity that operates an Equinox Fitness Club in Yorkville and that has the same parent company, EHI.

91 Gem Campbell conducted reasonable searches to determine the correct legal name of the entity described in the contract as Equinox Holdings/Eclipse Developments. Equinox was in breach of its obligation to register "Equinox Fitness Clubs" as a business name in Ontario, so Gem Campbell's search of "Equinox* Hold*" failed to disclose Equinox 199 as the entity behind the name used in its communications regarding the CCW facility.

92 Given the multiple related Equinox entities, the attempts made to uncover the correct Equinox entity and the relationship of Equinox Yorkville and Equinox 199 through their parent company EHI, I am satisfied that naming Equinox Yorkville Co. instead of Equinox 199 is not a serious error but rather a failure to strictly to comply with section 34(5) of the Act. Section 6 of the Act provides that, absent prejudice, this failure does not invalidate the claim for lien but rather allows the name Equinox 199 to be substituted for Equinox Yorkville Co. in the Gem Campbell claim for lien.

Govan Brown & Associates Ltd. v. Equinox 199 Bay Street Co., 2014 ONSC 3924, 2014...2014 ONSC 3924. 2014 CarswellOnl 8856, 242 A.C.W.S. (3d) 21, 33 C.L.R. (4th) 78 " :

• Next- CANADA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

93 As to prejudice, I find that there is no evidence of prejudice (and none is asserted) on the issue of the Equinox entity named in the Gem Campbell claim for lien.

Conclusion on the Equinox Motions to Discharge the Lien Claims

94 For all of these reasons I find that the lien claims of Govan Brown, Black & McDonald and Gem Campbell do not strictly comply with the requirements of section 34(5) of the Act, that the failures are not serious errors incapable of validation under section 6 of the Act, and that there is no prejudice to Equinox 199 to correct the errors. I find that the lien claims of Govan Brown, Black & McDonald and Gem Campbell are valid, subject to the lien claimants in each case proving their claims on the issues of quantum, timeliness and any other defences raised to the merits of the lien claims.

95 The motions brought by Equinox 199 to discharge the liens of Govan Brown, Black & McDonald and Gem Campbell are dismissed.

Issue #2: Amending Parties and Pleadings

96 Govan Brown seeks to add "Equinox Holdings, Inc." as a party and to amend its pleading in the form attached as Appendix "A" to its notice of motion.

97 Black & McDonald seeks to substitute "Equinox 199 Bay Street Co." for "Equinox" in its pleadings, increase its claim in contract by $109,000.00 and amend its pleading in the form of the draft Amended Statement of Claim filed as Tab "N" of its motion record.

98 Gem Campbell seeks to substitute "Equinox Holdings, Inc." for "Equinox" in its pleading and amend its pleading in the form of the draft Amended Statement of Claim appended to its Cross-Motion Record as Schedule "A".

99 Equinox 199 provided no evidence of prejudice and no substantive opposition to the motions to substitute or add Equinox 199 as a party and amend the pleadings as sought.

100 I find that it is appropriate to grant the motions of all three lien claimants to add or substitute Equinox 199 as a party, and amend the pleadings as sought in the moving parties' notices of motion and I so order. The moving parties in each case shall prepare the appropriate orders to be signed, attaching to the order the proposed amended pleading that is in their motion materials.

Issue #3: Declaring the Date of Substantial Completion

101 Govan Brown asks the court to declare April 29, 2013 as the date of substantial completion. That is the date that Equinox 199 opened the Equinox Fitness Club at CCW for business as a fitness facility. No certificate of substantial performance was published.

102 Govan Brown was the construction manager. It asks the court to declare as the date of substantial completion a date that is earlier than the date of supply of some of its subcontractors who registered significant lien claims. I find that the evidence on the value of work remaining as of April 29, 2013 conflicts.

103 As determined in Combined Air Mechanical Services Inc. v. Flesch, the court on a motion such as this is entitled to weigh evidence, evaluate credibility, and draw reasonable inferences in order to make all necessary findings of fact

and apply the law to the facts. However, in this case, I find that I am unable to reach a fair determination of the issue of the date of substantial completion on its merits at this stage of the proceedings. The date of substantial completion raises a genuine issue that requires a trial.

104 The motion by Govan Brown to declare the date of substantial completion is dismissed.

Govan Brown & Associates Ltd. v. Equinox 199 Bay Street Co., 2014 ONSC 3924, 2014...2014 ONSC 3924, 2014 CarswellOnt 8856, 242 A.C.W.S. (3d) 21,33 C.I...R. (4th) 78

'Nsxt : Canada, Copyrighl © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

Conclusion .

105 The motions by Equinox 199 to discharge the lien claims of Govan Brown, Black & McDonald and Gem Campbell are dismissed.

106 The motion by Govan Brown to declare the date of substantial completion is dismissed.

107 The motions brought by Govan Brown, Black & McDonald and Gem Campbell to substitute parties in the title of proceedings and amend their pleadings is granted. Amended statements of claim shall be issued within 20 days of taking out the order arising from these reasons. Amended statements of defence shall be delivered within 30 days thereafter.

108 The parties shall attend before me on a date to be fixed through Acting Trial Co-ordinator David Backes to settle the orders, make submissions on costs of these motions and to fix the next stage of the litigation timetable in this reference.

Motions dismissed; cross-motions granted in part.

Govan Brown & Associates Ltd. v, Equinox 199 Bay Street Co., 2014 ONSC 3924, 2014...2014 ONSC 3924, 2014 CarswellOnt 8856, 242 A.C.W.S. (3d) ?1, 33 C.L.R. (4th) 78 ' '

Appendix "A"

Form 8 Claim for Line under Section 34 of the Act

Construction Lien Act

Name of lien claimant:.___________________________________

Address for service:___________________________________

Name of owner:______________________________________

Address:____________________________________________

Name of person to whom lien claimant supplied services or materials:____

Address:________________

Time within which services or materials were supplied:

from __________ to __________{date supply commenced) {date of most recent supply)

Short description of services or materials that have been supplied:

Contract price or subcontract price: $___Amount claimed as owing in respect of services or materials that have been supplied: $___

{Use A where the lien attaches to the premises; use B where the lien does not attach to the premises).

A. The lien claimant {if claimant is personal representative or assignee this must he stated) claims a lien against the interest of every person identified above as an owner of the premises described in Schedule A to this claim for lien.

VVosti-cWcNaxt- xanaeia Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

Govan Brown & Associates Ltd. v. Equinox 199 Bay Street Co., 2014 ONSC 3924, 2014...2014 ONSC 3924, 2014 CarswellOnt 8856, ?A2 A.C.W.S. (3d) 21, 33 C.I..R. (4th) 78 ' ' '

B. The lien claimant (if claimant is personal representative or assignee this mast be stated) claims a charge against the holdbacks required to be retained under the Act and any additional amount owed by a payer to the contractor or to any subcontractor whose contract or subcontract was in whole or in part performed by the services or materials that have been supplied by the lien claimant in relation to the premises at:

Date:(address or other identification of the location of the premises)

(signature of claimant or agent)

Schedule A

To the claim for lien of,________

Description of premises:

(Where the lien attaches to the premises, provide a description of the premises sufficient for registration under the Land Titles Act or the Registry Act, as the case may be).

Appendix "B" — Equinox Corporate Structure

Equinox 199 Bay Holdings, Inc: and Equinox 199 Bay

Holdings [1%) Inc. ?

(Delaware holding companies)

■ Equinox Yorkville Holdings, B Inc. and Equinox Yorkville IB Eclipse Development||fc11 (Delaware holding 9 (New York company)

W ' companies) 'l .

Graphic 1

Footnotes

1 The amount posted takes into account duplication in the lien claims of the construction manager and the subcontractors.

2 Vulcan affidavit, paragraph 12.

.1! awNext CAWACW Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

Govan Brown & Associates Ltd. v. Equinox 199 Bay Street Co., 2014 ONSC 3924, 2014...2014 ONSC 3924, 2014 CarswollOnt 8856, 242 A.C.W.S. (3d) 21, 33 C.LR. (4th) 78 ‘

3 The amount posted to vacate the Govan Brown lien takes into account amounts posted to vacate subcontractor liens subsumed in the Govan Brown lien claim.

4 Section 6, Construction Lien Act, R.S.O. 1990, c.C.30

5 [2003] O.J. No. 498, 22 C.L.R. (3d) 1, 120 A.C.W.S. (3d) 941 (Ont. Master)

6 Williams & Prior Ltd. v. Taskon Construction Ltd., supra, at paragraphs 6 and 7

7 Parkland Plumbing & Heating Ltd. v. Minaki Lodge Resort 2002 Inc., [2009] O.J. No. 1195 (Ont. C.A.) at paragraph 67.

8 [2006] O J. No. 5582 (Ont. Master)

9 Petroff Partnership Architects v. Mobius Corp. (2003), 65 O.R. (3d) 118, [2003] O.J. No. 2434 (Ont. Master)

10 Legislation Act, 2006, S.O. 2006, c.21, in force December 15,2009, section 70: "Reference aids"

11 [2009] O.J. No. 1195, 2009 ONC.A 256, 305 D.L.R. (4th) 577, 78 C.L.R. (3d) 1, 2009 CarswellOnt 1522, 77 R.P.R. (4th) 159, 250 O.A.C. 232 (Ont. C.A.) and (2009), 176 A.C.W.S. (3d) 535 (Ont. C.A.)

12 [1999] O.J. No. 2692, 176 D.L.R. (4th) 334, 123 O.A.C. 206, 47 C.L.R. (2d) 1 (Ont. C.A.) and (1999), 89 A.C.W.S. (3d) 871 (Ont. C.A.)

13 [1995] O.J. No. 958, 19 C.L.R. (2d) 15 (Ont. Master); and (1995), 54 A.C.W.S. (3d) 430 (Ont. Master)

14 Unreported, (November 20,1986), Galligan J. (Ont. Div. Ct.), leave to appeal to the Court of Appeal refused

15 Guillevin International Inc. v Enertech Lighting Systems, supra, at para. 25

16 Copies of cheques filed in evidence total $8,301,350.21

17 Evidence of Michael Vulcan

18 Defined in the Oxford Dictionary Oxford University Press, 10 th edition, as "a deceptive and evasive action or ploy", with "deceptive" defined as "giving an appearance or impression different from the true one; misleading" and "evasive" defined as "directed towards avoidance or escape".

19 Ontario Corp. Number 1874409

20 [2009] O.J. No. 1195, 2009 ONCA 256, 305 D.L.R. (4th) 577, 78 C.L.R. (3d) 1, 2009 CarswellOnt 1522, 77 R.P.R. (4th) 159, 250 O.A.C. 232 (Ont. C.A.) and (2009), 176 A.C.W.S. (3d) 535 (Ont. C.A.)

21 [2014] S.C.J. No. 7 (S.C.C.) [hereinafter Hryniak v Mauldin]

22 In the case of the motions before me as reference master I have all of the powers of a judge: see section 58(4) of the Construction Lien Act, R.S.O. 1990, c. C.30

End of Document Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rightsreserved.

a'/.'Next ■ cANADa. Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

TAB “5”

Micort Interiors General Contractors Inc. v. D'Abbondanza..., 2008 CarswellOnt 6156200iKiarswreiiO^^ _ —

Pa®'2008 CarswellOnt 6156

Ontario Superior Court of Justice

Micon Interiors General Contractors Inc. v. D'Abbondanza Enterprises Inc.

2008 CarswellOnt 6156, [2008] O.J. No. 4132,170 A.C.W.S. (3d) 695, 76 C.L.R. (3d) 289

Micon Interiors General Contractors Inc. v. D'Abbondanza Enterprises Inc. et al.

C. Gilmore J.

Judgment: October 21, 2008 Docket: Newmarket CV-06-079366-00

Counsel: B. Bathgate for Plaintiff M. Ross for Defendants / Moving Party

Subject: Contracts; Corporate and Commercial; Civil Practice and Procedure; Insolvency

MOTION brought to vacate claim for lien under Construction Lien Act, for order that proceedings continue under simplified procedure and for security for costs.

C. Gilmore J.:

Background

1 The Defendants move for an order under ss. 45 and 47 of the Construction Lien Act, R.S.0.1990, c. C.30, declaring that the claim for lien of the Plaintiff was not preserved and has thus expired. Accordingly, they ask that the lien be discharged and the certificate of action vacated. If the lien is discharged, they seek leave to continue the action as a contract matter under the Simplified Procedure. Whether or not the lien is discharged, they seek an order that the Plaintiff post security for costs in this action.

2 The Defendants also sought leave to amend their pleadings to reduce the amount of damages sought in their counterclaim. At the motion, counsel for the Plaintiff indicated that he was not opposed to the amendments. As such, an order is granted to the Defendants for leave to amend their Statement of Defence and Counterclaim as per the draft attached as Exhibit "E" to the affidavit of Lisa D'Abbondanza, sworn July 3, 2008.

3 The Plaintiffs action is for damages in relation to outstanding payments on construction work at 110 Adesso Drive, Concord, Ontario ("110 Adesso"). The Defendants' counterclaim is for the cost of repairs and deficiencies. The lien amount is $22,800.58. The original counterclaim was for $400,000.00 for breach of contract and other damages. The amendment to the counterclaim has now been ordered and the counterclaim is accordingly reduced to $35,000.00.

4 One of the Defendants, D'Abbondanza Enterprises Inc. ("D'Abbondanza"), and the Plaintiff entered into a contract for renovation work at 110 Adesso on April 25, 2005. The completion date stipulated in the contract was June 30,2005. The total contract price, including extras, was $205,264.52.

5 On August 3, 2005, the Plaintiff delivered its final invoice. However, at that point, some work was not done. This work included repairs to a defective exhaust fan, the provision of an air balancing report and completion of sprinkler drawings and a hydraulic flow test in order to obtain the proper permits from the City of Vaughan, Fire Prevention Division. The repair to the exhaust fan was not completed until January 27,2006. The air balancing report was received by the Plaintiff by November 17,2005, but it was not provided to the Defendants until January 26,2006. The hydraulic flow test was never done.

'NextrCANADA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

6 On November 29,2005 and December 8,2005, the Plaintiff wrote to D'Abbondanza's architect, Lisa D'Abbondanza (the "architect"), and requested that the holdback be released to it since more than forty-five days had passed since substantial completion of the contract. Substantial completion was never certified or published by the architect. The Defendants terminated the contract in or around early February 2006. The claim for the lien was registered on March 9, 2006.

The Positions of the Parties

A. The Construction Lien

7 The parties agree that this matter falls under s. 31(2)(b) of the Construction Lien Act because the matter deals with a contractor's lien for services or materials where no certification of substantial performance exists. Under s. 31(2)(b), this type of contractor's lien expires forty-five days from the earliest of the date the contract was either completed or abandoned. The parties further agree that the contract was not abandoned. Therefore, much of the argument centred around whether or not the contract was completed.

i) The Defendants' Position

8 The Defendants argue that the contract was completed as per the final invoice sent on August 3, 2005. This invoice was also characterized by the Plaintiff as a final invoice. The parties agree that no further invoices relating to the contract were sent. Work done subsequent to this date related to either repair or deficiency work, which the Defendants argue cannot operate to extend the time for registering a lien.

9 Work done after August 3, 2005 can be broken down into three main areas: i) the defective fan, ii) the air balancing report and iii) the sprinkler drawings and hydraulic flow calculations.

10 After the final invoice was delivered in August 2005, the architect contacted the Plaintiff complaining of a sewage odour. This odour was traced back to a defective exhaust fan in the washroom. The installation of the exhaust fan was done by the Plaintiffs electrical trade in July 2005. The repair work on the fan was done on January 27, 2006. The Defendants argue that the work on January 27, 2006 was clearly repair work in relation to defective wiring and cannot extend the time to register the lien.

11 The Plaintiff admits that the air balancing report was completed on November 17, 2005. However, they did not deliver the report until January 26, 2006. The Defendants argue that late delivery of this report cannot extend the time to register the lien.

12 The Plaintiff billed for completed sprinkler work (the sprinklers were installed, removed and relocated) in August 2005. However, it did the work without obtaining the proper permit. The City of Vaughan required proper sprinkler drawings and hydraulic flow calculations before it would issue a permit for such work. The architect wrote to the Plaintiff on August 18, 2005 to request that the situation be rectified. In response the Plaintiff attempted to obtain a permit by submitting drawings for the sprinkler system in approximately November 2005, which was after the sprinkler work had already been done.

13 The Plaintiff did not complete a hydraulic flow test or proper sprinkler drawings. The Defendants engaged another company (" Vipond") in March 2006 in order to complete sprinkler drawings, perform a hydraulic flow test and to relocate and reinstall the sprinkler heads in order to meet Ontario Building Code, O. Reg. 403/97 requirements. The Defendants submit that the drawings submitted in November 2005 cannot be used to extend the time to register the lien since the work was clearly deficient from the outset.

14 I note the letter in evidence from the Plaintiff to its mechanical contractor, dated January 4, 2006, in which the Plaintiff refers to all of the above items — the fan, the air balancing report and the sprinkler drawings and hydraulic flow calculations — as "deficiencies."

Micon Interiors General Contractors Inc. v. D'Abbondanza..., 2008 CarswellOnt 61562008 CarswellOnt 6156, [2008] O.J. No. 4132, 170 A.C.W.S. (3d) 695... " — :

Next cammm Copyright €) Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

15 The Defendants also take the position that the change orders (which altered the original contract by mutual agreement of the Plaintiff and D'Abbondanza) did not extend the completion date of the contract. Article 6.2.1 of the contract specifies that the onus is on the contractor to provide an adjustment in the contract time where there is a change order. The contractor did not do so here.

16 Further, the Defendants say that the Plaintiff cannot rely on article 6.5.1 of the contract. This article allows for an extension of the contract time where delays are attributable to an action or omission of the owner. The Defendants argue that the delays in this case were solely attributable to the Plaintiffs trades and not the owner. As well, such an extension cannot take effect unless the contractor provides written notice as per article 6.5.4. No such written notice was given by the contractor here.

17 Counsel for the Defendants also relies on the transcript of the cross-examination of the principal of the Plaintiff, Mr. Presswood, dated March 18,2008. Mr. Presswood admitted that, in sending an e-mail and final invoice to the architect on August 3, 2005, he believed that all of the work was done and that the invoice he sent was final. Further, he sent an e-mail to the architect on September 2, 2005 inferring that his lawyer would be registering a lien, but hoped that the matters could be worked out. A lien was not registered at that point. Finally, Mr. Presswood sent e-mails to the architect on November 29, 2005 and December 8, 2005 asking that the holdback money be released as the forty-five day period had elapsed.

ii) The Plaintiff s Position

18 The Plaintiff argues that the contract was never complete, and thus, although s. 31 (2)(b) is the correct subsection to be applied, the prerequisite completion never occurred such that the lien has not expired.

19 The Plaintiff argues that the Defendants' pleadings make reference to the fact that the work was not completed. He specifically refers to paragraphs 6 and 20 of the Statement of Defence and Counterclaim. These paragraphs were not amended in the Defendants' Amended Statement of Defence and Counterclaim. The Plaintiff submits that the Defendants cannot plead that the work was incomplete and then depose in affidavits in this motion that the work was complete, but that deficiencies remained outstanding. In response, the Defendants submit that their counterclaim for completion of the defective work cannot, by itself, extend the time for the Plaintiff to preserve the lien.

20 The Plaintiff agrees that whether the contract was "completed" under s. 31(2)(b) is paramount. It refers to the definition of completed under s. 2(3) of the Construction Lien Act, which specifies as follows:

For the purposes of this Act, a contract shall be deemed to be completed and services or materials shall be deemed to be last supplied to the improvement when the price of completion, correction of a known defect or last supply is not more than the lesser of,

(a) 1 per cent of the contract price; and

(b) $1,000.

21 The contract price in this case (without change orders, but including GST) was $178,391.47. One per cent of this price would be in the range of $1,784.00. The lesser of this amount and $1,000.00 is $1,000.00. The Plaintiff therefore takes the position that the contract was not complete as it was going to cost more than $1,000.00 to complete the remaining work. In support of this contention, the Plaintiff points to the invoices produced by the Defendants showing the cost to repair defects at over $23,000.00 (which included just over $3,000.00 for the air balancing report and just under $20,000 for the work related to the sprinklers).

22 The Plaintiff argues that the Defendants are applying the wrong test in looking at whether the principal of the Plaintiff, Mr. Presswood, thought the contract was complete. Rather, the issue is whether the contract was complete as per s. 2(3) of the Construction Lien Act.

Micon Interiors General Contractors Inc. v. D'Abbondanza.,., 2008 CarswellOnt 61562008 CarswellOnt 6156,"[2668] O.J. No. 4132,1?Q :

'Nexti-CAMAOA Copyright®) Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

Micon Interiors General Contractors Inc. v. D'Abbondanza,.., 2008 CarswellOnt 6156_______ _ - — —

B. Proceeding under the Simplified Procedure

23 With the amendment to the Defendants' Counterclaim now in effect, the matter may fall under the Simplified Procedure. The difficulty is that this procedure would preclude discovery, and there is an outstanding order for discoveries. Also, a construction lien matter may not proceed under the Simplified Procedure. As such, these arguments apply only if the lien is discharged as a result of this motion.


24 The Defendants argue that the amendment to their counterclaim mandates that this matter proceed under the Simplified Procedure. They argue that, so long as the counterclaim is under the $50,000.00 limit, the matter must proceed under the rules of Simplified Procedure.

25 The rules of Simplified Procedure do not permit discovery. However, the Defendants argue that, since the total claims are now only $57,800.58, discoveries would no longer be cost efficient in any event.

26 The Defendants deny that they have attempted to avoid the pre-trial judge's order requiring discoveries prior to August 30, 2007. It is their view that it would not have made sense to have discoveries prior to this motion, which may dictate the most cost-efficient course of events in terms of discovery. They submit that both parties have submitted a comprehensive affidavit of documents, and that extended discoveries are no longer a reasonable financial proposition. If the lien is not discharged, the Defendants do not oppose a more limited form of discovery, more in the nature of one day of discovery for each party.


27 The Plaintiff takes the position that the Simplified Procedure does not encompass a matter where the combined claims are in excess of $50,000.00. Since the amount of the combined claim and counterclaim is $57,800.58, the Plaintiff argues that the matter must proceed under the ordinary rules even if the lien is discharged.

28 The Plaintiff insists that discoveries proceed expeditiously as per the consent order.

C. Security for Costs

29 The Defendants move for security for costs on the basis that the Plaintiff has not carried on any business since the work at 110 Adesso. It does not own any property, equipment or substantial assets.

30 If the lien is discharged, security for costs may be granted by the court under rule 56.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. If the lien is not discharged, the Defendants must show that security for costs is necessary or will expedite resolution pursuant to s. 67(2) of the Construction Lien Act.


