Construction Law

The court considered whether a construction lien action was properly set down for trial within the two-year period required by section 37(1) of the Construction Act, despite the use of the wrong court file number and style of cause in the trial record.

The defendant, MP Lundy Construction Inc., sought a declaration that the lien had expired and the return of security.

The plaintiff, KE Electrical Ltd., cross-moved to amend the court file number nunc pro tunc.

The court found the error to be an irregularity curable under Rule 2.01 of the Rules of Civil Procedure, relying on the Court of Appeal’s reasoning in Foran.

The defendant’s motion was dismissed and the plaintiff’s cross-motion was granted.

The court determined the priority dispute between KingSett Mortgage Corporation's 2022 mortgage and various construction liens against the Debtors' property, which was in receivership.

The Receiver brought the motion to clarify "Priority Payables" under a court-approved sale agreement.

The court found that the 2022 KingSett Mortgage had priority over the construction liens, except to the extent of any deficiency in the statutory holdbacks, applying sections 78(2) and 78(6) of the Construction Act.

The court rejected the lien claimants' arguments that the mortgage did not qualify for priority under these sections and that the Receiver acted inappropriately.

This judgment addresses two lien actions arising from bridge rehabilitation work.

The plaintiffs, JCL Concrete Pumping Limited and Ontario Trucking and Disposal Ltd., claimed breach of contract or, alternatively, quantum meruit and unjust enrichment against SEMA Railway Structures Inc. for materials and equipment supplied.

The central issue was whether a contract was formed between SEMA and the plaintiffs, or with "JCL Group Inc." The court found no contract between SEMA and the plaintiffs, concluding that SEMA reasonably believed it was contracting with JCL Group Inc. As the plaintiffs had unequivocally withdrawn their alternative claims in quantum meruit and unjust enrichment prior to trial, the court dismissed their actions and discharged their liens.

SEMA's set-off claim was also dismissed as it was contingent on a contract being found.

The plaintiff, a construction company, sued the defendant for unpaid services and materials related to a renovation project.

The defendant counterclaimed for breach of contract, poor workmanship, and lost rental income.

The court found no binding fixed-price contract, determining it was a time and materials project.

While the plaintiff's hourly rate was deemed reasonable, the claimed hours were reduced due to discrepancies.

The defendant's counterclaim for deficiencies was partially successful for poor workmanship in the bathrooms, but claims related to electrical panel, hot water tank, furnace, and lost rental income were dismissed due to the defendant's instructions for cost-cutting or her own responsibilities.

The plaintiff was awarded a net amount after set-off for the successful portion of the counterclaim.

This endorsement addresses two motions: one by Kamali Design Home Builder Inc. ("Kamali") to declare UCY Construction & Project Management Inc.'s ("UCY") construction lien expired under sections 37 and 46 of the Construction Act, and a cross-motion by UCY to validate service of its statement of claim and extend the time for service.

The court granted Kamali's motion, declaring the UCY lien expired and dismissing the lien action, as UCY conceded the action had not been set down for trial within the statutory period.

UCY's motion to validate service was partially granted, validating service on the owner and Kamali, but not on the mortgagees, despite UCY's failure to explain the delay in service, due to actual notice and lack of prejudice.

Costs were awarded to Kamali for their successful motion, while no costs were ordered for UCY's service validation motion.

This costs endorsement followed a summary judgment motion where portable school classrooms were found to be "improvements" under the Construction Act.

OnPoint Group Ltd., the successful party on the main issue, sought full indemnity costs, while intervening parties also sought partial indemnity costs.

The court awarded OnPoint Group Ltd. $35,000 and the intervenors $9,500, both on a partial indemnity basis.

The decision considered factors such as mixed success, complexity, and the novelty of the issue, and addressed the impact of bilingual proceedings on costs.

The plaintiff, Bay-Yorkville Developments Ltd. (BYDL), brought a motion to consolidate its action against Ferguson-Neudorf Glass Inc. (FNG) with a pre-