31 The Defendants say that the cross-examination of Mr. Presswood, the principal of the Plaintiff corporation, revealed the following: the Plaintiff has no current projects, its last work done was the work at 110 Adesso and it has no vehicles, equipment or buildings. Mr. Presswood undertook to indicate how much cash the corporation had, but failed to answer that undertaking. Further, the Plaintiff has "associated companies" and has used these companies, which have slight variations on the corporate name, over the course of its dealings with the Defendants.

32 The Defendants argue that the Plaintiff is not a going concern. Therefore, any Offers to Settle served on the Plaintiff will have no effect. Ordering security for costs would in fact encourage settlement negotiations, according to the Defendants.

!Next:. CM«o* Copyright <s> Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 4

Micon interiors General Contractors Inc. v. D'Abbondanza..., 2008 CarswellOnt 6156

'

33 The Defendants have submitted a bill of costs on this motion showing a range of requested costs with a low cost of about $37,000.00 and a high cost of about $49,000.00. At this point, however, the Defendants would be satisfied with security in the amount of $20,000.00 on the understanding that security for costs would be "staged" such that a further deposit would be required at a future date. They would seek to revisit this issue at a future pre-trial.


34 The Plaintiff objects to paying any security for costs. It argues that the Defendants' bill of costs cannot be relied upon because it is based on costs incurred when the counterclaim was still $400,000.00. Further, the bill of costs includes four days of discoveries, which have never taken place.

35 The Plaintiff denies that security for costs is required to motivate it to settle. Counsel for the Plaintiff advised that a formal offer to settle from his client has already been served.

36 Finally, the Plaintiff submits that security for costs in the amount of $20,000.00 is grossly excessive where it is almost equal to the amount being claimed by the Plaintiff.

The Issues and the Law

37 This motion presents the following issues:

1. Should the lien be discharged because it expired, and was not preserved, in accordance with the Construction Lien Act? The Construction Lien Act provides that the lien at issue expires forty-five days from the date the contract was complete. Thus, in determining whether the lien should be discharged, the court must examine if any of the work done by the Plaintiff after the final invoice was sent out was work required to complete the contract.

2. If the lien is discharged, can the matter proceed under the Simplified Procedure given that the combined amount of the claim and counterclaim is now over $57,000?

3. Whether or not the lien is discharged, are the Defendants entitled to security for costs on the ground that the Plaintiff corporation has no assets in Ontario? If security for costs is granted, what amount should be ordered considering the amounts in issue and the Bill of Costs tendered by the Defendants?

A. The Construction Lien

38 This court has the authority to declare that a lien has expired and shall be vacated by s. 45 of the Construction Lien Act, which provides as follows:

45. (1) Where a lien that attaches to the premises is not preserved or is not perfected within the time allowed for doing so under section 31 or 36, the court upon,

(a) the motion of any person without notice to any other person;

(b) proof that the lien has not been preserved or perfected within the time allowed; and

(c) production of,

(i) a certificate of search under the Land Titles Act, or

(ii) a registrar's abstract under the Registry Act, together with a certified copy of the claim for lien, shall declare that the lien has expired and order that the registration of the claim for lien be vacated.

Next;. CANADA Copyright 6; Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 5

(2) Where the court is satisfied that a lien that does not attach to the premises has not been preserved or perfected within the time allowed for doing so under section 31 or 36, the court upon the motion of any person without notice to any other person shall declare that the lien has expired.

(3) Where a declaration is made under subsection (1) or (2), the court shall order that,

(a) any amount that has been paid into court under section 44 in respect of that lien be returned to the person who paid the amount into court; and

(b) any security that has been posted under section 44 in respect of that lien be cancelled.

39 The court also has a general power to discharge a lien by s. 47 of the Construction Lien Act, which provides as follows:

47. (1) Upon motion, the court may,

(a) order the discharge of a lien;

(b) order that the registration of,

(i) a claim for lien, or

(ii) a certificate of action, or both, be vacated;

(c) declare, where written notice of a lien has been given, that the lien has expired, or that the written notice of the lien shall no longer bind the person to whom it was given; or

(d) dismiss an action, upon any proper ground and subject to any terms and conditions that the court considers appropriate in the circumstances.

40 As previously discussed, both parties agree that the lien in this case may be preserved under s. 31 (2)(b) of the Construction Lien Act. This subsection applies to the lien of a contractor for services or materials supplied to the improvement where there is no certification or declaration of the substantial performance of the contract. This type of lien "expires at the conclusion of the forty-five-day period next following the occurrence of the earlier of, (i) the date the contract is completed, and (ii) the date the contract is abandoned." The parties agree that the contract was not abandoned, thus the issue becomes whether, and when, the contract was completed.

41 As previously set out in this judgment, the test for determining when a contract is deemed to be completed is set out in s. 2(3) of the Construction Lien Act. Accordingly, in this case, the "contract shall be deemed to be completed and services or materials shall be deemed to be last supplied to the improvement when the price of completion, correction of a known defect or last supply of materials" is not more than $1,000.00.

42 Although the test is not whether or not the Plaintiff thought that the contract was complete as of August 3, 2005 (when the Plaintiff sent the final invoice), the August 3,2005 date is an important starting point because the parties agree that there were only three issues outstanding as of this date — the electrical work on the fan, the air balancing report and the work related to the sprinklers and the hydraulic flow test in order to obtain a permit from the City of Vaughan. If these issues do not represent the completion, correction of a known defect or last supply of materials worth more than $1,000, the contract will be deemed to be complete as of at least August 3, 2005. In that case, the Plaintiffs lien, which was registered on March 9, 2006, would have expired as it was well past the forty-five day period after completion, as specified in s. 31(2)(b) of the Construction Lien Act.

i) Does the Exhaust Fan Work Extend Completion of the Contract?

Micon interiors General Contractors Inc. v. D'Abbondanza..., 2008 CarswellOnt 61562008 CarswellOnt 6156, [2008] O.J. No. 4132, 170 A.C.W.S. (3d) 695... ' ' : : ——

'Next cahaoa Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 6

Micon Interiors General Contractors Inc. v. D'Abbondanza..., 2008 CarswellOnt 6156

43 I turn first to whether the work on the exhaust fan after August 3, 2005 was work to complete the contract, to correct a known defect or related to the last supply of materials. The original work in installing the fan was done in July 2005. However, the wiring for the fan was defective, which caused the fan to work improperly. The Plaintiff admitted that the wiring work was defective. However, the defect was not "known" at the time the final invoice, which included the price for installing the fan, was sent in August 2005. An e-mail was sent by the architect to Mr. Presswood on November 10,2005 about an unpleasant odour in the washrooms. The exhaust fan problem was then confirmed by Mr. Presswood in his e-mail to the architect, dated November 29, 2005. The repair was effected on January 27, 2006.

44 I do not think there can be any doubt that the work on the fan was repair work. Does work to complete the contract include repair work, such that this work would extend the date of completion?

45 Counsel for the Defendants argues that repair work cannot operate to extend the date of completion. Counsel relies on Canadian Rogers Eastern Ltd. v. Canadian Glass, [1993] O.J. No. 2985 (Ont. Master) ("Canadian Rogers"). This case was also a motion under s. 47(1) of the Construction Lien Act to discharge a lien on the ground that it was registered too late. The defendants in that case also argued that repair work done by the plaintiff could not operate to extend the time to claim the lien. The court agreed. In that case, the plaintiff disputed that there were "deficiencies" that it was responsible for repairing, but ultimately agreed to do the repair. In the case at hand, the Plaintiff does not dispute that there were deficiencies that required repair. I refer to the letter sent by the Plaintiff to its own mechanical contractor, dated January 4, 2006, which is attached as Exhibit "F" to the reply affidavit of Lisa D'Abbondanza, sworn August 28, 2008, in which the Plaintiff refers to all three of the outstanding issues as "deficiencies."

46 The Plaintiffs counsel strenuously argued that I cannot rely on this case as it does not apply the proper test. The lien in the Canadian Rogers case fell under s. 31 (3)(b)(i) of the Construction Lien Act. This subsection relates to liens of "other persons" and not contractors. It is usually meant to encompass subcontractors. Subsection 31(3)(b) specifies that this type of lien for services or materials supplied to the improvement "expires at the conclusion of the forty-five-day period next following the occurrence of the earlier of, (i) the date on which the person last supplied services or materials to the improvement, and (ii) the date a subcontract is certified to be completed under section 33, where the services or materials were supplied under or in respect of the subcontract."

47 With respect, I disagree that this distinction between s. 31 (3)(b)(i) and 31 (2)(b)(i) is determinative. Subsection 31 (3) (b)(i) refers to the date on which the person last supplied services or materials to the improvement. Subsection 31(2)(b)(i) refers to the date the contract was completed. Subsection 2(3) specifies that a contract shall be deemed to be complete and services or materials shall be deemed to be last supplied to the improvement when the price of completion, correction of a known defect or last supply is not more than a specified amount.

48 I also refer to David I. Bristow et al., Construction Builders' and Mechanics' Liens in Canada, 7th ed., loose-leaf (Toronto: Thomson Carswell Limited, 2005), vol. 1 at pages 6-62 and 6-63. The authors also cite the Canadian Rogers case for the proposition that the performance of work or supply of materials to rectify defective or improper workmanship does not extend the time for filing the claim for a lien. There is no mention that this proposition is restricted to cases falling under s. 31(3) of the Construction Lien Act.

49 Thus, in my view, the principle that repair or deficiency work will not extend the forty-five day period is a broad one. Repair or deficiency work is not included in the last provision of services or the completion of a contract for services.

50 Therefore, for the above reasons, the repair work to the fan on January 27, 2006 does not fall within the categories of work under s. 2(3) that would prevent the contract from being deemed to be complete. Thus, the January 27, 2006 fan repair will not extend the time to register the lien.

51 In the alternative, even if the repair work did qualify as work to complete the contract, there is no evidence concerning the cost of this repair. Since the work for the fan was included in the final August 2005 invoice, I am left with the impression that the Defendants were not charged anything extra for this repair work. Assuming that there was

tlawNeXt-CAHABA Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). Ail rights reserved.

no extra charge, the cost is less than $1,000.00. This outstanding work alone would thus not prevent the contract from being deemed to be complete.

ii) Does the Air Balancing Report Extend Completion of the Contract? '

52 Turning to the air balancing report, in my view, this item relates more to work done in relation to completion of the contract as opposed to the repair of a deficiency. However, the Plaintiff cannot use the fact that, even though the Plaintiff had the report on November 17, 2005, it chose not to give the report to the Defendants until January 26, 2006 as a means to extend the forty-five day period. The fact that the report was delivered late to the Defendants should not extend the time to preserve the lien on the basis that the contract was not complete. To find otherwise would leave the door open for a contractor to, once a document is completed, withhold a document required by the contract in an attempt to delay the completion of the contract months or even years after the actual contract work was completed, all the while keeping open the possibility of registering a lien.

53 Since the completion of the report was considered an item required to complete the contract, I must examine the evidence about the cost of the air balancing report. The invoice for this report was just over $3,000.00, which is higher than $1,000.00, so it was not until this report was completed that the contract was deemed to be completed. The report was ready on November 17, 2005, thus, the contract was completed on this day and the forty-five day period began to run on after this date. The lien was registered on March 9, 2006 and would therefore still be outside the required forty- five day period.

Hi) Do the Sprinkler Drawings and Hydraulic Flow Calculations Extend Completion of the Contract?

54 The last outstanding item related to the sprinkler drawings and hydraulic flow calculations. The contract provided that sprinklers were to be installed, removed and relocated. Sprinkler drawings and a hydraulic flow test should have been submitted to the City of Vaughan in advance of the sprinkler work being done in order for the proper permit to be obtained. The Defendants assumed that, since the sprinkler work was done, the sprinkler drawings and the hydraulic flow test information were already submitted to the City of Vaughan. The architect asked for the drawings and information from the Plaintiff in various e-mails from November 2005 to January 2006.

55 It appears that the sprinkler system drawings were submitted to the City of Vaughan, Fire Prevention Division sometime in November 2005, as a response was sent to the Plaintiffs mechanical contractor by the City of Vaughan, Fire Prevention Division on November 25,2005. The City of Vaughan, Fire Prevention Division requested, among other things, that complete sprinkler drawings and hydraulic calculations, stamped by a Professional Engineer, be submitted.

56 However, the stamped drawings were never submitted, the permit was never obtained and the hydraulic flow test was never done. It was later discovered by the Defendants that the sprinklers were not installed in compliance with the Ontario Building Code, according to the Vipond report.

57 As a result of the above, I find that the Plaintiff completed the initial sprinkler work, albeit improperly and without the required permit. The fact that the work was done without a proper permit was not a known deficiency as of August 3, 2005. Once the deficiency was discovered, the deficiency was not corrected by the Plaintiff.

58 The important issue here was whether the contract work itself was completed past August 3, 2005. As I have found that the sprinkler work was repair work, which would not operate to extend the time for registering the lien in itself, the completion date of the contract was still prior to or on August 3,2005. The outstanding sprinkler drawings and hydraulic flow calculations were deficiencies that were not known as of August 3, 2005 and, thus, will also not extend the completion date of the contract. In contrast, the air balancing report was work to complete the contract, but the completion date would only be extended to November 17,2008, the date the report was ready. Even with this extension, the lien was still registered well past the forty-five day period after the contract was completed.

Micon Interiors General Contractors Inc. v. D'Abbondanza..., 2008 CarswellOnt 61562008 CarswellOnt 6156, [2008] OJ. No. 4132, 170 A.C.W.S. (3d) 695... ' “ ~ '

Nlext-CANftDA Copyright ® Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

59 I am aware of the discrepancy between the Defendants' pleadings and their affidavit with respect to the use of the word "complete." However, the pleadings use the word "complete" in the context of work that should have been done, but which was actually done improperly or deficiently. This situation is different from completing the remainder of the work on a contract. I do not accept that this discrepancy on its own is sufficient to confirm that the lien was properly preserved in the circumstances.

60 I also do note that the Plaintiff did not avail itself of the proper written notice provisions under the contract in relation to extra work, which would operate to extend the completion date of the contract.

61 For all of the above reasons, I conclude that the lien was not preserved and has thus expired under s. 31(2)(b) of the Construction Lien Act.

B. Proceeding under the Simplified Procedure

62 Having found that the lien was not properly preserved within the forty-five day period, I turn to the issue of how this action will proceed in the future. The matter is no longer one under the Construction Lien Act. It becomes a contract case. Given the amounts now in question, does the case come under the jurisdiction of the Simplified Procedure?

63 In my view, the Plaintiffs reading of the Simplified Procedure is incorrect. Because the Plaintiffs claim is under $50,000.00, exclusive of interests and costs, it is mandatory that the Simplified Procedure apply pursuant to rule 76.02(1) of the Rules of Civil Procedure. One must then examine whether the counterclaim of $35,000.00 has any bearing on the mandatory provisions in rule 76.02(1). Rule 76.02(2) provides as follows: "If there are two or more plaintiffs, the procedure set out in this Rule shall be used if each plaintiffs claim, considered separately, meets the requirements of subrule (1)." In this case, each plaintiffs claim (the Plaintiffs claim being for $22,800.58; the Defendants' counterclaim being for $35,000.00) meets the requirements set out in rule 76.02(1). Thus, the Simplified Procedure must apply.

64 There is also the issue of discoveries. There is an outstanding order for discoveries. However, since the matter is now under the jurisdiction of the Simplified Procedure, discoveries may not proceed. This situation would be more difficult if one party had completed discoveries and the other had not. However, since neither party has completed discoveries, I find that there is minimal prejudice to either party. The parties have produced seven volumes of disclosure through their respective affidavit of documents. The affidavits and exhibits in this motion also provide comprehensive material. The order for discoveries will be vacated in the circumstances.

C. Security for Costs

65 As for the issue of security for costs, it must now be decided based on rule 56.01 since the matter is no longer a construction lien case. Under rule 56.01(d), the court may order security for costs as is just where it appears that "the plaintiff or applicant is a corporation...and there is good reason to believe that the plaintiff or applicant has insufficient assets in Ontario to pay the costs of the defendant or respondent".

66 The Plaintiff admits that its business has not operated in more than two years and has no assets. The Plaintiff appears unwilling to disclose if it has any cash assets and I draw an adverse inference from this non-disclosure. The Defendants need not prove that the Plaintiff has insufficient assets to satisfy a costs order, but only that there is "good reason to believe" that that is the case: see rule 56.01(d) and Warren Industrial Feldspar Co. v. Union Carbide Canada Ltd. (1986), 54 O.R. (2d) 213 (Ont. H.C.) ("Feldspar"). Although it is not necessary according to the Feldspar case, I find that the Defendants have proven that the Plaintiff has no assets. Their evidence goes beyond simply providing the court with a good reason to believe that these circumstances are true.

67 The more difficult issue here is the amount of security for costs that should be ordered. I agree with counsel for the Plaintiff that the Defendants' bill of costs is somewhat distorted in that it includes the cost of discoveries (which will no longer take place) and likely includes time and effort in relation to preparing pleadings and disclosure relating to

Micon Interiors General Contractors Inc. v. D'Abbondanza..., 2008 CarswellOnt 6156'2008 CarswellOnt 6156; [2008] O.J. No. 4132, 170 A.C.W.S. (3d) 695... ..... ' ;

WesttawNexUcANABA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

a far larger counterclaim than is now the case. The Defendants seek $20,000.00 as an initial deposit for a stage order for security for costs. In my view, this is excessive. Keeping in mind that the matter is now a contract case under the Simplified Procedure in which there will be no discoveries, the costs will be much less than originally anticipated. Further, there remains only a pre-trial and then a summary trial for the matter to be concluded. Taking these factors into account, I fix the amount of security for costs at $7,500.00.

The Order

68 Given all of the circumstances outlined above I make the following orders:

1. Leave is given to the Defendants to amend the Statement of Defence and Counterclaim as per the draft attached as Exhibit "E" to the Affidavit of Lisa D'Abbondanza, sworn July 3, 2008.

2. The Plaintiffs claim for lien was not preserved in accordance with the requirements of the Construction Lien Act and has expired.

3. An Order shall issue vacating the claim for lien being Instrument No. YR787704 (R.O. No. 65), which was registered against the lands and premises described in paragraph 63(iii) of the Defendants' factum, dated September 11,2008.

4. An Order shall issue vacating the certificate of action registered as Instrument No. YR802823 (R.O. No. 65), which was registered against title to the units described in paragraph 3 herein.

5. This matter shall continue under the Simplified Procedure, which means that there shall be no discoveries.

6. The Plaintiff shall pay security for costs in the amount of $7,500.00, which shall be paid into court within sixty days of the date of this Order.

69 I have the parties' submissions on costs. It is my view that costs should be paid to the Defendants on a partial indemnity scale. I have reviewed the amounts outlined by counsel for the Defendants. Mr. Ross was called to the bar in 2005 and I view his partial indemnity rate to be reasonable. I allow his disbursements as claimed in the full amount of $1396.19 inclusive of GST.

70 This motion essentially had four issues to be decided. The first part dealing with the amendment of pleadings was done on consent so I do not factor in time for that. A separate and distinct decision was required on the remaining three issues. The issue relating to the discharge of the lien was somewhat complex and the transcript from the crossexamination was useful to me in arriving at my decision. Although no offers to settle were made on the motion, Mr. Ross was successful albeit the security for costs ordered was considerably less than what was requested. As such, I order costs based on twenty-five hours of time for Mr. Ross being $4425.00 plus GST plus disbursements. Counsel for the Plaintiff to serve a form 76C as soon as amended pleadings are closed and the costs of this motion shall be paid by the Plaintiff prior to the Pre-Trial Conference.

Motion granted.

Micort Interiors General Contractors Inc. v. D’Abbondanza..., 2008 CarswellOnt 61562008 CarswellOnt 6156, [2008] O.J. No. 4132, 170 A.C.W.S. (3d) 695... " “ '


'lext; CANADA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

TAB “6”

Applewood Glass & Mirror Inc. v. Baun Construction Inc., 2009 CarsweilOnt 7122

2009 CarswellOnt 7122, [2009] O.J. No. 4845, 182 A.C.W.S. (3d) 475... — '

fefos, o "i2-


Applewood Glass & Mirror Inc. v. Baun Construction Inc.


In the Matter of the construction Lien Act, R.S.0.1990, c. C.30, as amended

APPLEWOOD GLASS & MIRROR INC. (Plaintiff) and BAUN CONSTRUCTION INC., THE CORPORATION OF THE CITY OF TORONTO, CLOCK TOWER HOTEL LIMITED PARTNERSHIP,

STARWOOD CANADA CORP., SHERATON LIMITED, 1144020 ONTARIO LIMITED carrying on business as INN ON THE PARK, and FOUR SEASONS HOTELS LIMITED (Defendants)

Master Polika

Heard: September 24, 2009 Judgment: November 13, 2009

Docket: 06-CV-323143

Counsel: H. Richard Bennett for PlaintiffPatrick A. Greco for Defendants, Sheraton Hotels Ltd., Starwood Hotels & Resorts Worldwide Inc., Starwood Canada Corp., Clocktower Hotel Limited Partnership, Corporation of the City of Toronto


ACTION by subcontractor for balance due and owing.

Master Polika:

1 The plaintiff claims against Starwood Canada Corp. and Clocktower Limited Partnership as leasehold owners the sum of $50,236.50 as the balance due and owing on the contract with the defendant Baun Construction Inc. for the supply of labour and materials in respect of certain door frame work and entrance replacement at the Sheraton Centre at 123 Queen Street West in Toronto together with a claim for lien for that amount.

2 The plaintiff obtained a default judgment against the defendant Baun Construction Inc. on March 30, 2007 in the amount of $51,772.50 plus costs in the amount of $1,450.52. Left before me is the claim against Starwood Canada Corp. and Clocktower Limited Partnership and specifically the issues of timeliness of the plaintiffs claim for lien and the liability of Starwood Canada Corp. and Clocktower Limited Partnership, the leasehold owners, for holdback.

3 The reference commenced before me by way of first pre-trial for directions on May 22,2007 pursuant to the judgment of reference granted by Justice Brown on March 15,2007 in court file number 06-CV-314301. There were some ten claims for lien registered on title in two streams. The plaintiffs claim for lien was the sole claim for lien in one stream. After a number of pre-trials on June 8,2009 I fixed Friday September 25, 2009 as the trial date with one day set aside for trial. On June 16, 2009 the trial date was changed to Thursday September 24, 2009.

4 The trial was held on Thursday September 24, 2009. The defendant Baun Construction Inc. did not appear rather its counsel sent a letter by facsimile transmission on September 21, 2009 addressed to the two counsel who did appear and to me advising that he and his client did not intend to appear as it appeared to be an issue between the plaintiff and the leasehold owners unless I was "of the opinion that my client and/or I should be in attendance, I would respectfully ask that Master Polika's Clerk contact me." It is not up to me to decide how a party and its counsel participate in the

WesuawNext:. canaoa Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 1

reference. It is their decision to make and not mine. In the result neither the defendant Baun Construction Inc. nor its counsel appeared notwithstanding they had notice of the trial and the trial proceeded without them.

Agreed To Facts and the Witnesses

5 At the commencement of trial the parties before me tendered the following agreed statement of facts which was marked as Exhibit 1:

1. The Plaintiff ("Applewood") entered into a construction contract with Baun Construction Inc. ("Baun") on February 22, 2009 for the installation of various doors, materials and labour as improvements to the lands described in Schedule "A" annexed hereto (the "Applewood Contract").

2. The value of the Applewood Contract, inclusive of GST, is $50,236.50.

3. Applewood supplied all labour and materials to Baun pursuant to the Applewood Contract.

4. There are no issues of deficiencies in respect of the Applewood Contract, save and except as they may relate to the issue of the timeliness of Applewood's claim for lien, which is an issue for trial as outlined in paragraph 13 below.

5. Applewood invoiced Baun for $50,236.50.

6. Applewood has not received any payment from Baun in respect of Applewood Contract.

7. Applewood registered a claim for lien and a certificate of action on title to the Lands.

8. The Defendant Starwood Canada Corp. and Clocktower Hotel Limited Partnership (collectively "Starwood") are leasehold owners of the Lands, and is an "owner" within the meaning of the Construction Lien Act (Ontario).

9. Baun entered into a construction contract with Starwood on or about June 15, 2005 for the installation of various doors, materials and labour as improvements to the Lands (the "Baun Contract").

10. The value of the Baun Contract is $124,560 plus GST of $8,719.20 for a total of $133,279.20.

11. The quantum of the holdback, should this Honourable Court rule is due and owing, is $13,327.92.

12. Starwood paid Baun the sum of $133,279.20 in respect of the Baun Contract, inclusive of GST andholdback.

13. The only issue for trial is the timeliness of the claim for lien of Applewood and the liability of Starwood for holdback.

6 On behalf of the plaintiff two witnesses were called, Tony Menecola, a director, president and owner of the plaintiff. He had 30 years experience in the industry. He gave his evidence in chief and was cross-examined. The second witness for the plaintiff was Robert Kelly Ryan a 14 year employee of the plaintiff and presently a foreman with the company. He testified as to his sole involvement with the contract namely that on September 1, 2007 he attended the site of the improvement to change the butt hinge on one of the doors on the ground floor east Richmond Street entrance to that specified in the contract, the electric transfer butt hinge, with the exchange taking only minutes.

The Salient Facts Disclosed By the Evidence

7 The salient facts as admitted and as testified to in addition to the agreed to facts I find to be as follows:

Applewood Glass & Mirror Inc. v. Baun Construction Inc., 2009 CarswellOnt 71222009 CarswellOnt 7122, [2009] O.J. No. 4845, 182 A.C.W.S. (3d) 475... ' ' ' ‘ ~

NexLcANABA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

(a) The premises the subject of the improvement provided for in the subcontract between the plaintiff and the defendant Baun was the Sheraton Centre Toronto located between Queen Street West and Richmond Street running east from York Street.

(b) The plaintiffs contract with the defendant Baun was entered into on February 22, 2009 in the amount of $50,236.50 and included in the subcontract was the provision of an electric latch and electric transfer butt hinge on one of the doors ("the Door") being replaced at the ground floor east Richmond St. entrance of the Sheraton Centre Toronto.

(c) The plaintiff ordered all the necessary door parts which were supplied by Kawneer Company Canada Limited comprising of approximately four pair of doors, one single door, all specified door pulls and openers, sweeps, stops, hardware and hinges for the doors including the electric transfer butt hinge as well as framing which was billed by Kawneer in the form of two omnibus accounts totalling $19,313.17.

(d) An ordinary butt hinge rather than the specified electric transfer butt hinge was initially installed on the Door by the plaintiff.

(e) Notwithstanding that there was evidence in the form of an undated page of Kawneer price list showing the list price of the hinge at $560.00 if ordered separately, the defendant chose not to provide the list prices of all the material supplied by Kawneer such that it was not possible on the evidence before me to determine exactly the value of the electric transfer butt hinge as supplied. The defendant did not adduce any evidence to show that it was not possible to provide all the list prices for the material supplied by Kawneer. In these circumstances I have drawn the inference that based on the total supply by Kawneer that the actual price of the electric transfer butt hinge was obtained at a price lower than the list price.

(f) The value of the defendant Baun's contract with the leasehold owners was $133,279.20 inclusive of GST, the defendant Baun was paid in full without any determination of the state of Baun's accounts with its subcontractor, the plaintiff, by the leasehold owners, and the leasehold owner's holdback obligation is $13,327.92

(g) Applewood commenced its supply on May 5, 2006. On May 25, 1906 it rendered its first invoice for 95% of the supply. On June 25, 2006 it rendered its invoice for the remaining 5% of the supply and a second invoice for the holdback. Mr. Menecola testified it was his belief as of June 25, 2006 that all of the supply on the contract was completed. In fact the supply was completed save that an ordinary butt hinge had been installed instead of the electric transfer butt hinge. No payment was ever made by Baun on the contract or on account of the rendered invoices.

(h) Forty-five days from June 25,2006 expired on August 9, 2006.

(i) Mr. Menecola stated that an employee brought to his attention shortly after June 25, 2006 the fact that the electric transfer hinge had not been installed. He testified it was then obtained from Kawneer but was short on any particulars of how and when. No attempt was made by the plaintiff to advise Baun prior to August 21, 2006 that the installation of the electric transfer butt hinge was outstanding and that a butt hinge had been installed instead. Although the plaintiff produced substantial documentation relating to the subcontract it did not provide any documentation or corroborative evidence relating to the alleged subsequent supply by Kawneer of the alleged missing electric transfer butt hinge or any acceptable explanation why such evidence was not available.

(j) Mr. Menecola however testified candidly that the supply of the electric transfer butt hinge was used by him as a lever to extract payment from Baun. Based on the evidence before me the inference is that the electric transfer hinge was deliberately not installed to insure that the time for claiming a lien could be extended to ensure payment from Baun.

Applewood Glass & Mirror Inc. v. Baun Construction Inc., 2009 CarswellOnt 71222009 Carswel'lOnt 7122, [2009] O.J. No. 4845,182 AC.W.S. (3d) 475... ' ' ”

awNext cahad* Copyright & Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

(k) On August 21, 2006 by facsimile transmission the plaintiff demanded payment by August 23, 2006 from Baun or a lien would be registered against the property. At this point in time, forty-five days had run its course from the last supply save for the supply of the electric transfer butt hinge.

(l) On August 23, 2006 by facsimile transmission Baun advised would pay all outstanding invoices if deficiencies were repaired by September 1, 2006.

(m) Mr. Ryan on September 1, 2006 in a few minutes changed out the ordinary butt hinge installing the electric transfer butt hinge.

(n) The plaintiffs claim for lien registered on October 16,2006 setting out that the time within materials and services were supplied was between May 5,2006 and September 1, 2006

Timeliness of the Claim For Lien

8 It is trite law that the evidentiary burden is on a lien claimant, here the plaintiff, to prove timeliness on a balance of probabilities. Pursuant to section 31 of the Construction Lien Act the lien of the plaintiff arising from its supply of goods and services to the improvement expires at the conclusion of the forty-five day period next following the date on which the plaintiff last supplied services or materials to the improvement.

9 The leasehold owners rely on the decision of Justice Di Tomaso in Blockwall Masonry Ltd. v. Arcaio Design, 2007 CarswellOnt 5451 (Ont. S.C.J.), for the proposition that once there is a 45 day lapse in services or materials being supplied by a subcontractor the right to file a claim for lien is lost by the subcontractor. With respect I cannot agree. In my opinion his reading of section 31(3)(b)(i) is far too restrictive and not in keeping with the plain wording of the section. For example if a subcontract called for material and/or services to be provided over a the span of a year and material and services could not be supplied for a sixty day period during the year because intervening work had to be performed by the contractor the subcontractor in my opinion would still have a claim for lien for material and services supplied before and after the sixty day period providing the claim for lien was registered within the forty-five day next following the "last supplied services or materials" pursuant to the subcontract. Each lapse of time during the currency of a subcontract in my opinion does not cause the forty-five day period to run rather it is the last legitimate supply of services or materials under the contract that does.

10 I am in agreement with the second basis upon which Justice Di Tomaso determined the lien expired, namely that an attempt to bootstrap lien rights after their expiry by additional work will not extend the time within which the claim for lien must be registered failing which it is not preserved.

11 The leasehold owners also rely on the acceptance by Master Sandler in Canadian Rogers Eastern Ltd. v. Canadian Glass, [1993] O.J. No. 2985 (Ont. Master) and in Arcon Group Inc. v. Jelco Construction Ltd., [2001] O.J. No. 4661 (Ont. Master) of the proposition that "doing work to rectify defective or improper work does not extend the time for registering a claim for lien." I am in full agreement with Master Sandler and fully accept the proposition.

12 In addition the leasehold owners rely on the proposition put forward in Wildberry Homes Inc. v. Prosperity One Credit Union Ltd., [2008] O.J. No. 5441 (Ont. S.C.J.) by Justice Murray that a trivial amount of work performed or services supplied after completion of a contract will not serve to extend the time within which a claim for lien must be registered. I too accept this proposition.

13 All of these propositions however are dependant on the underlying factual situation in which they are sought to be applied. I find on the evidence before me that the last supplied services or material under the subcontract was at the very latest June 25, 2006 and that the date for registering a claim for lien by the plaintiff for the supply of services and materials under the subcontract expired on August 9, 2006. Based on the facts as I have found them, I conclude that the replacement of the butt hinge by Mr. Ryan with the electric transfer butt hinge amounts to a trivial amount of work

Applewood Glass & Mirror Inc. v. Baun Construction Inc., 2009 CarsweilOnt 71222009 CarswellOnt 7122, [2009] O.j. No. 4845, 182 A.C.W.S. (3d) 475... ' : " ~

Next. ChMPSh Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

performed after completion of the subcontract to rectify improper work and did not extend the time by which the claim for lien had to be registered. I also find that the installation of the electric transfer butt hinge was delayed solely in an attempt to act as an insurance policy to extend the time within which a claim for lien could be advanced if payment was not made by the defendant Baun. Either situation I find cannot extend the time for registering the claim for lien. For the aforesaid reasons I find the claim for lien of the plaintiff was not registered in time.

Liability For Holdback

14 Given my findings and conclusion on the issue of timeliness the question of liability for holdback becomes moot. However if I am wrong in my determination that the claim for lien was not filed in time I find that Starwood Canada Corp. and Clocktower Limited are liable for holdback to the plaintiff in the amount agreed to, $13,327.92.

15 Pursuant to section 22(1) Starwood Canada Corp. and Clocktower Limited had an obligation to retain the holdback "until all liens may be claimed against the holdback have expired ... or have been satisfied, discharged or provided for under section 44." Starwood Canada Corp. and Clocktower Limited paid the defendant Baun Construction Inc. in full, that is without retaining the required holdback prior to the expiry of the plaintiffs claim, assuming my findings and conclusions as to timeliness are wrong, and thus would be liable to the plaintiff for the agreed to holdback amount had I not found the lien not to have been preserved in time.

Summary

16 For the aforesaid reasons I find that the plaintiff fails in its claim as against Starwood Canada Corp. and Clocktower Limited. If necessary, I will determine the issue of costs at the further hearing and at that time I will settle the formal report unless in advance costs and the form of the final report are agreed to by the parties. Any agreed to form of the final report is subject to the approval of the court. Form 21 - Report Under Section 62 of the Act Where Lien Attaches to Premises under the Construction Lien Act should be followed as a guide for the report, but the schedules set out therein are not required as there are only two sets of parties to the Report in this action. The Report will only provide for a dismissal of the action, discharge of the claim for lien and costs. If any offer to settle was made that might impact on costs, I should be advised at such further hearing. If the costs remain in issue the parties shall exchange bills of costs and supporting material as required by Rule 57.01 (5) by no later than Friday, December 4,2009.

17 If the form of the final report is agreed to by the parties, counsel for either party can attend before me alone in advance of December 8, 2009 at any of my 9:30 a.m. ex parte motions courts, to have the report signed. If not, I fix the date for the further hearing on costs, pre-judgment and post-judgment interest and the attendance to settle the report

for 10:00 a.m. Tuesday December 8, 2009 before me at a courtroom on the 6th Floor, 393 University Avenue, Toronto, Ontario when plaintiffs and defendant's counsel are required to attend. Confirmation of the report is governed by Rule 54.09 of the Rules of Civil Procedure.

Action dismissed.

Applewood Glass & Mirror Inc. v. Baun Construction Inc., 2009 CarswellOnt 71222009 Carswel'lOnt 7122, [2009] O.J. No. 4845,182 A.C.WS. 475>>>

End of Document Copyright ©Thomson Renters Canada Limited or its licensors (excludingindividual court documents). All rightsreserved.

WestiawHext;:0«M» cCopyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. S

TAB “7”

Pams, 3.5,1 a. 16Diamond Drywall Contracting Inc. v. Ikram, 2016 ONSC 5411, 2016 CarsweliOnt 13668 '2016 ONSC Mil,"2016 CarswellOnt 13668,270 ..'■ ■ ' ' ' ! ' -----

2016 ONSC 5411Ontario Superior Court of Justice

Diamond Drywall Contracting Inc. v. Ikram

2016 CarsweliOnt 13668, 2016 ONSC 5411, 270 A.C.W.S. (3d) 246

Diamond Drywall Contracting Inc. and Danyal Ikram et al

Master C. Albert

Heard:Judgment: August 26, 2016

Docket: CV-16-556828

Counsel: L.J. Levine, for Defendant / Moving Party R.A. Gosbee, for Plaintiff / Responding Party

Subject: Civil Practice and Procedure; Contracts; Corporate and Commercial; Insolvency

MOTION by homeowners to discharge claim for lien and vacate certificate of action.

Master C. Albert:

1 The defendant owners ("Ikram") ask the court to discharge the construction lien registered by the plaintiff ("Diamond") on May 20, 2016 for $201,253.00 as instrument AT4223739 and to vacate the corresponding certificate of action. The motion is brought pursuant to section 47 of the Construction Lien Act, R.S.O. 1990, c.C.30.

2 Diamond resists the motion on the basis that there are genuine issues of fact and credibility that require a trial.

The issues:

3 The issues are:

a) What is the applicable test under rule 47?

b) Has Ikram satisfied the burden of proving that there are no genuine issues requiring a trial in respect of all or a portion of the lien claim?

The scope of inquiry under rule 47

4 Rule 47 of the Act provides that the court may discharge a construction lien on any proper ground. It is well settled law that a motion brought pursuant to section 47 of the Act is akin to a motion for summary judgment (see: Beaver

Materials Handling Co. v. Hejna citing Dominion Bridge Inc. v. Noell Stahl-Und Maschinebau GmbH ). Both of those cases were decided prior to the shift in the court's approach to summary judgment proceedings brought about by the

decision of the Supreme Court of Canada in Hryniak v. Mauldin .

5 In addressing the delay and expense of protracted litigation the Supreme Court of Canada provided guidance on the expanded use of summary proceedings when the trier of fact is able to reach a fair and just determination on the merits of the motion. The Supreme Court opined that this will be the case when the summary process allows the trier of fact to:

a) Make the necessary findings of fact,

WesUawNext.-CAHAO* Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

Diamond Drywail Contracting inc. v, Ikram, 2016 ONSC 5411, 2016 CarsweliOnt 13668

b) Apply the law to the facts, and

c) The motion process is a more proportionate, more expeditious and less expensive means to achieve a just result.

6 After the Hyrniuk decision Rule 20, the summary judgment rule, was amended to grant expended powers to judges on summary judgment motions. Those expanded powers were not extended to masters hearing rule 20 motions. Diamond argues that as a master I do not have the expanded powers prescribed by rule 20 because those powers do not extend to masters hearing summary judgment motions.

7 I disagree. A motion brought pursuant to rule 47 is not an actual motion for summary judgment. At most, it is a motion "akin" to a motion for summary judgment, quoting Justice Ferrier in Dominion Bridge. A motion under section 47 is made to "the court". The Act does not require such motions to be heard by a judge. Moreover, section 67 of the Act requires the court to adopt procedures in an action that are "as far as possible of a summary character, having regard to the amount and nature of the liens in question".

8 Reading section 47 and 67 together, I find that as a master hearing a motion under section 47 of the Act I am entitled to import all of the powers available on a motion for summary judgment, the motion being akin to a motion for summary judgment. This is particularly important in Toronto Region where the Superior Court of Justice has delegated much of the construction lien work of the court to two masters whose work is devoted in one case exclusively and in the other case partially to construction lien matters.

9 Consequently, to the extent necessary, I conclude that on a motion pursuant to section 47 of the Act I have the jurisdiction to weigh evidence, make findings of fact and apply the law to the facts.

Does the motion raise genuine issues requiring a trial?

10 The test is whether the issues raised on the motion require a trial or whether the court is able to make findings of fact necessary to reach a fair and just determination of the motion.

11 Ikram asks the court to discharge the claim for lien in its entirety on the basis that the lien claim expired prior to registration.

12 Asa direct contractor with the owner, Diamond's lien claim must be registered within 45 days following completion or abandonment of the contract (section 31(2) of the Act). It is well settled law that repair work does not extend lien rights. Similarly, a trivial amount of work performed after a lien has expired does not revive lien rights.

13 Abandonment requires a cessation of work with an intention not to return to complete the work. That is not the case here. Diamond performed work in April, May and possibly June 2015 but then a fire in July 2015 destroyed all of the work they had carried out. Diamond's evidence is that it intended to return to the project once the insurance had paid out the insurance claim arising from the fire and Ikram had paid for the work completed to that date.

14 Diamond had issued three invoices prior to the fire on the dates and in the amounts shown:

a) April 14, 2015 $ 86,445

b) April 29, 2015 $ 33,674

cl June 15. 2015 $ 73,450

$193,569

15 The evidence of payment is unclear. Copies of a bank draft and some receipts filled out improperly were tendered as evidence but there is no evidence from the person signing the receipt on behalf of the alleged payor, Ikram. On this

UswNext;-CANADA Copyright ii Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved

motion I am unable to make any findings of fact as to whether any or all of the amounts invoiced were paid. However, I need not make such findings of fact to reach a determination on this motion.

16 The next question is whether the 2015 contract had been completed. Comparing the amount invoiced and the items listed in the invoices with the contract relied on by Diamond on this motion it is clear to me that all of the work in the contract relied on by Diamond had been completed prior to the final invoice.

17 Ikram's conduct is consistent with a finding that the contract with Diamond was at an end. It obtained a quote from another drywall contractor, Marel, on June 3, 2016. There are text messages in the motion records showing communications regarding payment for earlier work but no texts, emails, letters or other communications about Diamond returning to the project to complete the original contract work.

18 On a motion under section 47 of the Act the responding party must put its best evidence forward to prove that the contract remains ongoing.

19 Much of the evidence is disputed and raises issues of credibility. However, on the issue of whether the original contract had been completed I do not need to rely on any of that contradictory evidence. I rely instead on the fact that Diamond had invoiced for all of the work completed in 2015. By June 15, 2015 Diamond had invoiced Ikram for the entire contract price reflected in the contract relied on by Diamond on this motion and attached as exhibit "F" to the affidavit of Mr. Seferovic. By June 15, 2015 the contract had been completed.

20 I also rely on the fact that the only communications between the parties produced on this motion pertain to getting paid for the 2015 work and not to the return by Diamond to complete the work in the original contract, and that the most controversial issue goes to whether Diamond carried out any work on May 4, 5 and 6, 2016, the dates on which Diamond relies as the last work for purposes of registering a claim for lien.

21 As to the latter point, as already stated, as a direct contractor Diamond's claim for lien runs from completion or abandonment of the contract. For purposes of determining whether the 2015 work was part of the same contract that Diamond relies on for the work it claims to have performed in May 2016,1 need not make findings of fact as to:

a) Whether the contract in Diamond's motion record at Tab F is bona fides,

b) Whether any work was performed on May 4, 5and 6, 2016.

22 I am satisfied that Diamond treated the original contract as at an end. That contract work had been completed. After the fire new permits were required. The house had to be reconstructed and there is no evidence that the original contract continued. If it did it would have continued as a new contract for the same scope of work, but I need not decide that issue.

23 The amounts that Diamond invoiced in 2015 pertain to the contract completed by that date and the last date to preserve a claim for lien in respect of that work expired 45 days thereafter. That lien claim could not be revived by new work after the fire in May 2016.

24 There is conflicting evidence as to whether Diamond carried out specified work on May 4,5 and 6,2016. Diamond's own evidence conflicts: in the claim for lien Diamond asserts that it completed its work on April 29, 2016 but in its affidavit evidence on this motion Diamond claims to have carried out its work on May 4, 5 and 6, 2016. Diamond's evidence is corroborated by a worker.

25 Ikram's evidence, on the other hand, corroborated by the engineer and the carpenter, is that Diamond did not carry out any work on May 4, 5 and 6, 2016 and the house was not sufficiently advanced by May 4, 2016 for Diamond to have been able to carry out the work it claims to have performed on these dates.

Diamond Drywall Contracting Inc, v. Ikram, 2016 ONSC 5411, 2016 CarswellOnt 13668

2016 ONSC 5411,2016 Carswd^ (3d) 246 ' ' ' ' ' '

tfe-CWHAOA Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

26 I find that the issue of fact of whether Diamond performed any work on May 4, 5 and 6, 2016 raises significant issues of credibility that cannot be resolved on a motion. The disputed facts raise genuine issues as to the date of supply of services and materials such that a trial is required.

27 The work performed on those dates, if indeed it is found to have been performed, is reflected in Diamond's invoice of May 10, 2016 for $7,684.

Conclusion

28 For the reasons expressed I find that there is no genuine issue for trial as to $193,569.00 of the amount claimed in Diamond's claim for lien. The lien claim is reduced from $201,253.00 to $7,684.00. Upon the posting of security in the amount of $7,684.00 plus 25 percent for costs (total $9,605) the lien claim and certificate of action may be vacated from title.

29 Diamond's claim for the $ 193,569.00 invoiced in 2015 may continue as a claim in contract.

30 Costs: It is appropriate for costs to follow the event. Having heard the submissions of counsel, and taking into account the relevant factors set out in rule 57.01, rule 1.04, rule 49 and section 86 of the Act costs are fixed at $10,000.00 payable by the plaintiff to the defendant in the cause.

Motion granted.

Diamond Drywail Contracting inc. v. Ikram, 2016 ONSC 5411, 2016 CarsweliOnt 136682016 ONSC 5411,2016 CarswellOnt 13668, 270 A.C.W.S. (3d) 246 : ' —

Footnotes

1 [2005] O.J. No. 2733 (Ont. S.C.J.)

2 1999 CarswellOnt 5067 (Ont. S.C.J.)

3 2014 SCC 7 (S.C.C.) at paragraph 49

End of Document Copyright ft- Thomson Reuters Canada Limited or its licensors (excluding individual court documents). AH rightsreserved.

(VNexfa-CWSABA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. d

TAB “8”

Toronto Zenith Contracting Ltd. v. Fermar Paving Ltd., 2016 ONSC 4696, 2016...________P&ta- 9T ■


Toronto Zenith Contracting Ltd. v. Fermar Paving Ltd.

2016 CarswellOnt 11566,2016 ONSC 4696, 268 A.C.W.S. (3d) 724, 66 C.L.R. (4th) 278

IN THE MATTER OF THE CONSTRUCTION LIEN ACT, R.S.0.1990, c.C.30, AS AMENDED

TORONTO ZENITH CONTRACTING LIMITED (Plaintiff) and FERMAR PAVING LIMITED, THE CORPORATION OF THE CITY OF BARRIE and HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO AS REPRESENTED BY THE MINISTER OF TRANSPORTATION (Defendants)

DiTomaso J.

Heard: April 29, 2016 Judgment: July 19, 2016

Docket: CV-15-495

Counsel: Michael A. Handler, for PlaintiffCharles C. Chang, for Defendant, Fermar Paving Limited


MOTION by defendant for declaration pursuant to s. 45 of Construction Lien Act that plaintiffs lien had expired.

DiTomaso J.:

The Motion

1 The defendant Fermar Paving Limited ("Fermar") brings this motion for, among other things, a declaration pursuant to s. 45 of the Construction Lien Act, R.S.O. 1990, c.C.30, as amended, (the "Construction Lien Act") that the lien of the plaintiff Toronto Zenith Contracting Limited ("Toronto Zenith") has expired.

2 This action has been discontinued against the defendants the Corporation of the City of Barrie and Her Majesty the Queen in Right of Ontario as represented by the Minister of Transportation.

Overview

3 The issues in the action relate to a construction project (the "Project") involving improvements to certain sections of Highway 400, Cundles Road East and Duckworth Street in Barrie, Ontario. Fermar was the general contractor for the Project and Toronto Zenith was Fermar's structural subcontractor.

4 Toronto Zenith entered into the subcontract agreement with Fermar dated September 18, 2013. However, this subcontract agreement was not signed by the parties on that date. Nevertheless, the subcontract agreement provided for the supply of labour, materials and equipment for interchange improvements on the highways, ramps and bridges for the Project.

5 While the work on the subcontract agreement began in 2013, the signed subcontract agreement was returned to Toronto Zenith on December 8, 2014. The subcontract agreement breaks down the subcontract price in the amount of $9,952,665 (exclusive of taxes) into unit prices.

WestlawNexfc-CANAOA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

Toronto Zenith Contracting Ltd. v. Fermar Paving Ltd., 2016 ONSC 4696, 2016...

20tiirONS^ ——— ■

6 Toronto Zenith and Fermar were involved in a dispute regarding Toronto Zenith's work, delays and payment. Toronto Zenith ultimately terminated its subcontract with Fermar by Notice of Termination dated February 6, 2015.

7 Following that termination, Toronto Zenith served a claim for lien dated March 18,2015, which Fermar received on March 20, 2015. In its claim for lien, Toronto Zenith alleges that it last supplied services and/or materials to the Project on February 6, 2015.

8 Notwithstanding the February 6, 2015 date, the parties agree that the latest date that Toronto Zenith's forces were physically on site at the Project was December 19, 2014 prior to a scheduled Winter shutdown.

9 Fermar alleges that the claim for lien is dated 90 days after the latest date of last supply.

10 After being served with Toronto Zenith's claim for lien, but prior to commencement of this action, Fermar obtained the order of Master Albert dated May 26, 2015, which "bonded off' Toronto Zenith's claim for lien upon posting a lien bond security into court. Fermar's annual cost for the applicable lien bond is $43,428.

11 This action was subsequently discontinued against the Corporation of the City of Barrie and Fler Majesty the Queen in Right of Ontario as represented by the Minister of Transportation.

Positions of the Parties

Position of the Moving Party, Fermar

12 Fermar submits that Toronto Zenith preserved its lien well beyond the 45 day limitation period prescribed by the Construction Lien Act, and as such, Toronto Zenith's lien expired before such preservation. Based on the applicable undisputed facts, Fermar submits that Toronto Zenith's lien expired as it was not preserved within the strict 45 day limitation period mandated by the Construction Lien Act. Fermar seeks a declaration that Toronto Zenith's lien has expired pursuant to subsection 45(2) of the Construction Lien Act. Further, Fermar seeks an order that the lien bond security posted by Fermar be delivered up to Fermar for cancellation pursuant to subsection 45(3) of the Construction Lien Act. Fermar also seeks payment from Toronto Zenith for the cost of the lien bond security.

Position of the Toronto Zenith

13 Toronto Zenith submits that its claim for lien is timely in that it was served within 45 days of the date of the alleged termination of the subcontract agreement and while it continued to perform its ongoing subcontract responsibilities in relation to the improvement at the Project. Toronto Zenith submits that between December 19, 2014 and February 6, 2015, Toronto Zenith was performing ongoing, preparatory work off-site in anticipation of the scheduled Spring start up for the Project in April 2015, as weather permitted.

14 Toronto Zenith submits that the scheduled Winter shutdown does not require a claim for lien to be registered within 45 days of the beginning of that Winter shutdown. In any event, the off-site work performed by Toronto Zenith during the Winter shutdown period added value to the improvement and also extended the time within which the claim for lien could be registered.

15 Toronto Zenith submits that both Fermar and Toronto Zenith anticipated at the time of2014/2015 Winter shutdown that Toronto Zenith would return to the Project in the Spring 2015 to continue its subcontract work. The intervening contentious issues lead to the alleged termination of the subcontract agreement in early February 2015.

16 Toronto Zenith submits that its claim for lien is timely in that it was served within 45 days of the alleged termination of the subcontract agreement and while it continued to perform its ongoing subcontract responsibilities in relation to the improvement at the Project.

VVestlawNexfc-CAHAOA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

-----— - —

17 Toronto Zenith, therefore, submits that its claim for lien was timely and that Fermar's motion be dismissed.

Issues

18 Fermar submits that the sole issue in this motion is whether or not Toronto Zenith's lien has expired pursuant to the Construction Lien Act. Fermar further submits that Toronto Zenith's lien has expired as same was not preserved within the strict 45 day limitation period mandated by the Construction Lien Act.

Analysis

19 With respect to this motion, in addition to the materials delivered by Fermar and Toronto Zenith, the following examinations were conducted:

a) Cross-examination of Toronto Zenith's Senior Vice-President (Tim Follwell) on Toronto Zenith's claim for lien pursuant to s. 40 of the Construction Lien Act',

b) Cross-examination of Fermar's Senior Project Manager (Charles Ezomo) on his affidavit sworn October 8,2015 and his supplementary affidavit sworn November 30, 2015;

c) Cross-examination of Toronto Zenith's Vice-President of Construction (Brian Morris) on his affidavit sworn November 6,2015; and

d) Examination of Michael Pannozzo (General Manager of Shor-Cais Consulting Ltd.) pursuant to Rule 39.03.

20 Counsel have referred me to the relevant portions of this evidence both in their factums and in their oral submissions.

Legal Principles

21 A person who supplies services or materials to an improvement for an owner, contractor or subcontractor has a lien upon the interest of the owner in the premises improved for the price of those services or materials. Where the premises is Crown land or a public street or highway owned by a municipality, the lien does not attach to the premises, but constitutes a charge under the Construction Lien Act that is effective without the registration of a claim for lien

against the premises.1

22 A subcontractor's lien arises and takes effect when the subcontractor first supplies services or materials to the improvement and expires:

a) for services or materials supplied to an improvement on or before the certified or declared date of substantial performance of the contract, 45 days following the earliest of:

(i) the date on which a copy of the certificate or declaration of the substantial performance of the contract is published, as provided in section 32, and

(ii) the date on which the person last supplies services or materials to the improvement, and

(iii) the date a subcontract is certified to be completed under section 33, where the services or materials were supplied under or in respect of that subcontract; and

b) for services or materials supplied to the improvement where there is no certification or declaration of the substantial performance of the contract, or for services or materials supplied to the improvement after the certified or declared date of substantial performance of the contract, 45 days following the earlier of:

(i) the date on which the person last supplied services or materials to the improvement, and


Vv iawNexb Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). Ail rights reserved.

___ . ■

(ii) the date a subcontract is certified to be completed under section 33, where the services or materials were2

supplied under or in respect of that subcontract.

23 The Construction Lien Act is to be strictly interpreted in respect of, among other things, whether or not a person

has a valid and subsisting hen.

24 In addition, with respect to the deadline to preserve a lien, the language of the Construction Lien Act and consistent appellate authority are clear: the requirement is "statutory... mandatory ... [and] the court has no discretion to relieve

from them".4

25 The onus is on the lien claimant to prove the proper preservation of its lien - both as to lienable supply and to

timeliness. 5

26 In order to constitute a lienable supply of services or materials, a person's work must be directly related to the

construction of the subject improvement.6

27 The following, among others, do not constitute lienable supply of services or materials and to not extend the 45- day limitation period in which a lien must be preserved:

a) repair work;

b) deficiency work;

c) off-site and/or project management work;

d) work that is not directly incorporated into the improvement; and

7e) work that is not invoiced for.

28 Where the court is satisfied that a lien has not been preserved within the prescribed time, it shall, on motion of any person, declare that the lien has expired. In addition, the court also has a general power to declare a lien expired on "any

proper ground and subject to any terms and conditions" that it considers appropriate in the circumstances.

29 When dealing with a motion to discharge an expired lien, the necessity of using the summary judgment regime

under Rule 20 of the Rules of Civil Procedure is "questionable". However, that regime is used on such motions.9

Timeliness

30 Fermar submits that Toronto Zenith's lien expired before Toronto Zenith purported to preserve it. Fermar submits that:

a) The latest that Toronto Zenith and/or any of its subtrades/supplies worked on site was December 19, 2014;

b) Neither Toronto Zenith nor any of its subtrades/supplies worked on site after December 19, 2014; and

c) Toronto Zenith only billed Fermar for work up to the December 2014 progress certificate.

31 It is agreed that the latest date that Toronto Zenith or its subcontractors actually performed work on site was December 19,2014. Toronto Zenith does not agree that December 19,2014 was the last date on which it supplied services and/or materials to the Project. This is a very important distinction when considering the issue of timeliness and also the issue of lienable work.


'Nexfc-CAHABA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

The 2014 - 2105 Winter Shutdown

32 I find the Project was weather dependant. This was the second of three scheduled Winter shutdowns. The Project's schedule contemplated three Winter shutdowns during the Project because of the duration, nature and complexity of the work which was required to be performed. As stated, the labour material and equipment was supplied for interchange improvements on Highway 400, its roadways, ramps and bridges. Toronto Zenith had already invoiced Fermar between $3,000,000 - $4,000,000 on the subcontract between the parties in the amount of almost $10,000,000. Both the evidence of Mr. Morris and Mr. Ezomo on their cross-examinations confirmed that both parties anticipated a Winter shutdown in accordance with the Project Shutdown and confirmed by Minutes from a December 5, 2014 coordination meeting involving representatives of Toronto Zenith and Fermar. Construction on the Project was not performed during Winter months and the last day on which Toronto Zenith's forces were at the Project before the scheduled Winter shutdown was December 19, 2014.

33 However, the fact that the Project was shutdown in late December, 2014 does not mean that Toronto Zenith's work, pursuant to its subcontract obligations, stopped at that time. I find the Project shutdown for the winter did not end Toronto Zenith's ongoing subcontract obligations. Further, I accept Mr. Morris' evidence that ongoing work was performed by Toronto Zenith in January and February of 2015 so that Toronto Zenith would be in a position to continue its onsite subcontract work without delay, when weather permitted.

34 Toronto Zenith asserts that Fermar's submission regarding the timeliness of Toronto Zenith's lien makes no practical or commercial sense. It would require parties to register claims for liens within 45 days of the date of their last supply of material or labour whenever a construction project was shutdown for a significant period of time (whether it by weather, stop work order, scheduling issues or coordination requirements) even though the contractor, subcontractor or material supplier knew that there was ongoing progressive work or substantial quantities of material to be supplied or delivered as required at a later date. I agree with Toronto Zenith's assertion.

35 On this issue, Master Polika in Applewood Glass & Mirror Inc. v. Baun Construction Inc.:

...For example if a subcontract called for material and/or services to be provided over a the span of a year and material and services could not be supplied for a sixty day period during the year because intervening work had to be performed by the contractor the subcontractor in my opinion would still have a claim for lien for material and services supplied before and after the sixty day period providing the claim for lien was registered within the forty-five day next following the "last supplied services or materials" pursuant to the subcontract. Each lapse of time during the currency of a subcontract in my opinion does not cause the forty-five day period to run rather it is the

last legitimate supply of services or materials under the contract that does.10

36 I agree with Master Polika's reasoning and concur that what triggers the 45 day period to run is the last legitimate supply of services or materials under the contract, (emphasis mine)

37 In the case at bar, the "last legitimate supply of services or materials under the contract" was many months or even years away.

38 Counsel for Fermar relied upon this court's decision in Blockwall Masonry Ltd. v. Arcaio Design (2007), 66 C.L.R. (3d) 155 (Ont. S.C.J.); affd 2008 CarswellOnt 1434 (Ont. S.C.J.). I find the Blockwall case is distinguishable from the present case. Again, this is not a case of "last supply". I find Toronto Zenith as a subcontractor, was not taking a hiatus or holiday from work. Rather, Toronto Zenith was carrying on work within the terms of the agreement between Toronto Zenith and Fermar. Toronto Zenith's conduct was distinguishable from the conduct of Blockwall who was found to bootstrap lien rights which had already expired and was attempting to keep expired lien rights alive. Blockwall had billed its work as 100 percent complete including an invoice for its own holdback. There was no such invoicing by Toronto Zenith in the present case. This is not a case where Toronto Zenith remained silent and did nothing in respect of further


■ NS Xt; ■CAMA.OA Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.


2016ONSC4696,20i6Caiweii6htTl566,T68 JjCWKJM)1WMC\LR. (4th)278 '

offsite work which occurred in January and February 2015. Rather, the parties were engaged in that work as disclosed by the evidence. Again, I do not find Toronto Zenith's conduct in any way consistent with an attempt to file a lien claim for the purpose of extending time for an otherwise expired lien.

39 In late January/early February 2015, a dispute arose between Toronto Zenith and Fermar because of alleged nonpayment of amounts due to Toronto Zenith by Fermar and other matters. According to Toronto Zenith, the subcontract agreement was declared to be terminated by Fermar on February 11,2015. Service (rather than registration) of the Claim for Lien upon the defendants was made within 45 days of February 11, 2015.1 agree this is earliest date upon which it could be argued that Toronto Zenith was no longer a subcontractor of Fermar.

40 For these reasons, I find that Toronto Zenith's claim for lien is timely.

41 The contract between Toronto Zenith and Fermar provided for Winter shutdowns. The dispute between Toronto Zenith and Fermar occurred at the time of the second of three contemplated Winter shutdowns. The parties anticipated that work would have proceeded in the Spring 2015 weather permitting. Approximately one-third of the subcontracted work between Toronto Zenith and Fermar was completed before the subcontract was terminated. For these reasons, I find that Toronto Zenith's lien did not expire. It conformed with s. 31(3)(b)(i) of the Construction Lien Act and that its Claim for Lien was served in a timely fashion.

Whether Toronto Zenith Supplied Lienable Work and Materials

42 Toronto Zenith's lien is also challenged on the basis that it performed alleged "work" that did not refresh Toronto Zenith's lien rights. Fermar submits that the alleged "work" was not done in the timeframe initially alleged by Toronto Zenith and was not done as part of Toronto Zenith's subcontract. Accordingly, it is submitted that the "work" that Toronto Zenith alleges to have performed after December 19, 2014 does not constitute lienable supply of services or materials.

43 Fermar submits the work as identified in the affidavit of Brian Morris sworn November 6,2015 was:

a) paragraph 9: "preparatory work ...in anticipation of early spring start-up"-as outlined above, the plaintiff terminated its subcontract with Fermar on February 6, 20 15 and never returned to the Project;

b) paragraph 10: email messages exchanged with Fermar respecting "anticipated costs for a change order" respecting work to be completed "likely toward the end of March 2015" -in accordance with established jurisprudence, this is not lienable;

c) paragraph 12: concrete forms - these forms were all installed prior to December 18, 2014 and the plaintiff never provided or poured any concrete into them;

d) paragraph 13: overhang brackets - these brackets were installed no later than December 19, 2014;

e) paragraph 14: Shor-Cais - the Declaration of Last Supply exhibited to the plaintiffs affidavit had an incorrect date of last supply, which was subsequently confirmed and corrected by Shor-Cais (the correct date of last supply was December 18, 2014);

f) paragraph 15: Watson Bowman bearing pads-the bearing pads referenced in the Morris affidavit were replacement pads for non-conforming/deficient pads previously supplied by the plaintiff and, in any event, the entirety of this supply was cancelled from the plaintiffs subcontract (including, without limitation, the Watson Bowman purchase order and all applicable invoices); and

g) paragraph 16: plaintiffs site trailer-in accordance with established jurisprudence, the cost of maintaining a site trailer is not lienable.

Me*L CANADA Copyright ©Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

44 Fermar submits that there is no genuine issue requiring a trial and that Toronto Zenith's lien has expired again in accordance with s. 31(3)(b)(i) of the Construction Lien Act.

45 To the contrary, Toronto Zenith submits that it provided lienable services or materials and relies upon provisions of the Construction Lien Act and the applicable authorities.

46 Section 14(1) of the Construction Lien Act states that:

A person who supplies services or materials to an improvement for an owner, contractor or subcontractor, has a

lien upon the interest of the owner in the premises improved for the price of those services or materials.11

47 Section 1(1) of the Construction Lien Act defines an "improvement" as:

a) Any alteration, addition or repair to the land;

b) Any construction, erection or installation on the land, including the installation of industrial, mechanical, electrical or other equipment on the land or on any building, structure or works on the land that is essential to the normal or intended use of the land, building, structure or works; or

12c) The complete or partial demolition or removal of any building, structure or works on the land.

48 Section 1(1) of the Construction Lien Act defines "materials" inter alia, as:

every kind of movable property

that becomes, or is intended to become, part of the improvement, or that is used directly in the making of the1 ^

improvement, or that is used to facilitate directly the making of the improvement. ~

Section 1(1) of the Construction Lien Act defines "supply of services", inter alia, as:

any work done or service performed upon or in respect of an improvement, and includes,

where the making of the planned improvement is not commenced, the supply of a design, plan, drawing or

specification that in itself enhances the value of the owner's interest in the land.14

49 I have already cited the provisions of s. 31(3)(b) of the Construction Lien Act.

50 In B. I. L. D. O. N. Construction (801) Inc. v. Project 801 Inc., Master Polika held that:

I find that any person, who performs any work or service, directly or indirectly, to the improvement...has a lien on

the interest of the owner in the land...15

51 In this case, Master Polika found that a project manager had a valid claim for lien.16

52 In Benny Haulage Ltd. v. Carosi Construction Ltd., the plaintiff appealed to the Divisional Court from an order discharging a lien. The Divisional Court stated that:

The Critical-Question in this case: is the phrase "in respect of' in the definition of "supply of services" [in the17Construction Lien Act\ wide enough to encompass [the Plaintiffs] "off-site" work.

53 The Divisional Court held that the trial judge erred in discharging the lien, and found that the levelling of dumped18material "off-site" fell within the scope of the Construction Lien Act.


VfextsCANADA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

Toronto Zenith Contracting Ltd. v. Fermar Paving Ltd., 2016 ONSC 4696, 2016.„

2016 ONSC 4696, 2016 CarswellOnt 11566, 268 A.C.W.S. (3d) 724,' 66 C.L.FL (4th) 278

54 In support of this conclusion, the Divisional Court relied, in part, on the Ontario Court of Appeal's decision in George Wimpey Canada Ltd. v. Peelton Hills Ltd. [1982 CarswellOnt 166 (Ont. C.A.)] In that decision, the Court of Appeal held that the phrase "or in respect of' in the definition of "supply of services" broadened the scope of the Mechanics' Lien Act (the predecessor to the Construction Lien Act) and therefore held that a blacksmith who sharpened the tools used in a mine or the architect who prepared drawings or plans for a building could claim a lien for the work

which was done, even if that work was done "off-site".19

55 The Divisional Court also relied, in part, on the decision of the British Columbia Court of Appeal in Kettle Valley Contractors Ltd. v. Cariboo Paving Ltd. [1986 CarswellBC 63 (B.C. C.A.)], which stated:

The real contest in this case, as I perceive it, is between the contention that only work done on the site is capable of sustaining a lien interest, and the contention that work done off the site may support a lien where it is part of a continuous process that physically contributes to the improvement on the site...I conclude that it is open to this court, on the authorities, to hold that it is not essential for a lien that a subcontractor's work have [sic] been done on the site, provided that the work is an integral and necessary part of the actual physical construction of the project...I see no reason in principle why the fact that the work was done on or off the site should be determinative of the right to claim a lien, provided it physically contributed in a direct and essential way to the construction of

20an improvement on the site.

56 The Divisional Court's decision in Benny Haulage, supra, was thereafter upheld by the Ontario Court of Appeal.

57 The courts have also found, inter alia, that the following "persons" may have valid liens:

22a. surveyors; and

• 7P)b. electricians who attend a site and do no progressive work, but merely unpack their equipment. '

58 I find that the evidence supports Toronto Zenith's position that it was performing offsite work which was intended to become part of the improvement at the Project, in that:

a) Pasha Pashandi, Toronto Zenith's on-site coordinator, as well as others at Toronto Zenith, were involved in submitting documentation and shop drawings during the winter shut-down period;

b) the temporary shoring system which had been installed by Toronto Zenith's subcontractor, Shor-Cais, was being used during the winter shut-down period to shore and support Highway 400 along Duckworth Avenue;

c) throughout the winter shut-down period, representatives for Toronto Zenith and Shor-Cais communicated including for the purposes of preparing shop drawings for stage two of the shoring system, which was to be constructed at the Project in 2015;

d) concrete forms which were installed by Toronto Zenith in the fall of 2014 were eventually used by Fermar after the winter shut-down period when concrete was poured at the Project.

e) rubber bearings which were manufactured by Toronto Zenith's subcontractor, Watson Bowman, were fabricated in January of 2015, and were thereafter picked up by Fermar in February of 2015. Some of the original bearings were not "deficient", as is alleged by Fermar, but merely did not conform with the Ministry of Transportation's requirements.

f) during his cross-examination, Charles Ezomo, agreed that when Toronto Zenith last worked on the site, it was expected that Toronto Zenith would return to the site in April of 2015. Ezomo also acknowledged that there was an ongoing need for Toronto Zenith to complete preparatory work during the winter shut-down.

VVestLawNext cAHAOA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 8


2016 ONSC 4696, 2016 CarswellOnt 11566, 268 A.C.W.S. (3dj 724, 66 C.L.R. (4th) 278 ~ : '

g) during the winter shut-down period, there were ongoing communications between representatives of Fermar and representatives of Toronto Zenith regarding Toronto Zenith's ongoing responsibilities at the Project; and

h) during his cross-examination, Charles Ezomo acknowledged that certain materials, which had been supplied and/ or installed by Toronto Zenith, remained on site at the Project until the summer of 2015; and

i) during his cross-examination, Charles Ezomo acknowledged that following its termination of the Agreement with Toronto Zenith, Fermar entered into a subcontract relationship with most, if not all, of Toronto Zenith's subcontractors to finish the progressive work at the Project.

59 Counsel for Fermar also cited 1442968 Ontario Ltd. v. Houston Engineering & Drafting Inc., 2008 CanLII 16187 at para. 66, for the proposition that work not invoiced does not constitute a lienable supply of services or materials. I find this decision is distinguishable because the work performed in 1442968 Ontario Limited did not add any value to the improvement. In the case at bar, I find there is uncontradicted evidence that Toronto Zenith undertook preparatory work throughout the Winter shutdown period, as required pursuant to its subcontract responsibilities which did add value to the improvement. I further reject Fermar's argument that work done by Toronto Zenith after December 19, 2014 "refreshes" its lien rights. As I have stated, this case is entirely distinguishable from Blockwall and 1442968 Ontario Limited. There is no bootstrapping or extending expired lien rights on the part of Toronto Zenith.

60 I find that Toronto Zenith has satisfied its onus to prove the proper preservation of its lien - both as to timelines and lienable supply.

Conclusion

61 For these reasons, I have found Toronto Zenith's lien has not expired pursuant to the Construction Lien Act. Further I have found that the lien is both timely and for lienable work and services provided by Toronto Zenith to Fermar within the meaning of the Construction Lien Act. Accordingly, Fermar's motion is dismissed with costs.

Costs

62 I heard submissions in respect of costs from counsel. Toronto Zenith is the successful party on this motion and it shall have its costs on a partial indemnity scale. The amount of costs claimed by Toronto Zenith is the sum of $17,564.40. Counsel for Fermar argued that counsel for Toronto Zenith's hourly rate ought to be adjusted from $380 per hour to $300 per hour which would produce a discount of $2,500. I agree. Accordingly, Fermar Paving Limited shall pay Toronto Zenith Contracting Limited its costs for this motion on a partial indemnity basis in the amount of $15,064.40 within 30 days.

Motion dismissed.

Footnotes

1 Construction Lien Act, supra, ss. J4(l) & 16(3)

2 Construction Lien Act, supra, ss.15 & 31(3)

3 Ace Lumber Ltd. v. Clarkson Co., [1963] S.C.R. 110 (S.C.C.), at p. 114; Wellington Plumbing & Heating Ltd. v. Villa Nicolini Inc., 2012 ONSC 5444 (Ont. S.C.J.), at paras. 31-4;Deslaurier Custom Cabinets Inc. v. 6383009 Canada Inc., 2012 ONSC 3350 (Ont. Master) at para. 9

4 K.H. Custom Homes Ltd. v. Smiley, 2015 ONSC 6037 (Ont. S.C.J.), at paras.3-5

5 3726843 Canada Inc. v. 879115 Ontario Ltd. [2005 CarswellOnt 1386 (Ont. S.C.J.)], 2005 CanLII 11205, at paras. 26-7

Wi I'lGXt CANADA Copyright © Thomson Reuters Canada limited or its licensors (excluding individual court documents). All rights reserved. o

Toronto Zenith Contracting Ltd. v. Fermar Paving Ltd., 2016 ONSC 4696, 2016,

2016 ONSC 4696, 2016 CarswellOnt 11566, 268 A.C.W.S. (3d) 724, 66 C.L.R. (4th) 278 —~ ; -

6 697470 Ontario Ltd. v. Presidential Developments Ltd. [1989 CarswellOnt 698 (Ont. Div. Ct.)], 1989 CanLII 4336, at p. 6; Hugomark Services Inc. v. Ontario, 2010 ONSC 7033 (Ont. S.C.J.), at para. 18

7 Vaughan-Scape Landscape Contractors Inc. v. Watermark Developments Ltd., 2010 ONSC 1365 (Ont. Master), at paras. 9-11; MHA Contracting Inc. v. Christie Mechanical Contractors Ltd. [2005 CarswellOnt 713 (Ont. S.C.J.)], 2005 CanLII 4579 at p. 11; Parma General Contractors Inc. v. Pulcini, 2014 ONSC 1948 (Ont. S.C.J.) at para. 114; 1442968 Ontario Ltd. v. Houston Engineering & Drafting Inc. [2008 CarswellOnt 2155 (Ont. S.C.J.)], 2008 CanLII 16187 at para. 67

8 Construction Lien Act, supra, ss.45 & 47

9 Dalcor Inc. v. Unimac Group Ltd., 2016 ONSC 299 (Ont. S.C.J.) at para. 30; Beaver Materials Handling Co. v. Hejna, 2005CarswellOnt 2803, [2005] O.J. No. 2733 (Ont. S.C.J.) at para. 24

10 Applewood Glass & Mirror Inc. v. Baun Construction Inc., 2009 CarswellOnt 7122, [2009] O.J. No. 4845 (Ont. Master), at para. 9

11 Section 14(1) of the Construction Lien Act, R.S.O. 1990, c.C.30

12 Section 1(1) of the Construction Lien Act, R.S.O. 1990, c.C.30

13 Ibid.

14 Ibid.

15 B.I.L.D.O.N. Construction (801) Inc. v. Project 801 Inc., 2011 ONSC 4169, 2011 CarswellOnt 6581, [2011] O.J. No. 3177 (Ont. Master), at para. 25

16 Ibid., at para. 33

17 Benny Haulage Ltd. v. Carosi Construction Ltd., 1998 CarswellOnt 3036, [1998] O.J. No. 6563 (Ont. Div. Ct.), atpara. 1 and58

18 Ibid., atpara. 79

19 Ibid., at para. 65-66

20 Ibid., at para. 69-72

21 Benny Haulage Ltd. v. Carosi Construction Ltd., 1998 CarswellOnt 2989, [1998] O.J. No. 3003 (Ont. Div. Ct.)

22 Smith & Smith Kingston Ltd. v. Kinalea Development Corp., 1994 CarswellOnt 1111, [1994] O.J. No. 2263 (Ont. Gen. Div.),at para. 3-4

23 I.B.E. W. Trust Fund, Local353 v. 779857 Ontario Inc., 2004 CarswellOnt 2528, [2004] O.J. No. 2620 (Ont. Master), at paras. 25, 37 and 47

End of Document Copyright © Thomson Reuters Canada limited or its licensors (excluding individual court documents). All rightsreserved.

7 (?>:!' Canada Copyright Thomson Reuters Canada limited or its licensors (excluding individual court documents). Ail rights reserved. 10

TAB “9”

fixes, i +6

1989 CarswellOnt 698 Ontario Divisional Court

697470 Ontario Ltd. v. Presidential Developments Ltd.

1989 CarswellOnt 698, [1989] C.L.D. 1103, [1989] O.J. No. mi, 16 A.C.W.S. (3d) 210, 34 C.L.R. 224,35 O.A.C. 294, 69 O.R. (2d) 334

697470 ONTARIO LTD. v. PRESIDENTIAL DEVELOPMENTS LTD. et al.; PRESIDENTIAL DEVELOPMENTS LTD. et al. v. 697470 ONTARIO LTD. et al.

White, Rosenberg and Weiler JJ.

Heard: June 16,1989 Judgment: June 21,1989

Counsel: Duncan W. Glaholt, for plaintiff (defendants by counterclaim).R.B. Moldaver, Q. C., for defendants (plaintiffs by counterclaim).


APPEAL of a decision to grant defendant's motion to dismiss an action brought pursuant to the Construction Lien Act.

The judgment of the Court was delivered by Rosenberg J. (orally):

1 This is an appeal by the plaintiff from the decision of the Honourable Judge Shearer dismissing the plaintiffs action. The action was commenced pursuant to the Construction Lien Act, 1983, S.O. 1983, c. 6 (the "Act"). For the purpose of the motion to dismiss, the learned motions Judge accepted the plaintiffs evidence with regard to the contract alleged by him as to the scope of the work performed. He described the work as follows:

Mr. Kirshenblatt's affidavit opposing the defendant's application stated that he performed construction management services for the defendant namely:

a) setting up a sales office

b) making the building permit application

c) negotiating with various building trades

d) assisting the defendant in dealing with local municipal officials who were processing the building permits

e) communicating with and assisting the site supervisor with respect to decision-making.

The second important document is the plaintiffs lien which shortly describes the plaintiffs services as:

supply of construction management services including inter alia, reviewing tenders, selection of trades, supervision of site superintendent and co-ordination of trades.

The third document is the transcript of the cross-examination of Mr. Kirshenblatt which disclosed further descriptions of the services performed by the plaintiff as follows:

a) he hired real estate people

697470 Ontario Ltd, v. Presidential Developments Ltd., 1989 CarswellOnt 698

1989 CarswellOnt 698, [1989] C.L.D. 1103, [1989] OJ. No.'llil7i6'KC.W.S. (3d) 210.... ' ' "

yy awHsxtv-CANADA Copyright ® Thomson Reuters Canada Limited or its licensors (excluding individual court documents). Ail rights reserved.

b) he negotiated trade contracts

c) he set up a sales office i.e. "I arranged the trades to come in and paint and lay carpet and clean it up".

A quote from his transcript starting at the answer to question 676:

Answer: I would reclassify myself not as a project superintendent.

Question 677: What would you call yourself?

Answer: A right hand, a general manager of Presidential Homes.

Question: But each of these sites have site super., didn't they?

Answer: Correct and they reported to me.

Question: Yes, but they each had qualified site supers?

Answer: Yes, they ran the day to day.

2 The appellant acknowledged that he did not do any site work in Stouffville (the property liened) and he did not superintend any of the construction at the Stouffville project. The learned trial Judge then found:

considering these descriptions by the plaintiff of the type of service he rendered in respect of the improvement, I find that such services are not directly related to the process of construction.

3 The appellant argues that there should be a trial so that witnesses could be seen by the trial Judge and their credibility assessed. In our view, the situation on the motion was similar to that on a motion for judgment on the pleadings and the learned motions Judge having assumed that the allegations of the plaintiffs were accurate for the purpose of the motion saw no need to have the action proceed to trial. In this respect we agree with that approach.

4 The second ground for the application is described by the trial Judge as follows:

While my findings on the applicant's first point is sufficient to dispose of the application, it is perhaps appropriate that I should deal with the second proposition advanced by defendant's counsel namely, that the claim for lien is premature in that the amount of the plaintiffs claim is not capable of reasonable calculation.

He then decided:

it is my view that the claim put forth by the plaintiff is too conjectural to come within that principle.

5 In view of our decision on the first ground there is no need to deal with the second ground. It was not argued strenuously by the respondent. With regard to the first issue of whether the plaintiffs claim is properly brought under the Act, s. 14 of the Act provides as follows:

14.1 A person who supplies services or materials to an improvement for an owner, contractor or subcontractor, has a lien upon the interest of the owner in the premises improved for the price of those services or materials.

[Emphasis added.]

6 Supply of services is defined in s. 1(1)25 as follows:

'supply of services' means any work done or service performed upon or in respect of an improvement, and includes,

The rest of the section is not relevant in this particular case.

697470 Ontario Ltd. v. Presidential Developments Ltd., 1989 CarswellOnt 698t98STCariiweIiOni^^ ' “ — —

'Nexti CAKAOA Copyright © Thomson Reuters Canada limited or its licensors (excluding individual court documents). All rights reserved.

7 It has been held that "the Construction Act gives certain persons rights and securities to which they would not have been entitled at common law". Accordingly, while the Act may merit a liberal interpretation with respect to the rights it confers upon those to whom it applies it must be given a strict interpretation in determining whether it does in fact apply: Clarkson Co. Ltd. v. Ace Lumber Ltd., [1963] S.C.R, 110, 4 C.B.R. (N.S.) 116, 36 D.L.R. (2) 554, rev'g [1962] O.R. 748, 33 D.L.R. (2d) 701.

8 The work performed by the appellant was not so directly related to the construction of the improvement to entitle the appellant to a lien under the Act: Beling Cement Construction Ltd. v. /. C. Contractors Ltd.; Bourdeau & Marquis Drywall & Insulation Inc. v. J.C. Contractors Ltd.; Pederson v. J.C. Contractors Ltd.; N. Pollard & Son Ltd. v. J.C. Contractors Ltd. (1980), 13 R.P.R. 306 (Ont. H.C.); Hett v. Samoth Realty Projects Ltd. (1977), 3 Alta. L.R. (2d) 97, 1 R.P.R. 257, 4 A.R. 175, 76 D.L.R. (3d) 362 (C.A.); and P.R. Codings and Assoc. Ltd. v. Jolin Holdings Ltd. [1978], 3 W.W.R. 602 (Sask. Dist. Ct.).

9 The appellant argues that the Construction Lien Act broadens the scope of the entitlement to a lien and that the cases cited above no longer apply. The former Mechanics' Lien Act, R.S.O. 1980, c. 261 provided that:

any person who performs any work or services upon or in respect of or placing or furnishes any material to be used in the making, constructing, erecting, fitting, altering to improvement or repairing of any building, etc.

was entitled to a lien. The appellant's view is expressed by Harvey J. Kirsh in his commentary in the case of Oliver v. Muer Contraction Ltd. (1985), 12 C.L.R. 1 (Ont. H.C.) as follows: (Referring to the Construction Lien Act provisions):

The generality of this provision might serve to open the door to a variety of lien claims which hitherto may not have been recognized as being legitimate. For example, quaere whether a solicitor, who has been intimately involved in all steps leading up to the registration of apian of subdivision, would have a lien for services performed 'in respect of an improvement'. Quaere whether the same solicitor would argue that he or she is entitled to a lien, where it would mean that the owner would then be obliged to comply with the holdback provisions in the Act.

10 In our view this opinion is not supportable. The former Act does refer to services upon or in respect of and in our view the definition is not broadened under the Construction Lien Act.

11 Accordingly, the decision appealed from was correct and the appeal is dismissed. The appellant also argues that by virtue of s. 57 of the Act, even if the lien fails the action in personom should proceed. Section 57 of the Act reads as follows:

57.(1) A plaintiff in an action may join with his lien claim a claim for breach of his contract or subcontract.

12 In our view, once the lien claim fails there is nothing to join with and the action must be dismissed. In Alros Products Ltd. v. Dalecore Construction Ltd. (1973), 2 O.R. (2d) 312,42 D.L.R. (3d) 656 (C.A.), Evans J.A. (as he then was) stated:

Under The Mechanics' Lien Act a claim for damages which cannot be the subject matter of a claim for lien, cannot result in a personal judgment against the defendant upon the interpretation which we place upon s. 40 of the Act.

13 This same view is applicable to the case at Bar—once the claim under the Construction Lien Act fails, the contractual claim cannot proceed.

Appeal dismissed.

697470 Ontario Ltd, v. Presidential Developments Ltd,, 1989 CarswellOnt 6981989 CarswellOnt 698, [1989] C.L.D. 1103, [1989] O.j". No. 1111, 16 A.C.WiS. (3d) 210... ” ——-


WestiawNexti-CAHABA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights resented.

TAB “10”


Selectra Inc. v. Penetanguishene (Town)

2016 CarswellOnt 5132, 2016 ONSC 2293, 265 A.C.W.S. (3d) 24, 63 C.L.R. (4th) 335

Selectra Inc., Plaintiff and The Corporation of the Town of Penetanguishene and Sona Construction Limited, Defendants

Douglas J.

Heard: March 17, 2016*

Judgment: April 4, 2016 Docket: Barrie CV-15-0904

Selectra Inc. v. Penetanguishene (Town), 2016 ONSC 2293, 2016 CarswellOnt 51322016 ONSC 2293,2016 CarswellOnt 5132,265 AC.W.S. ^3d) 24i g3 C_L-FL (4^) 335...

rouas- H h ^3

Counsel: Howard L. Shankman, for PlaintiffDerek A. Schmuck, for Defendant, Sona Construction Limited


MOTION by construction company for order reducing amount of security posted with court.

Douglas J.:

Overview

1 On this motion the Defendant Sona Construction Limited (hereinafter "Sona") seeks:

(a) An order reducing the amount of the security posted with the court;

(b) In the alternative, an order discharging the Plaintiffs claim for lien.

2 The motion arises in an action under the Construction Lien Act, RSO 1990 c. C30 as amended (hereinafter "the Act") wherein it is alleged that the Plaintiff (hereinafter "Selectra") supplied goods and services in respect of the construction of a water treatment plant in the Town of Penetanguishene pursuant to a contract with Sona.

3 The Corporation of the Town of Penetanguishene did not participate in this motion.

4 Selectra's claim for lien was registered July 23, 2015. It was vacated when Sona posted a lien bond in the amount of $1,372,552.36 (being the amount of Selectra's lien of $1,322,552.36 plus $50,000 for costs as required by the Act).

5 Sona submits that inappropriate non-lienable items were included in Selectra's claim for lien which, when accounted for and applied in reduction of the amount claimed for lien, reduces the claim to $611,811.04 which, after adding an additional discretionary twenty-five percent for costs, brings the amount for security to $764,763.80.

6 Selectra concedes the following deductions as being appropriate:

a) Site supervisor mileage allowance $17,042.20b) Site supervisor hotel $17,839.92c) Site supervisor per diem $17,806.25d) Security for Eramosa's lien (including additional 25%) $ 118,411.46e) Security for Summa's lien (including additional 25%) $130,786.81

WestiawNext-CARAMk Copyright ©; Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

Selectra Inc. v. Penetanguishene (Town), 2016 ONSC 2293, 2016 CarswellOnt 5132

2016MsC2293,2016CarswellOnt5132,265A.C.W.S.(3d)24,63C.L.R.(4th)335

f) Project management time reduction from 940 hours to 880.75 $6356.34(difference 59.25 hours $107.28) hours $107.28g) Project supervision; $35,026.92h) HST on project supervision; $4553.49i) HST on items (a),(b) and (c) $6,849.48j) Bonding $12,367.67k) Additional 25% of Summa and Ermosa liens $49,839.65Grand total deductions conceded by Selectra $416,888.14

7 Thus it is Selectra's position that the appropriate amount of security is calculated as follows:

a) Selectra lienb) Less deductions calculated abovec) Plus $50,000 costsd) Total

$1,322,552.36($416,888.19)$50,000.00$955,664.17

8 It is to be noted that my ruling in this matter should not be seen as having any impact upon the viability of the parties' positions on the issues for trial. My sole function is to determine an appropriate quantum of security, without deciding the ultimate merit of any claims.

9 For the reasons that follow I order that:

(a) The amount of security to be posted with the Court by Sona shall be reduced to $858,385.78;

(b) Upon posting the security referred to in (a) the existing security shall be delivered up to Sona.

(c) If unable to agree on costs the parties may make written submissions through my assistant at Barrie, limited to 3 pages, excluding Offers and Bills of Costs, within 30 days.

Legal Framework

10 Section 44(5) of the Act provides as follows:

Where an amount has been paid into court or security has been posted with the court under this section, the court, upon notice to such persons as it may require, may order where it is appropriate to do so,

(a) The reduction of the amount paid into court, and the payment of any part of the amount paid into court to the person entitled; or

(b) The reduction of the amount of security posted with the court, and the delivery of the security posted with the court for cancellation or substitution, as the case may be.

11 Section 1(1) of the Act defines "price" as the contract price agreed upon.

12 Pursuant to s. 14(1) of the Act:

A person who supplies services or materials to an improvement for an owner, contractor or sub-contractor, has a lien upon the interest of the owner in the premises improved for the price of those services or materials.

13 Section 15 of the Act provides as follows:

A person's lien arises and takes effect when the person first supplies services or materials to the improvement.

'Next*-CAHAO& Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

14 In Structform International Ltd. v. Ashcroft Homes Construction Inc., 2013 ONSC 4544 (Ont. S.C.J.), MasterMcLeod reduced the security relating to a claim for lien to reflect items that were either not lienable or were clearlyexaggerated. He found it inappropriate to engage in an extensive review of the merits and to determine the viability ofcontested questions of fact on a motion to reduce security. In doing so he observed:

11. ...it will however only be appropriate to reduce the security if it can convincingly be demonstrated that the maximum recovery by the lien claimant will be less than the amount it has liened for.

12. The test to be applied on a motion of this type is similar to the test on a summary judgment motion. That is the court must be satisfied on the basis of the motion materials that there is no reasonable prospect of the Plaintiff proving a lien for the amount it has claimed. Despite the analogy to summary judgment, however, it is important to note that a motion under s. 44 of the Act is not a full-fledged summary judgment motion under r. 20. Several cases establish that a motion under the security provisions of the Act is not the venue for determining complex issues of contested facts going to the merits of the claim.

14. The largest part of the Plaintiffs claim is for damages for delay and not all aspects of a delay claim may be lienable. To properly be the subject of a lien the claim must be reflective of the value of the work done on the improvement. That is it must come within the definition of "services or materials supplied to the improvement" and is limited to the "amount owing to the lien claimant in relation to the improvement". Thus additional expenses incurred because the project takes longer than anticipated such as labour costs, equipment rental and similar costs of remaining on the job will readily be found to be the basis for a valid lien. Damages at large, however, such as lost opportunity costs, loss of profits or aggravated damages will not be. Additional costs incurred offsite such as administrative overhead or lost profit and even onsite office overhead costs have been held not to be lienable. If a portion of the lien claim is attributable to damages that are not properly the subject of a lien then the security should be reduced to take that into account.

17. Both parties filed extensive motion material. The material filed by the lien claimant primarily consisted of its own internal calculations and records showing how the claim for lien was calculated. The material filed by the owner was primarily contract documentation, project communication and transcripts of cross-examination. There are numerous triable issues which will call for findings of credibility and interpretation of events and evidence. These determinations cannot made be made on a motion of this nature. The issue before me is not whether the lien claimant will succeed but only whether the security posted in court may legitimately be reduced at this point in time.

25. There are separate charges for "overtime" and for "extended duration costs". The fact that there are defences to these claims does not mean that the lien claimant should be deprived of the security of a lien. It will only be appropriate to reduce this portion of the security if the claim is simply not viable. A lien claimant acknowledges that Ashcroft never authorized overtime charges or an acceleration schedule. In fact it is acknowledged that there was never a change order request for overtime. These facts may ultimately defeat the claim but it is not possible to determine on this motion that claims for overtime are impossible. If overtime had to be paid to complete the work then that would be a cost that could form part of a lien claim.

27. The extended duration costs include some costs such as crane and forming equipment as well as outside rentals such as concrete pumps. These represent claims for equipment onsite for the extended duration of the contract and are legitimately lienable. Some element of the "delay costs" is simply a damage claim however and is not subject to lien rights. This would include the "head office overhead". Similarly there are meal allowance and fuel allowance charges which are amounts that were never the responsibility of Ashcroft under the contract. These amounts must be backed out of the claim for extended duration (delay) for lien purposes.


2QjQQf^Q22M7MWCars\^H0i?5T32r26^^ ~ : ~

’Next-CAMABA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

Selectra Inc. v. Penetanguishene (Town), 2016 ONSC 2293, 2016 CarswellOnt 5132— - - '

15 General managerial work performed, distinguished from work as a site supervisor, that is not so directly related to the construction of the improvement will not entitle the claimant to a lien under the Act (see 697470 Ontario Ltd. v. Presidential Developments Ltd., 1989 CarswellOnt 698 (Ont. Div. Ct.)).

16 In Marino v. Bay-Walsh Ltd., [2002] O.J. No. 2211 (Ont. S.C.J.), Zelinski J. observed:

110. When there has been a price agreed upon the person who has provided services or materials is (absent abandonment) entitled to a lien for that price for those services or materials. It is the price that has been agreed upon and the requirement that those services or materials be supplied "to the improvement" which defines the eligibility for and quantum of the lien claim.

111. Project managers whose responsibilities, whether onsite or off contributed "in a direct and essential way to the construction of the improvement" are persons who have supplied services "to the improvement" whether or not the services are supervisory, managerial, physical or manual.

17 In Metron Construction Inc. v. Belleville Racetrack Development Corp., [2011] O.J. No. 1129 (Ont. Master) Master Sandler observed:

72. ...the Presidential case stands for the proposition that the work performed by the lien claimant there was "not so directly related to the construction of the improvement" because the lien claimant "acknowledged that he did not do any site work on Stouffville (the property liened) and he did not superintend any of the construction at the Stouffville project". Presidential Developments had construction projects going on at a number of sites and each one had a site superintendent. The lien claimant was not acting as a project superintendent but described his work as the general manager of Presidential Homes. So whatever work he did (through his company) he did not do it at the property liened, ie. the Stouffville project. This is actually what the Presidential case decides....

74. ...in [Marino v. Bay-Walsh]...Zelinski J. comments on the Presidential and Tamma Construction cases and makes the same observation about the facts in the Presidential case that I noted above, and then distinguishes the Presidential case...he then examines the western authorities....which hold that project management and site supervision fees are eligible for a lien claim when they are incurred as "an integral and necessary part of the actual physical construction of the project". He makes his ruling, at para. Ill, that the project management services in that case were a supply of services to an improvement and were lienable in law.

75. ...a lot of what Metron did was budgets and costs preparation but this work was directly related to the project and in my view, based on the law above noted, might well be found to be lienable.

18 In 1353025 Ontario Inc. v. Walden Group Canada Ltd., [2006] O.J. No. 1681 (Ont. S.C.J.), Gordon, J. observed:

13. To grant the relief requested by the Applicant would be determinative of the action insofar as lien security is concerned, and in that respect it is analogous to a motion for summary judgment, though indeed the right to claim damages without the security of the lien would survive.

14. ...one must determine if there are triable factual issues involved. If there are genuine triable issues, that is answers are not clear and unequivocal, the issues are better dealt with at trial.

15. In the case at hand the affidavits conflict on the issue of the Respondent's entitlement to fees and presumably viva voce evidence would do the same. There have been no cross-examinations to test the trustworthiness or reliability of the allegations, nor do affidavits provide a court with visual and audio indicators thereof. There are at least factual issues that are triable.

20. On the face of it the services rendered here, even if they give rise to fee entitlement, do not result in traditional construction improvement. There are no building materials or services supplied by persons on the land with regard

WestiawNext Canada Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

Selectra Inc. v. Penetanguishene (Town), 2016 ONSC 2293, 2016 CarswellOnt 5132__________ : ~ ' ___

to the building phase financing. However, that traditional perception has been expanded somewhat in judicial precedent. It now includes on some facts architectural services, engineering drawings and services and surveying services amongst others. These have been held to be services that do not in themselves necessarily improve the land and premises but are as McLeod J. said in Smith & Smith Kingston Ltd. v. Kinalea Development Corp., [1994] O.J. No. 2263 "services provided related directly to the land to be liened and were not notional in nature". In that case the services involved surveying carried out upon the subject land.

23. The salient factor giving rise to a lien entitlement may be whether or not in the facts of each particular situation the services are for the "direct" purpose of enabling the owners to proceed with construction. Whether or not it is "direct" would in each case depend upon the facts.

24. Though on the facts of this case I tend towards a view that the type of services rendered by the Respondent should not be entitled to lien, the appropriate place for decision is at trial where the truth and reliability of the allegations can be tested for trustworthiness and a witnesses' credibility may be properly evaluated.

19 In the case of B.I.L.D. O.N. Construction (801) Inc. v. Project 801 Inc., [2011] O.J. No. 3177 (Ont. Master), Master Polika observed:

25.. ..any person who performs any work or service, directly or indirectly, to the improvement that is, in the reference before me, the construction of the condominium, has a lien on the interest of the owner in the land upon which the condominium was being built. If construction management services during the construction phase come within this definition, a question of fact, then they are lienable.

27. The delineation between which services support a claim for lien and which do not and in particular the allocation of the price therefore I find to be a genuine issue for trial.

20 In Smith & Smith Kingston Ltd. v. Kinalea Development Corp. [1994 CarswellOnt 1111 (Ont. Gen. Div.)], supra McLeod, J. was addressing the issue of whether surveying services were lienable. In concluding that they were he observed:

5. The Plaintiff in these cases performed services that were directly related to the actual construction of the improvements. Without the surveyor's work, construction could not have taken place without the surveying work done by the representatives of the Plaintiff. The survey work performed in these cases was a necessary element to the construction of the improvements on the owner's properties.

6. Whether or not a lien attaches on behalf of a surveyor depends on the particular facts and the nature of the actual work performed. The case law is clear that if the services performed relate to the actual improvement, then the lien attaches. If the nature of the work done by a surveyor is such that there is no improvement, then the lien would not attach....

7. In these cases, the services provided related directly to the lands to be leined and were not notional in nature...

21 In Stucor Construction Ltd. v. Brock University, [2001] O.J. No. 4060 (Ont. S.C.J.) Talliano J. found that charges relating to a superintendent, carpenter, labour foreman and the project manager onsite for the duration of the delay were arguably related to the supply of services and materials to the improvement as extras to the contract price. As such Talliano J. concluded those charges would support a claim for lien. I note however that the reasonableness of those charges in relation to the delay claim was not argued before Talliano J. in contrast to the circumstances before me. Talliano J. noted that damages flowing from lost profits on other jobs which a claimant was unable to undertake because of undue delay would not be lienable.

22 In Proform Construction Ltd. v. Noblestar Properties (Central) Inc., 2001 CarswellOnt 4414 (Ont. Master), in relation to a motion similar to the one before me, Master Saunders did not allow claims that were uncertain or

'Next-i canaoa Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 5

unsupported by the evidence in determination of the quantum of security to be posted. In some cases the court disallowed claims based upon estimates.

23 Costs incurred offsite such as administrative overhead and onsite office overhead costs are not lienable. Such services include, inter alia:

(a) Setting up a sales office;

(b) Making building permit applications;

(c) Negotiating with various building trades;

(d) Dealing with local municipal officials;

(e) Communicating with and assisting the site supervisor with respect to decision making;

(f) Supplying construction management services including inter alia reviewing tenders, selection of trades, supervision of site superintendent and coordination of trades;

(g) Hiring;

(h) Reviewing tender documents and calculation of bids;

(i) Review of blueprints to assess material and labour requirements;

(j) Communications with suppliers to solicit quotes and coordination of the responses;

(k) Maintenance of binders at the office containing key project information;

(l) Preparation of progress billing statements (see 697470 Ontario Ltd. v. Presidential Developments Ltd., supra).

24 General overhead expenses cannot be considered a supply of materials or services upon or in respect of an improvement as those services were "not so directly related to the construction of the improvement" to fall within the contractual chain on construction projects that are given a financial preference and a security interest by the Act. As such, general overhead expenses are not lienable (see Rudco Insulation Ltd. v. Toronto Sanitary Inc., [1998] O.J. No. 4105 (Ont. C.A.)).

25 Expenses incurred with respect to the purchase and repair of equipment that is not for the exclusive use of the subject property and merely adds to or maintains a person's equipment to be used by that person on future projects is notleinable (see George Taylor Hardware Ltd. v. Canadian Associated Gold Fields Ltd., [1929] O.J. No. 23 (Ont. C.A.)).

26 To recover for delay the contractor must proceed as follows:

(a) The cause of the delay must be isolated and defined;

(b) The delay must be analyzed to determine whether it is excusable or the responsibility of the contractor;

(c) If the delay is the contractor's responsibility the contractor must bear the cost. If it is excusable the extent of the delay must be determined;

(d) The contractor must prove that actual or constructive notice of the delay was given if required by the contract;

(e) If must be established whether the delay affected items on the critical path or whether it merely reduced or eliminated the float;

Selectra Inc, v, Penetanguishene (Town), 2016 ONSC 2293, 2016 CarswellOnt 5132

2016 ONSC 2293, 2016 CarswellOnt 5132, 265 A.C.W.S. (3d) 24, 63 C.L.R. (4th) 335 “ ' '

'Next.-Canada Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

(f) The contract must be reviewed to assess whether it provides that the contractor is entitled to a remedy of extension of time only or time and compensation; and

(g) The quantum of compensation must be determined

(see Bemar Construction (Ontario) Inc. v. Mississauga (City) [2004 CarsweilOnt 222 (Ont. S.C.J.)], 2004 CanLII 34321)

27 Expenses incurred as a result of excusable delays are not lienable. Excusable delays include:

(a) Weather

(b) Strikes

(c) Floods

(d) Acts of municipal and government authorities

(e) Acts of God or Force Majeure

(f) Delays by subcontractors and suppliers arising from unforeseen events caused beyond the control and without the fault or negligence of the contractor, subcontractor or suppliers; and

(g) Unanticipated soil conditions beyond the reasonable contemplation of either party (See Bemar Construction (Ontario) Inc., supra)

28 As a lien is limited to the amount a contractor is owed. If there is a fixed price contract, in the absence of approved change orders, the contractor cannot include in its claim for lien extra labour or materials charges for work described in the fixed price contract simply because those costs were more than usual or anticipated when the fixed price contract (or change orders) were agreed to. Some amount of risk of a cost escalation is assumed by the contractor (see Structform International Ltd. v. Ashcroft Homes Construction Inc.).

Analysis

29 Selectra has included in its claim for lien the sum of $683,266.08 in relation to its "delay claim". From that there have been some concessions by Selectra referred to in paras. 6(a),(b,)(c),(f) and (i) above, totaling $65,894.19. The remaining components of Selectra's "delay claim" remaining in dispute are as follows:

(a) Site Supervisor - 3882 hours at $107.28 = $416,460.96

(b) Project Management - 880.75 hours at $107.28 = $94,486.86

(c) Office and storage sea -containers - 22 months x 4 at $150 per month = $13,200

(d) Generator rental -12 months at $800 per month = $9,600

(e) Temporary Services — 22 months at $180 per month = $1,980

(f) Scissor Lift — 22 months at $425 per month = $9,350

(g) ESA costs for temporary services - $537.72

Grand Total = $545,615.54

30 Selectra says the purchase order from Sona was accepted by Selectra on January 17, 2012 and that the contract terms required the total project to be completed by August 13, 2015, or five hundred working days. Sona says that

Selectra Inc. v. Penetanguishene (Town), 2016 ONSC 2293, 2016 CarsweilOnt 5132

2016 ONSC 2293, 2016 Car^eiiOnF5132, 265 A.C.W.S. (3d) 24r63 C.L.R. (4th) 335 ” ' ’

'Next-CANADA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 7

commencement of the project was delayed by two years; as a result, Selectra was merely delayed in starting the project and no additional costs were incurred nor were such payable pursuant to the parties' fixed price contract.

31 Additional deductions sought by Sona are as follows:

Selectra Inc. v. Penetanguishene (Town), 2016 ONSC 2293, 2016 CarswellQnt 5132 ■

2016 ONSC 229^ 265 A.C.W.S. (3d) 24, ^ CrK'pth)'335 '

(a) Schellenberger onsite credit $107.28 - $52.55 = $54.73 per hour x 3882 hours = (site $212,461.86supervisor labour)(b) Office and storage containers $13,200(c) Bond costs $22,184.16(d) Site supervisor time $60,505.92(e) Generator notional rental costs $9,600(f) Temporary services $1,980(g) ESA permits $537.72(h) Work not done $28,613.42(i) Scissor lift notional rental $9,350(j) Project Management fifty percent reduction $50,421.60

Site Supervisor Labour

32 Selectra says the Site Superintendent was Pete Schellenberger, who, during the twenty-six month "delay" from August 31, 2013 to October 31, 2015 was required to be onsite an additional 4492.5 hours. After excluding travel time Selectra's records show Mr. Schellenberger spent a total of 3555.5 hours onsite from August 25, 2013 to July 11, 2015. The difference in the hours calculated by Selectra in its delay claim, being 3882 hours and the 3555.5 hours actually spent onsite is 326.5 hours (which Selectra says was spent in the Selectra office or in travel time). This time was charged to Sona at $107.28 per hour, which, for 326.5 hours, results in a charge to Sona of $35,026.92, an amount Selectra already concedes ought to be deducted, per para. 6(g) above.

33 Sona says it never issued a change order or otherwise extended the time for completion of the contract and that it never agreed to pay Selectra extra for delay costs. It is further alleged that Selectra was at least partially responsible for any delay. Sona further submits that the $107.28 hourly rate includes fees for services provided offsite and after the completion date that did not directly contribute to the improvement, were not supply to the improvement, are not lienable, and beyond the ambit of the parties' fixed price contract.

34 On this motion, as in Structform, it is not possible or necessary for me to determine whether Selectra's claim for lien will succeed; rather, the question is whether there is a reasonable possibility of success. On the evidence before me I find that there is a reasonable possibility of success. At this stage it is not possible to determine the cause of the delay. Mr. Schellenberger's time onsite is arguably a service rendered in improvement of the property. Therefore there will be no further reduction in this respect.

Office and Storage

35 Sona argues that the Selectra's delay claim and lien claim include the notional rental costs of a site office trailer and storage sea container. Sona submits that as Selectra owns these items they are not rented from a third party and thus there is no cost to Selectra.

36 In cross-examination Selectra's witness did not know when Selectra's office trailer or sea-container were shipped to the project site. It was also acknowledged that the claim for the office trailer and sea container was an estimate given that Selectra owns the containers and did not pay any rental charges. Further, Selectra's witness did not know whether the containers Selectra used on this particular site were the same as those shown in the invoice for another project and on which it based its delay claim amounts.

Next-CftMMW, Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

37 . Sona argues that these items are not lienable as these materials and services are general overhead expenses and thus are not directly related to the construction of the improvement and were not the responsibility of Sona as there was a fixed price contract and these services and materials were within the original scope of that contract.

38 This component of the claim for lien should be deducted. There is no actual cost of rental and the claim appears to be for lost opportunity costs given that the trailer and container, being positioned on the subject work site, were not available for rental elsewhere. These costs are not lienable (see Structform International Ltd., supra at para. 14). Further, the claim in this regard appears to be based upon an estimate. This element of uncertainty can result in a claim being disallowed upon such a motion as I have before me (see Proform).

Bond Costs

39 Selectra sent an invoice to Sona for extended bonding costs in September 2013 in the amount of $22,184.16.

40 Sona argues that bonding costs are not supplied to the project and thus do not enhance its value.

41 Selectra acknowledges that the sum of $12,367.57 should be deducted in this regard.

42 On the evidence before me it appears that the bonding costs had not been invoiced to Sona when the claim for lien was registered.

43 I also find that the bonding costs do not add value to the improvement and thus do not form a proper part of the claim for lien. Thus, the full amount of $22,184.16 shall be deducted or, a further $9,816.59 in addition to the $12,367.57 already conceded.

Site Supervisor Time

44 Sona seeks an additional deduction of $60,505.92 regarding site supervisor time. In this regard I have been given little by way of explanation as to calculation of this figure and its underpinnings beyond a reference in a written summary of Sona's position on the motion presented to me during submissions.

45 I can find no reference to this item in the evidence. Therefore there shall be no reduction in respect of this item.

Generator Notional Rental Costs

46 Sona seeks a deduction of $9,600 in respect of the generator notional rental costs included in Selectra's delay claim. Selectra advances its claim calculated as twelve months at $800 per month for a total of $9,600.

47 The generator is apparently owned by Selectra. Sona submits that the generator expense is not lienable as this is a general overhead expense and not so directly related to the construction of the improvement as to fall within the contractual chain on construction projects that is given a financial preference and a security interest by the Act and in any event, this was a fixed price contract and any expense for generator was within the original scope of that contract.

48 Selectra submits that because of the two year delay in the completion of the work, Selectra was deprived of the use of its generator that it could have used on other projects. It is has therefore claimed the fair market rental value of the generator.

49 This part of the claim should be deducted. There was no direct cost to Selectra; rather, the claim sounds more appropriately in damages at large rather than an expense incurred in improvement of the property.

Temporary Services and ESA Permits

Selectra Inc. v. Penetanguishene (Town), 2016 ONSC 2293, 2016 CarsweliOnt 513225T6"6n~SC 2^ — — — —

WestiawNext, QUiAOA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

50 Selectra claims as part of its delay claim an expense for the provision of temporary services at the worksite at the rate of $180 per month for eleven months for a total of $1,980. It also claims $537.72 paid to the Electrical Safety Authority for the permits to allow it to work on the job to extend the temporary service until the project was completed.

51 Sona argues that these costs were not material or services provided to the improvement. Sona further argues that the temporary services is a deemed rental charge the Plaintiff is claiming for equipment that it owns, none of which is lienable as these materials and services are general overhead expenses and thus are not so directly related to the construction of the improvement as to trigger a security interest under the Act. It is further argued that these expenses were not the responsibility of Sona as there was a fixed price contract and these services and materials were within the original scope of that contract.

52 In my view the permit expenses should be not be included, and these should be deducted as it is analogous to a building permit expense which was not allowed in Presidential Developments, supra as being part of administrative or onsite office overhead.

53 As to the cost of temporary services, it too should be deducted as not representing a direct contribution to the improvement of the property.

Work Not Done

54 Included in Selectra's claim for lien is the amount of $28,613.42 plus HST which was admitted by Selectra's representative in cross-examination to represent work that had not been completed as of the date of registration of the lien.

55 The sum of $21,613.42 was actually invoiced to Sona by Selectra on July 22,2015 although the sum of $28,613.42 is referred to in Selectra's affidavit in response to this motion. It is the sum of $21,613.42 that must be deducted from Selectra's claim for lien in this regard. The invoice referenced "work completed but not yet billed".

56 There was also evidence that the work was done but not yet billed. Selectra's evidence in this regard is inconsistent and therefore unreliable. I am therefore satisfied that this item ought to be deducted.

Scissor Lift Notional Rental

57 Included in Selectra's delay claim and lien amount are notional rental amounts for "Scissor Lifts". The Plaintiff owns this equipment.

58 Selectra argues that because of the two year delay in the completion of the work Selectra was deprived of the use of its generator, scissor lifts and office trailers that it could have used on other projects. For this reason Selectra has claimed as part of its delay claim the fair market rental value of these items because Selectra was deprived of the use of its office trailer and scissor lift as a result of the delay on this project, Selectra actually incurred additional expenses by having to rent these items in the marketplace for use on other projects.

59 On cross-examination Selectra's witness did not know whether the scissor lifts and office trailers that Selectra used on the job site were the same as those shown in the invoice to and for another project and upon which it based its delay claim amounts. The witness also did not know whether the scissor lift was actually onsite every day after August 23, 2013, even though a claim was made for every day. Selectra owned five or six scissor lifts but had about twenty projects on the go during the subject period and thus Selectra would have needed those scissor lifts on all projects from time to time. The scissor lift was brought to the site by Selectra in 2013 and removed from the site in May 2015 according to a response to an undertaking given by this witness.

60 Selectra claims $9,350 calculated as $425 per month for twenty-two months.


2016 ONSC 2293, 2016 CarswellOnt 5132, 265 A.C.W.S. (3d) 24, 63 C.L.R. (4th) 335 ' " ~ ' "

'Nexti-c&HASm Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

Selectra Inc. v. Penetanguishene (Town), 2016 ONSC 2293, 2016 CarswellOnt 5132__________

61 For the same reasons set out above regarding the generator, this expense will be deducted.

Project Management

62 Selectra includes in its delay claim the sum of $100,843.20 calculated as ten hours per week for ninety-four weeks at $107.28 per hour.

63 Selectra concedes in submissions that the total of 940 hours was an estimate and that the actual time is 880.75 hours, which at $107.28 per hour results in $94,486.86 for a difference of $6,356.34 compared to its original claim amount in this regard.

64 As indicated at the commencement of these reasons Selectra has conceded there should be a credit or deduction in this amount.

65 It appears this claim for project management delay expenses is for five people, three project managers and two project coordinators. The ten hours per week was an estimate. The five employees of Selectra were all paid less by Selectra than $107.28 per hour.

66 The Selectra witness at cross-examination did not know whether some of the delays caused to the job were due to poor weather.

67 Sona submits the court should consider the following additional concerns regarding this part of Selectra's delay claim:

(a) Calculation of the hours worked appears to be estimated rather than based on genuine time logs.

(b) Selectra is claiming project management and project coordination time for Ryan Herbert, but he was brought on to the job two years after it started in July 2014 because another employee left Selectra; thus, Ryan Herbert would have required time to get up to date on the details of the project which time is being claimed against Sona.

(c) Ryan Herbert charged some project management time for work he did while in the Straford office in relation to a Penetanguishene job.

(d) Ryan Herbert is senior management and he is not paid for all of his travel time, even if he does travel to a site. Selectra charged Ryan Herbert's project management and project coordination time in its delay claim at $107.28 per hour which rate was to include travel, even though Ryan Herbert was not paid for all of his travel time.

(e) Of the 880 hours attributable to this project management claim, Ryan Herbert was responsible for 365 hours of which 237.5 hours was actually on the jobsite.

(f) Of the five people relating to this expense, only two were licensed electricians.

(g) Of the five, one spent all of her time in the Selectra office and another did no physical work on the jobsite.

68 Sona argues further that the project management fees, including work completed at the Selectra head office, did not directly contribute to the improvement, and were not supplied on or in respect of an improvement and are thus not lienable. It is further argued that as this was a fixed price contract Sona was not responsible for these expenses and the services were within the original scope of the contract. It is further argued that these costs were either not incurred or were exaggerated as Selectra arrived at the figure by arbitrarily charging ten extra hours per week for a period of ninety- four weeks.

69 Sona submits that one half of this claim ought to be deducted in the amount of $50,421.60.

West la wNext-CAHABA Copyright ©Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 11

Selectra Inc. v. Penetanguishene (Town), 2016 ONSC 2293, 2016 CarsweliQnt.5132 .

70 As to whether there should be a deduction in respect of this item, I conclude there should be, in part, to reflect the uncertainty of the time estimates. Otherwise, I am satisfied that this component of the claim represents project management which contributed in a direct way to the construction of the improvement and for which there is a reasonable possibility of success at trial. I have no reason to conclude that although this project was for electrical work, only qualified electricians would supply services within the meaning of the Act, as submitted by Sona.

71 There will be a deduction of 33% of $94,486.86, or $31,180.66.

72 Therefore, the amount to be held as security shall be calculated as follows:

a) Claim for lien $1,322,552.36b) Less Selectra's concession per para. 6 above ($416,888.19)c) Less office and storage ($13,200)d) Less generator ($9,600)e) Less temporary services and ESA ($2,517.72)f) Less bonding costs ($9,816.59)g) Less work not done ($21,613.42)h) Less scissor lift . ($9,350)i) Less project management ($31,180.66)k) Plus Costs $50,000TOTAL SECURITY $858,385.78

Motion granted.

Footnotes

* Additional reasons at Selectra Inc. v. Penetanguishene (Town) (2016), 2016 CarswellOnt 8195,2016 ONSC 3436 (Ont. S.C.J.).


WestlawNexfe-CAHAD* Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved, 12

TAB “11”

Landac Developments Ltd. v. Kerry T. Howe Ltd., 1990 CarswellOnt 653__________________Pft/a. 10

1990 CarswellOnt 653Ontario Supreme Court, High Court of Justice

Landac Developments Ltd. v. Kerry T. Howe Ltd.

1990 CarswellOnt 653, [1990] C.L.D. 494, 20 A.C.W.S. (3d) 333, 72 O.R. (2d) 760

LANDAC DEVELOPMENTS LTD. v. KERRY T. HOWE LTD.

Gravely L.J.S.C.

Judgment: March 30,1990 Docket: Doc. No. 7431/89

Counsel: P. Lingard, for applicant.A. Banfield, for respondent.


APPLICATION for an order vacating respondent's registration of claim for lien.

Gravely L.J.S.C.:

1 The applicant owner, Landac, applies under s. 45(1) of the Construction Lien Act, 1983, S.O. 1983, c. 6, for an order that the registration of the respondent's claim for lien be vacated, in that it was not registered within 45 days of publication of the certificate of substantial performance of the construction contract.

2 In July 1987, Landac was developing a residential subdivision and retained the respondent as consulting engineers and planning consultants. The respondent was to do all of the engineering work and supervision of the sewer, watermain and road construction. The respondent's work has not yet been completed, although the parties are not agreed as to what remains to be done. Alfred Beam Excavating Limited was the construction contractor and on November 28,1988, the respondent published certification that the Beam contract was substantially performed. The respondent registered its claim for lien on March 8, 1989.

3 The issue is whether or not the lien is preserved by registration of a claim for lien more than 45 days after publication of the certificate of substantial completion of the Beam contract.

4 "Contract" and "contractor" are defined in s. 1(1):

3. 'contract' means the contract between the owner and the contractor, and includes any amendment to that contract;

4. 'contractor' means a person contracting with or employed directly by the owner or his agent to supply services or materials to an improvement.

5 The respondent is a "contractor". The Act distinguishes between contractors, subcontractors and other suppliers. While all may acquire the right to a lien upon first delivery of services or materials (ss. 14 and 15), expiry of lien rights is regulated somewhat differently for each class of supplier.

6 Section 31 (2) applies to a contractor. A contractor's lien expires 45 days after the certificate of substantial performance is published or "the contract" is completed, or where no certificate, within 45 days of completion or abandonment of the contract.

WestlawNexh CANADA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

Landac Developments Ltd. v. Kerry T. Howe Ltd., 1990 CarswellOnt 653

1990 CarsweliOnt 653, [1990] C.L.D. 494, 20 A.C.W.s: (3d) 333, 72 O.R: (2d) 760

7 Section 31(3) governs the expiry of the lien of "any other person", i.e., anyone other than the contractor, and refers to both subcontractors and other suppliers. It provides a scheme for expiry related to the certificate of substantial performance of the contract, the last supply of services or materials or a certificate of completion of a subcontract.

8 Section 31(4) applies to all three classes of suppliers in respect of "the contract":

Where a person has supplied services or materials to an improvement on or before the date certified or declared to be the date of the substantial performance of the contract and has also supplied, or is to supply, services or materials after the date, his lien in respect of the services or materials supplied on or before the date of substantial performance expires without affecting any hen that he may have for the supply of services or materials after that date.

9 Mr. Lingard contended that sub. 4 makes clear that preservation of lien rights is tied to the certificate of substantial completion, even if the supplier is another contractor. However, read in context with the section as a whole, sub. 4,1 think, is intended simply to preserve lien rights for materials or services supplied after the date certified to be the date of substantial performance. The actual expiry mechanisms are spelled out in subs. 2 and 3.

10 There can be more than one contractor, and when s. 31(2) refers to "the contract", it must mean the contract of that particular contractor, not a different contract of a different contractor. This must be so, it seems to me, even if the services supplied by a contractor also relate to the completion of a contract of another contractor. It follows, then, that survival of a contractor's lien is not tied to the certificate of a different contractor. Here, in my opinion, the respondent was not required to register its lien within 45 days of the publication of the certificate of substantial completion of the contract of Alfred Beam Excavating Limited.

11 The application is dismissed with costs to the respondent.Application dismissed.


sAfeti8WNext;-au»AnA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

TAB “12”

pCtf(X io -Demik Construction Ltd. v. Royal Crest Lifecare Group Inc., 1994 CarswellOnt 955__________ - : — —

1994 CarswellOnt 955 Ontario Court of Justice (General Division)

Demik Construction Ltd. v. Royal Crest Lifecare Group Inc.

1994 CarswellOnt 955, [1994] O.J. No. 2536,18 C.L.R. (2d) 114, 51 A.C.W.S. (3d) 212,5 W.D.C.P. (2d) 573

Re CONSTRUCTION LIEN ACT

DEMIK CONSTRUCTION LIMITED v. ROYAL CREST LIFECARE GROUP INC., MNC LIFECARE GROUP INC., MARTINO RESIDENTIAL CARE CENTRES LIMITED, 852935 ONTARIO INC., as Trustee,

CAMERON & JOHNSTONE LIMITED, as Trustee, MELROSE LONG TERM CARE MANAGEMENT CO. LIMITED, as Trustee, THE EQUITABLE LIFE ASSURANCE COMPANY, CONFEDERATION LIFE

INSURANCE COMPANY, ROYAL BANK OF CANADA, BANK OF MONTREAL, MONTY BEBER, as Trustee, HONG KONG BANK OF CANADA, and FUTUREMED HEALTH CARE PRODUCTS INC.

Cavarzan J.

Heard: October 5,1994 Judgment: October 26,1994

Docket: Doc. 36851/92

Counsel: Michael V. MacKay, for plaintiff.Joseph Agostino, for defendant Confederation Life Insurance Company.Ross F. Earnshaw, for defendant Equitable Life Assurance Company.


Motions pursuant to s.45 of Construction Lien Act (Ont.) seeking orders vacating registration of claim for lien.

Cavarzan J.:

1 The Equitable Life Insurance Company of Canada and The Confederation Life Insurance Company have brought parallel motions pursuant to s.45 of the Confederation Lien Act, R.S.O. 1990, c. C.30 (the C.L.A.). They seek orders declaring that the lien of the plaintiff has expired, vacating the registration of the claim for lien and the certificate of action, and dismissing the action against them.

2 These motions raise issues concerning the meaning of the phrase "the date the contract is completed," under s.31 (2)(a) (ii) of the Construction Lien Act, and of the nature of the "proof' required under s.45(l)(h) of the Construction Lien Act.

3 The relevant portions of s.45 of the Construction Lien Act (C.L.A.) provide that:

45.(1) Where a lien that attaches to the premises is not preserved...within the time allowed for doing so under section 31...the court upon,


(b) proof that the lien has not been preserved...within the time allowed; and

(c) production of,

(i) a certificate of search under the Land Titles Act, or

iriext;:CAHAOA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

(ii) a registrar's abstract under the Registry Act,

together with a certified copy of the claim for lien,

shall declare that the lien has expired and order that the registration of the claim for lien be vacated.

(Emphasis added.)

4 What is the nature of the "proof' required under s.45(l)(ft) that the lien has not been preserved within the time allowed?

5 Mr. Earnshaw for Equitable Life submitted that a motion under s.45 is analogous to a motion under r. 21.01 of the Rules of Civil Procedure for the determination, before trial, of a question of law raised by a pleading in an action. No evidence is admissible on such a motion except with leave of a judge or on consent of the parties.

6 Mr. MacKay, for Demik, takes the position that s.45(1 )(/;>) requires that proof that the lien has not been preserved within the time allowed be adduced before the court can grant the relief requested. In this case there must be proof that the contract was completed on or before March 13, 1992. Although not phrased in these terms by Mr. MacKay, it is arguable that a motion under s.45 of the Construction Lien Act is analogous to a motion for summary judgment under R. 20 of the Rules of Civil Procedure. If so, it is not sufficient for the parties to rely upon the allegations in the pleadings. They must adduce affidavit or other evidence.

Background

7 Demik Construction Limited was the general contractor on a project for the renovation of existing buildings and for the construction of an addition. Pursuant to s.31 (2)(a)(i), a copy of a certificate of substantial performance of the contract was published on March 18,1992. It identified the date of substantial performance as March 13,1992. Demik registered its claim for lien on May 1,1992. May 1 is 44 days after the 18th day of March and 49 days after the 13th day of March.

8 In the claim for lien, it is specified that the time within which services or materials were supplied was "from July 15, 1991, to March 13, 1992." The short description of services and materials supplied was as follows: "All labour and construction materials required to carry out alterations to existing building and addition to it." The contract price specified in the claim for lien is $2,475,000 (including G.S.T.), and the amount claimed as owing "in respect of services or materials that have been supplied to and including March 13, 1992" is $1,250,000.

9 Paragraphs 17 and 18 of the statement of claim state that the original contract price was $2,000,000 exclusive of G.S.T., but that various agreed changes and extras agreed upon raised that price to $2,475,000 inclusive of G.S.T. By paragraph 22, it is claimed that labour and materials valued at $2,488,014.73 inclusive of G.S.T. were supplied up to and including March 13,1992. It appears from this pleading that labour and materials in excess of the amended contract price were supplied prior to March 13,1992.

10 The moving parties have filed no affidavit material. They rely instead on the contents of the claim for lien, the affidavit of verification of the lien claim, and on the assertions made by the plaintiff in its statement of claim. Based upon this material, the moving parties take the position that the contract was completed, as contemplated under s.31(2)(a)(ii), on March 13, 1992.

11 If March 13, 1992, is indeed the date on which the contract was completed, then registration of the claim for lien on May 1, 1992, occurred 49 days later and, therefore, beyond the 45 days specified in the Construction Lien Act.

12 31.

Demik Construction Ltd. v. Royal Crest Lifecare Group Inc., 1994 CarswellOnt 955______ , -

fAxt CANADA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

Demik Construction Ltd. v. Royal Crest Lifecare Group Inc., 1994 CarswellOnt 955

1994 CarevvellOnt 955, [1994] O.J. No. 2536,18 C.L.R. (2d) 114, 51 - '

(2) Subject to subsection (4), the lien of a contractor,

(a) for services or materials supplied to an improvement on or before the date certified or declared to be the date of the substantial performance of the contract, expires at the conclusion of the forty-five-day period next following the occurrence of the earlier of,

(i) the date on which a copy of the certificate or declaration of the substantial performance of the contract is published as provided in section 32, and

(ii) the date the contract is completed or abandoned

13 Section 2 of the Construction Lien Act provides criteria for determining when a contract has been substantially performed and when it shall be deemed to be completed. Although these dates can coincide, the Construction Lien Act treats them as distinct occurrences. In the absence of evidence to the contrary, therefore, March 13,1992, cannot be said to be the date of completion of the contract.

14 Mr. Earnshaw, supported by Mr. Agostino, submitted that the contract was completed as of March 13, 1992, because "there has been such performance of the contract as would entitle the contractor to maintain an action for the whole amount due thereunder." The quoted words are from reasons by Judson J. for the Supreme Court of Canada in Lamb ton (County) v. Canadian Comstock Co. (1959), 21 D.L.R. (2d) 689 at 695 [hereinafter County of Lambton].

15 I note, however, that the County of Lambton case was based on facts determined after a trial and that it considered the wording of the older Mechanics' Lien Act. Judson J. went on to state the following:

Completion means what it says. I do not think that time begins to run under s.21(l) until it can be said that the contractor or sub-contractor has done all that he promised to do and is entitled to maintain his action for the full amount.

16 at p.695

What the county is really seeking to do is to turn the acknowledgement into an agreement that the work has been completed, regardless of the actual and known state of facts and to set this up as a waiver of lien under the Act.

17 atp. 696

18 It appears from the case report that an acknowledgement in writing had been given by the contractor to the owner's architect that all work had been completed. It was found at trial that such was not the case to the knowledge of both parties, and that it had been given in order to induce the speeding up of payment of the balance of his money.

19 Nor is the recent decision in Michelin Group Inc. v. Forsan Construction Ltd. (1994), 18 O.R. (3d) 523 (Gen. Div.) of any assistance to the moving parties. In that case Carnwath J. held [at p. 526] that:

If a lien claimant swears in an affidavit required by the Act that certain services were performed to and including a specific date, other interested parties should be able to rely on that date; to find otherwise would require the point to be litigated in every instance to establish the last date work was performed or materials delivered.

The Michelin case is distinguishable, however, in that it deals with the claim of a subcontractor under s.31(3) of the C.L.A. Section 31(3) specifies that the earliest of three possible triggering events will start the clock ticking on the 45- day period for preserving a lien. One of those is "the date on which the person last supplies services or materials to the improvement." The agent for the lien claimant swore an affidavit that the last work was performed on a specific date.

20 In the case before me the affidavit on behalf of the lien claimant does not state explicitly that the contract was completed. It simply affirms that the facts cited in the claim for lien are true. In contrast, in paragraph 19 of the statement

tia wNextf CftHAOA Copyright ® Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

of claim it is alleged that "[t]he plaintiff commenced fulfilling its obligations under the Agreement on or about July 15, 1991, and has continued steadily to date." The statement of claim was issued on June 16, 1992.

21 The motion in the Michelin case was, furthermore, a motion at trial. The court heard evidence.

22 I agree with the submission by Mr. MacKay that the completion date is a matter for determination at trial. The language of the claim for lien in the instant case does not permit an inference that March 13, 1992, is the date of completion of the contract.

23 In my opinion, a motion under s.45 of the Construction Lien Act is analogous to a motion for summary judgment. Section 45(l)(h) creates an onus or burden of proof on the moving party to demonstrate that the lien has not been preserved within the time allowed. No such proof was tendered in these matters. Even if a motion under s.45 were held to be analogous to a motion under r.21.01 to determine an issue of law before trial, it is doubtful that such a motion could succeed where, as here, there are material facts in dispute.

24 An affidavit filed on behalf of the plaintiff, the responding party in these motions, was attacked as inadequate. It was sought by that affidavit to introduce evidence in support of the assertion by the plaintiff that the contract was not completed. In view of my ruling that the moving parties have failed to provide any proof, there is no need for me to comment upon the extent to which, if at all, weight could be given to that affidavit.

Conclusion

25 The moving parties have failed to prove that the lien in question has not been preserved within the time allowed. The motions are dismissed with costs.

Motions dismissed.

Demik Construction Ltd. v, Royal Crest Lifecare Group Inc., 1994 CarswellOnt 955114> 51 A.C.W.S. (3d) 212...


riOXt CAHAUA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

TAB “13”

Paid dh


Brian T. Fletcher Construction Co. v. 1707583 Ontario Inc.


BRIAN T. FLETCHER CONSTRUCTION CO. LTD. v. 1707583 ONTARIO INC., ANDREW G. WILLIS, WILLIS HOMES LIMITED, FOREMOST FINANCIAL

CORPORATION IN TRUST, 17007584 ONTARIO INC., FOREMOST MORTGAGE HOLDING CORPORATION, NOEL NFELANDS and TERRY NEELANDS

AND RE: BRIAN T. FLETCHER CONSTRUCTION CO. LTD. v. NOEL NEELANDS, ANDREW G. WILLIS and WILLIS HOMES LIMITED

Master C. Albert

Judgment: May 20, 2009Docket: Toronto 08-CT000185, 08-CT000227, 08-CT000209,

08-CT000186, 08-CT000185, 07-CT000177, 07-CT000178

Counsel: K. MacDonald, J. Sanderson for Defendants, Willis (Moving Party)M. Abradjian for Defendant, Neelands (Moving Party)H. Mandel for Defendant, Foremost Financial (Supporting the Motion)B. Spiller for Plaintiff, Fletcher (Responding Party)

Subject: Contracts; Corporate and Commercial; Civil Practice and Procedure; Property

MOTIONS by owners, contractor, and mortgagee to discharge construction liens.

Master C. Albert1:

1 The issue is whether Brian T. Fletcher Construction Co. ("Fletcher") is entitled to a general lien under section 20■y

of the Construction Lien Act . Fletcher's claims for lien registered against premises referred to in these reasons as lots 12 and 33 include a claim for the cost of materials and services supplied to lots other than lots 12 and 33. The motions, brought by 1707583 Ontario Inc. ("1707") as registered owner of lot 12, by Noel Neelands as registered owner of lot 33,

by Willis Homes Limited ("Willis") as general contractor and by Foremost Financial' ("Foremost"), mortgagee of Lot 12, are to discharge the liens pursuant to section 47 of the Act. Such motions are treated as summary judgment motions. The test is whether there is a genuine issue for trial.

2 Three questions must be answered:

(a) Is consent to bring this motion required and if so should it be granted?

(b) Is Fletcher entitled to a general lien against lots 12 and 33?

(c) If not general liens should the liens be permitted to continue?

Background

Brian T. Fletcher Construction Co. v. 1707583 Ontario Inc., 2009 CarswellOnt 2805

2009 CarswellOnt 2805, [2009] O.J. No. 2049, 177 A.C.W.S. (3d) 820... : — '

4ext:i'CAMAI» Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). AH rights reserved.

3 Georgian Bay Estates is a 41 lot subdivision project on a private members-only golf course. Willis, the general contractor of some of the subdivision homes, subcontracted site supervision services to Fletcher.

4 The plan of subdivision was registered in March 2006. Mr. Neelands purchased vacant lot 33 on July 12, 2006 and 1707 purchased vacant lot 12 on August 25, 2006. The principal of 1707 is Mr. Willis' spouse but nothing turns on this fact.

5 The purchasers of vacant lots in the subdivision were permitted to choose their own builder. Mr. Neelands and 1707 each contracted separately with Willis to build homes on their lots. The written contract between Willis and Mr. Neelands is dated November 1,2006. Mr. Neelands contracted directly with Fletcher for construction services. Willis and 1707 entered into a verbal contract on a date not specified in the materials. Willis and Fletcher contracted for Fletcher to supply construction services to lot 12. Construction proceeded on lots 12 and 33.

6 By early 2007 several lots in the subdivision remained unsold. A group of investors formed a limited partnership called Georgian Bay Properties GP Inc. (the "Partnership") to purchase and build homes on 13 lots. On February 21, 2007 the Partnership signed a development agreement with Willis to build homes on the 13 lots, which are identified by lot number in paragraph l(n) of the development agreement as lots 1, 2, 8, 14, 15, 17, 19, 21, 22, 23, 26, 40 and 41 on Plan 16M-6, Town of Blue Mountains, County of Grey. Willis subcontracted with Fletcher to provide site supervision services. A significant fact is that neither lot 12 nor lot 33 is subject to the development agreement. Those lots were under different ownership.

7 Willis and the Partnership terminated the development agreement on November 12, 2007 and Willis contracted separately with the Partnership to continue building on lot 1. On March 25, 2008 Fletcher, as subcontractor to Willis, registered a lien for $90,780.97 against lot 1. Fletcher subsequently settled the claim for $20,000 and now looks to 1707 and Mr. Neelands, owners of lots 12 and 33, for the $70,780.97 shortfall as part of its claim against each of them. On May 5,2008 Fletcher registered a discharge of the lien against lot 1.

8 Ten days later, on May 15, 2008, Fletcher registered liens for $357,804.20 against each of lots 12 and 33. Prior to registering the liens Fletcher made no demands of 1707 or Mr. Neelands for payment.

9 Brian Fletcher admits that only $95,222.87 of the $357,804.20 claimed arises from services and materials supplied to lot 12 and only $57,031.25 of the $357,804.20 claimed arises from services and materials supplied to lot 33. By this admission Fletcher acknowledged that the liens are overstated by $262,581.33 and $300,772.95 respectively unless Fletcher was entitled to claim a general lien against lots 12 ad 33 for services and materials supplied earlier on subdivision lots owned by others.

10 In response to a request to provide an accounting of the lien claims for $357,804.20 Fletcher produced the following accounting:

(a) Lot 1: $70,780.97 remains owning (Fletcher admits accepting a settlement of $20,000 from the owner of loti to settle the $90,780.97 lien claim and discharge the lien);

(b) Lot 12: $95,222.87 remains owing. 1707 paid $131,334.12 of Fletcher's $226,556.99 invoice;

(c) Lot 33: $57,031.25 remains owing. Mr. Neelands has not paid Fletcher's invoice.

(d) $137,412.76 as the remainder owing on the $901,818.35 Fletcher invoiced in respect of lots that included lot 33 but did not include lot 12, of which Fletcher admits receiving $707,374.34.

(e) Total amount claimed as owing: $70,780.97 + $95,222.87 + $57,031.25 + $137,412.76 = $360,447.85, which is $2643.65 more than the amount of the general lien claim

Brian T, Fletcher Construction Co. v. 1707583 Ontario Inc., 2009 CarswellOnt 2805

2009 CarswellOnt 2805, [2009] OJ. No. 2049, 177A.C.W.S. (3d) 820... : "" : “

wNexLcfcHABA Copyright Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

11 The question is whether 1707 and Mr. Neelands are liable under the general lien provisions of the Act for the construction debts of owners of other lots in the subdivision.

Leave to bring this motion

12 Section 67 of the Act provides that interlocutory steps, other than those provided for in the Act, require leave of the court. The test for leave is whether the interlocutory proceeding is necessary or would expedite the resolution of the issues in dispute.

13 Fletcher argues that leave is required and neither test is met. I disagree on both counts.

14 A motion to discharge or vacate a lien upon proper grounds is specifically provided for under section 47 of the

Act. As such leave is not required (See: 1351150 Ontario Inc,, v. Chartrand4). Motions not provided for under the Act where leave is required would be motions for interlocutory relief such as security for costs or for discovery or to compel answers to questions refused at discovery. That is the type of relief not specifically provided for under the Act.

15 Alternatively, if leave is required I would grant leave in this case on the basis that the motion would expedite resolution of the issues. If successful in whole or in part the motions would reduce or eliminate the lien issues thereby significantly reducing the evidence and issues at trial and reduce the length of trial. It would also remove two grossly exaggerated liens from two titles. On that basis the test for leave is met.

Is Fletcher entitled to register a general lien?

16 Section 20 of the Act relieves a lien claimant from the 45 day period within which to preserve a lien 5 where the contractor supplies services or materials to multiple premises for the same owner under a single contract. In such cases the lien rights for all of the services and materials supplied to all of the premises do not expire until the date by which the lien rights in respect of the last of the premises to be completed expires. A subcontractor's right to claim a lien flows from the general contractor's entitlement:

20(1) Where an owner enters into a single contract for improvements on more than one premises of the owner, any person supplying services or materials under the contract, or under a subcontract under that contract, may choose to have the person's lien follow the form of the contract and be a general lien against each of those premises for the price of all services and materials the person supplied to all the premises.

17 The purpose of section 20 of the Act is to simplify the lien process for suppliers of services and materials to multilot developments by relieving them of the requirement to allocate the total supply to the individual units as they are completed. If the developer sells the houses as they are completed and the supplier continues to build houses on the remaining lots then the supplier may claim a lien against the remaining lots for the supply of services or materials on all of the lots that were subject to the agreement.

18 Three criteria are required to register a general lien:

(a) All of the premises for which the lien claimant seeks payment must be under the same ownership at the time of supply;

(b) All of the work must be performed under a single contract (see: Gillies Lumber Inc. v. Kubassek Holdings Ltd. 6 ); and

(c) There is not a provision in the contract with the owner providing that liens arise and expire on a lot-by-lot basis.

19 If Fletcher is entitled to a general lien against premises that include lots 12 and 33 then the unpaid amount for site supervision services for lots other than 12 and 33 could be claimed in the liens registered against lots 12 and 33. To

Brian T. Fietcher Construction Co. v. 1707583 Ontario Inc., 2009 CarswellOnt 2805

2009 CarswellOnt 2805, [2009] O.J. No. 2049,177 ' ! ' ‘ ”

Next-CAHABA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

establish a general lien Fletcher must prove that when he contracted to supply services there was a single contract that included lots 12 and 33 together with the other lots for which payment is claimed under the general lien provisions of the Act, and that all of the lots had a common owner. Evidence of such essential elements would raise a genuine issue for trial.

20 Fletcher argues that notwithstanding the different registered ownership of the two lots in question, the general lien provisions of the Act apply because the same general contractor (Willis) performed the work. Mr. Fletcher asserts that there was a single contract with Willis.

21 In support of its general lien Fletcher relies on Willis as being the "single owner" applying section 1 of the Act where "owner" is defined to mean any person having an interest in premises and at whose request an improvement is made. The flaw in Fletcher's argument is that registered title clearly shows separate owners for lots 1,12 and 33 at the time the verbal agreement he relies on was made. Also, Mr. Fletcher's own evidence describes more than one agreement. There is no evidence of a single contract that includes lots 12 and 33 with lot 1 or any of the other lots owned by the Partnership. Fletcher argues that as general contractor Willis has an "interest" in all of the lots as well as in the Partnership. There is no evidence of Willis having an ownership, leasehold or other interest in the Partnership lots or in lots 12 or 33.

22 Fletcher's conduct is consistent with individual liens arising and inconsistent with claims for general liens. Fletcher maintained records allocating its work to lots 12 and 33. That is not required in a general lien. In the claims for lien registered against lots 12 and 33 there is no mention of a claim for services or materials supplied to any premises other than the one against which the lien is registered. Nor do the liens registered against lots 12 and 33 identify or allege any other property that received services or any other person as owner, other than the registered owner of the lots against which the liens are registered. This is consistent with Fletcher contracting separately with the owners of lots 12 and 33 and inconsistent with a claim that Fletcher entered into a general contract for multiple lots that included lots 12 and 33.

23 The only shred of "evidence" that Willis has any ownership interest in any of the lots is Mr. Fletcher's allegation that Mr. Willis told him he had a common ownership interest and that Mr. Willis and Mr. Neelands had verbally instructed Fletcher to supervise the construction of homes on lots 12 and 33 on behalf of the Partnership. This is hearsay

at best, denied by Mr. Willis, Mr. Neelands and Mr. Dunn 9. There is no corroborating evidence to support Mr. Fletcher's allegation. Fletcher's attempt to create a triable issue of single ownership by asserting that Willis has an interest in the Partnership and consequently the 13 lots identified in the subdivision agreement fails.

24 On a motion for summary judgment where the court is faced with contradictory evidence the court should not make findings of fact or credibility. However, speculation is not fact. Fletcher's allegation that Willis has an interest as owner in all of the lots in the subdivision for which Fletcher claims payment is so completely devoid of merit that it cannot be considered fact. To consider it as such would be akin to conducting a trial over an allegation that pigs can fly based on evidence that someone told the claimant that they can.

25 Even if I were to accept that Willis is an owner for the purpose of section 20 of the Act the general lien provisions would not apply because the second essential criteria is not met: there is not a single contract for the improvements made to lots 12 and 33 with the other lots for which Fletcher claims payment under these liens. Under the development agreement there was a single contract for Willis to build homes on 13 of the lots but lots 12 and 33 were not part of that agreement. If that agreement gives rise to general lien rights then it is confined to the 13 lots to which it applies.

26 On a rule 47 motion, as on a summary judgment motion, a party is required to lead their best evidence. Accepting that Fletcher did so on the issues of ownership and single contract there is no genuine issue for trial because there is no chance of success on these two issues at trial. Fletcher fails to meet the onus of establishing that there was single ownership and a single contract. Section 20 does not apply and Fletcher was not entitled to register a general lien against lots 12 and 33.

27 For these reasons Fletcher's claim that these two lien claims are valid as general liens must fail.

Brian T. Fletcher Construction Co. v. 1707583 Ontario Inc., 2009 CarsweilOnt 2805

2009 CarswellOnt 2805, [2009] O.J. No. 2049, 177 AC.W.S'. (3d) 820...

awNexfcCNNAD* Copyright ©Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

Can the general liens be saved?

28 In Leo P. Abrams & Son Ltd. v. MacDonald Homes Inc. (Trustee of) 10 the Court of Appeal declined to treat a general lien as a lien on the lot against which it was registered for an amount reflecting the work done only on that lot. Justice Laskin explained the court's reasons:

The appellant could have liened the lots it provided services to on a lot by lot basis. It did not do so because of itsown negligence..... The majority is of the view that in the circumstances of this case we should not treat the generallien that was registered as a lien against the lot in question for the work done on that lot. The statute sets out the two bases for claiming a lien. There is no curative provision in the Act. To accept Parkway's submission on this issue would be to ignore the scheme of section 20 and would encourage the improper registration of liens.

29 Three years later the Court of Appeal considered the issue again. In Gillies Lumber Inc. v. Kubassek Holdings

Ltd..11 the lumber supplier improperly registered a general lien against each of four separate housing projects for lumber

supplied to all four housing projects. It then registered certificates of action in accordance with the Act . The issue was whether the general liens could be saved to the extent of the lesser amount attributable to each property against which each of the liens had been registered. The Court of Appeal considered section 6 of the Act which provides:

No certificate, declaration or claim for lien is invalidated by reason only of a failure to comply strictly with subsection 32(2) or (5), subsection 33(1) or subsection 34(5), unless in the opinion o f the court a person has been prejudiced thereby, and then only to the extent of the prejudice suffered.

1-3 , ,30 Writing for the majority of the Court of Appeal ~ Justice Borins found that the court cannot rewrite general liens and convert them into four specific liens. He further found that section 6 of the Act does not give the court the power to rectify or amend a defective claim for a general lien. In discussing the purpose of section 6 and the scope of its remedial powers Justice Borins considered the recommendation of the Attorney General's Advisory Committee:

The general curative provision of the Act should relieve only against minor errors or omissions in the preparation of the documents and forms under the Act.

31 Justice Borins noted that subsection 20(1) is not listed as one of the provisions to which section 6 applies because subsection 20(1) is not procedural. He opined at paragraph 41:

...s.6 is remedial and relieves against certain irregularities, but it does not relieve against the registration of a general lien where the lien claimant has not established the right to one under s.20(l).

32 Fletcher registered liens against two properties, claiming in each of the liens for services provided to those properties as well as other properties. However, unlike the lien claims in Gillies, Fletcher's liens do not state that they are general liens, nor do they refer to services provided to any property other than the one against which each of the liens is registered. Had Fletcher's lien claims been registered as general liens then the facts in the Gillies case are sufficiently similar that the Court of Appeal's decision would be binding and the liens could not be saved as specific liens.

33 The rationale given by the Court of Appeal in the Leo P. Abrams & Son Lid. case applies in both cases: to allow general liens to continue in the amounts attributable to services provided to the specific lots would be to allow lien claimants to ignore the scheme of section 20 and encourage the negligent, or even worse the deliberate, improper registration of liens.

Can the liens be permitted to continue as exaggerated lien claims?

34 The next issue is whether the two liens can be saved by treating them as exaggerated lien claims rather than as general liens.

Brian T, Fletcher Construction Co. v. 1707583 Ontario Inc., 2009 CarswellOnt 2805_________ : ■ ; ___

vNextt'CANABA Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). Ail rights reserved.

35 Fletcher invoiced $226,556.99 for lot 12 of which 1707 paid $131,334.12, leaving a maximum claim of $95,222.87

rather than the registered lien claim of $357,804.20. The lien as registered is exaggerated by at least $262,581.33.14

36 Fletcher invoiced $57,031.25 for lot 33, none of which was paid, leaving a maximum claim of $ $57,031.25 rather than the registered lien claim of $357,804.20. The lien as registered is exaggerated by at least $300,772.95.

37 The claims for lien do not describe the liens as general liens. They do not refer to services provided to other properties. Fletcher simply grossly exaggerated the amounts claimed and later admitted that most of it pertains to premises other than the one against which the liens are registered. The statements of claim do not plead a general lien. Based on these facts the liens as registered were not general lien claims but rather they were specific liens registered for grossly exaggerated amounts.

3 8 This leads to a curious conundrum. If the court were to find that the liens are general liens then following the Court of Appeal decisions they would be discharged as improper. Flowever, by including in the quantum what amounts to claims for services provided to other properties but failing or deliberately omitting any reference to general lien terminology Fletcher avoids having the liens discharged but rather changes track and has them continue as exaggerated lien claims.

39 Should Fletcher be entitled to benefit from its negligence or deliberate omission to show on the face of the liens that they were general lien claims by allowing the liens to continue as exaggerated liens under section 35 of the Act?

40 Section 35 provides:

In addition to any other ground on which the person may be liable, any person who preserves a claim for lien or who gives written notice of a lien,

(a) for an amount which the person knows or ought to know is grossly in excess of the amount which the person owed...

Is liable to any person who suffers damages as a result.

41 The question is whether section 35 provides a sufficient remedy in the present case where by Fletcher's own admission the liens against lots 12 and 33 are grossly exaggerated. The remedy is to compensate any person who suffered damages as a result of the grossly exaggerated liens.

42 Exaggerating a lien directly affects the quantum that must be posted to vacate the lien. As registered the liens could not be vacated from title unless the owner pays into court or posts security for the full amount of the liens plus costs, which would be $407,804.20 in each case. Had the liens been registered in the appropriate amount claimed for

each of the two properties then the amounts required to vacate the liens would have been $119,028.5815 for lot 12 and

$71,289.06 for lot 3316.

43 The intent of section 35 is to deter preservation of negligently or intentionally exaggerated lien claims. To merely reduce the amount required to vacate the liens to the maximum amount based on what ought to have been claimed does nothing to deter Fletcher’s negligent or intentional conduct in registering grossly exaggerated lien claims. Rather it sends a signal to the construction community that it is an acceptable tactic that the court will tolerate and the consequences are nothing more than putting the lien claimant in the position he ought to have been in had he not negligently or deliberately exaggerated the lien claim.

44 On the facts of this case if I were to treat the liens as exaggerated liens and allow them to continue in the appropriate amounts, rather than discharge them as improper general liens, it is appropriate to exercise discretion under subsection 47 of the Act and order that the liens may be vacated without posting any security, or if security has been posted it may be

Brian T. Fletcher Construction Co. v. 1707583 Ontario Inc., 2009 CarswellOnt 2805_________ ——™ — ~ - ■ —

WestiawNext -cakasa Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved. 6

returned to the party posting it. Further, the moving parties' damages for having to bring these motions would constitute damages under section 35 of the Act, justifying an award of costs of these motions on a substantial indemnity scale.

45 It would then be for the trial judge to decide whether there should be any punitive or other damages ordered paid by Fletcher to any person who gives evidence at trial of damages suffered by reason of the exaggerated lien claims.

Conclusion and Order

46 The only basis upon which to distinguish the Gillies and Leo P. Abrams & Son Lid. cases is to find that Fletcher's failure to draft the lien claims as general liens in the lien claims themselves and in the statements of claim leaves me with no choice but to treat the liens as exaggerated liens rather than as general lien claims.

47 Accordingly the claim for lien registered against lot 12 is reduced to $95,222.87. The lien claim registered against lot 33 is reduced to $57,031.25.

48 I exercise discretion and order that the claims for lien registered by Brian Fletcher Construction Co. Ltd. on May 15,2008 as instruments GY8209 and GY8208 be vacated from title and that the certificates of action registered by Brian Fletcher Construction Co. Ltd. as instruments GY9171 and GY9172 be vacated from title without the requirement to post security, pursuant to section 47 of the Construction Lien Act or, if security has been posted, that the security be returned. The liens are not discharged, leaving the remedies available under the Construction Lien Act for the trial judge to determine.

Costs

49 Justice Thompson, in referring this motion to me, asked that I fix costs of the motion. Generally costs follow the event. Counsel for Willis and for Mr. Neelands filed costs outlines. Counsel for Foremost does not seek costs. If

17counsel wish to make oral submissions on costs then a telephone conference call may be arranged through the registrar by written request to be made no later than May 22, 2009. Any settlement offer relevant to costs may be submitted in advance of the conference call by fax or email.

Schedule — "A"

Brian T. Fletcher Construction Co. v. 1707583 Ontario Inc., 2009 CarswellOnt 28052009 CarswellOnt 2805, [2009] O.J. No. 2049, 177 A.C.W.S. (3d) 820... : — __ ■ -

List of Related Actions

08-227: 08-CT000227 08-209: 08-CT000209 08-186: 08-CT000186 08-185: 08-CT000185 07-177: 07-CT000177 07-178: 07-CT000178

Rona Ontario v. T. Fletcher Construction et al.2066147 Ontario Limited v. Brian Fletcher Construction et al. Brian T. Fletcher v. Neelands et al.Brian T. Fletcher v. 1707583 Ontario et al.Cronin Contracting v. 1707583 Ontario Cronin Contracting v. Willis Homes

Order accordingly.

Footnotes

1 Construction Lien Master sitting in Toronto.

2 R.S.O. 1990, c.C.30

3 Foremost Financial Corporation, in trust and Foremost Mortgage Holding Corporation

4 1351150 Ontario Inc. v. Chartrand, 2007 CarswellOnt 6980 (Ont. S.C.J.) at paragraph 14

WesitawNexfc-CMJAOA Copyright ®; Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rights reserved.

Brian T. Fletcher Construction Co. v. 1707583 Ontario Inc., 2009 CarswellOnt 2805_____________________

5

6

7

8

9

10 11

12

13

14

15

16

17

Section 31 of the Act: 45 days from substantial completion or other specified events

Gillies Lumber Inc. v. Kubassek Holdings Ltd., [1999] O.J. No. 2692,1999 CarswellOnt 2160 (Ont. C.A.); reversing (1997), 32 O.R. (3d) 475 (Ont. Div. Ct.) on the issue of whether the defect could be cured under section 6 of the Act

I use italics because this is merely allegation, not evidence

Willis the corporation, not the individual

An officer of the Partnership

(1996), 38 C.B.R. (3d) 250 (Ont. C.A.)

Gillies Lumber Inc. v. Kubassek Holdings Ltd., [1999] O.J. No. 2692,1999 CarswellOnt 2160 (Ont. C.A.); reversing (1997), 32 O.R. (3d) 475 (Ont. Div. Ct.) on the issue of whether the defect could be cured under section 6 of the Act

Gillies, supra, per Laskin, J.A., dissenting in part, at paragraph 6, reciting the facts of the case

Justices Borins and McMurtry, CJO concurred; Justice Laskin dissenting

The figures in this and the next paragraph are taken from an accounting statement produced by Fletcher

$95,222.87 + 25%

$57,804.20 + 25%

Registrar David Backes, tel. 416-326-3272

End of .Document Copyright © Thomson Reuters Canada Limited or its licensors (excluding individual court documents). All rightsreserved.

W€::jtiewNexti CAMAOA Copyright ® Thomson Reuters Canada Limited or its licensors (excluding individual court documents). Ail rights reserved.

TAB “B”

SCHEDULE B

List of Rules and Statutes

Construction Lien Act, RSO 1990, c C.30

CLA s. 31(2)(a)

31.(1) Unless preserved under section 34. the liens arising from the supply of services or materials to an improvement expire as provided in this section. R.S.O. 1990, c. C.30, s. 31 (1).

Contractor’s liens(2) Subject to subsection (4), the lien of a contractor,

(a) for services or materials supplied to an improvement on or before the date certified or declared to be the date of the substantial performance of the contract, expires at the conclusion of the forty- five-day period next following the occurrence of the earlier of,

(i) the date on which a copy of the certificate or declaration of the substantial performance of the contract is published as provided in section 32, and

(ii) the date the contract is completed or abandoned

CLA s. 6

Minor irregularities

6. No certificate, declaration or claim for lien is invalidated by reason only of a failure to comply strictly with subsection 32 (2) or (5), subsection 33 (1) or subsection 34 (5), unless in the opinion of the court a person has been prejudiced thereby, and then only to the extent of the prejudice suffered. R.S.O. 1990, c. C.30, s. 6.

CLA s. 34(5)

Contents of claim for lien

(5) Every claim for lien shall set out,

(a) the name and address for service of the person claiming the lien and the name and address of the owner of the premises and of the person for whom the services or materials were supplied and the time within which those services or materials were supplied;

(b) a short description of the services or materials that were supplied;

9

(c) the contract price or subcontract price;

(d) the amount claimed in respect of services or materials that have been supplied; and

(e) a description of the premises,

(i) where the lien attaches to the premises, sufficient for registration under the Land Titles Act or the Registry Act, as the case may be, or

(ii) where the lien does not attach to the premises, being the address or other identification of the location of the premises. R.S.O. 1990, c. C.30, s. 34 (5); 2010, c. 16, Sched. 2, s. 2 (8).

CLA s. 45

Declaration by court that preserved lien has expired

45. (1) Where a lien that attaches to the premises is not preserved or is not perfected within the time allowed for doing so under section 31 or 36, the court upon,


(b) proof that the lien has not been preserved or perfected within the time allowed; and

(c) production of,

(1) a certificate of search under the Land Titles Act, or

(ii) a registrar's abstract under the Registry Act,

together with a certified copy of the claim for lien,

shall declare that the lien has expired and order that the registration of the claim for lien be vacated. R.S.O. 1990, c. C.30, s. 45 (1).

Idem

(2) Where the court is satisfied that a lien that does not attach to the premises has not been preserved or perfected within the time allowed for doing so under section 31 or 36, the court upon the motion of any person without notice to any other person shall declare that the lien has expired. R.S.O. 1990, c. C.30, s. 45 (2).

Order returning amount paid into court or cancelling security

(3) Where a declaration is made under subsection (1) or (2), the court shall order that,

(a) any amount that has been paid into court under section 44 in respect of that lien be returned to the person who paid the amount into court; and

(b) any security that has been posted under section 44 in respect of that lien be cancelled. R.S.O. 1990, c. C.30, s. 45 (3).

10

CLA s. 47

General power to discharge lien

47. (1) Upon motion, the court may,

(a) order the discharge of a lien;

(b) order that the registration of,

(1) a claim for lien, or

(ii) a certificate of action,

or both, be vacated;

(c) declare, where written notice of a lien has been given, that the lien has expired, or that the written notice of the lien shall no longer bind the person to whom it was given; or

(d) dismiss an action,

upon any proper ground and subject to any terms and conditions that the court considers appropriate in the circumstances. R.S.O. 1990, c. C.30, s. 47 (1).

Direction by court

(2) Where a certificate of action is vacated under subsection (1), and there remain liens which may be enforced in the action to which that certificate relates, the court shall give any directions that are necessary in the circumstances in respect of the continuation of that action subject to paragraph 4 of subsection 44 (9). R.S.O. 1990, c. C.30, s. 47 (2); 2010, c. 16, Sched. 2, s. 2 (13).

30818917.3

11

Lawyers for BD

O Canada Lim

ited, in its capacity as the court appointed R

eceiver of Astoria O

rganic M

atters Ltd. and Astoria O

rganic Matters C

anada LP

T! —1 m o —1 -a 00 CD CD >03 CD_ o o oo c 0)X 3

0).ca.

S3

_i.CD

1 ♦ CD

Oo70 a O

-N o3CD O 0)

*<_^00

“♦iCD' CD 8°

03 03 CDu

<73

o3

cnH* —\oo Q.

T3in0)

CDm

bo0303

oo0303

IT0)CD

a>■osr

ft'0)o’

CDCDI1

CDOX

03OCD

DQ_CO

DrC/3

Ol cn §>0)CD -vl

OlO

r- \ o Q) 4a. o’ i”cn o —

CL 1f—■

cnC-

i fo TJ

0)c0

01

coO

to —ICD

to

(/>H>Hmsm

>zoDOtom

>c—i i O 73

mw

73 O

CD Om m C mm<mO

gzQOO

d m > z 2o O m o>

ssio

p Tl

OS 3 CD Co05 3 CO a§ 53 oCD =}:

a scd r—^CD'3

OSO03O

COCO<3

toCt)m70O73ooc73Ho

o2S)

cwHOm

ooc3-T]CDzo

O<■^iioDO■t*N>OO

KEN TULLO

CH C

ON

STR

UC

TION LTD

. and

1684567 ON

TARIO IN

C., et al.

Plaintiff

Defendants

Documents

IN THE MATTER OF - BDO Canada€¦ · Fletcher Construction Co. v. 1707583 Ontario Inc., 2009 CarswellOnt 2805 (Ont. S.C.J.) ['Fletcher1'] at para. 26., Schedule A, Tab 13 21 Lido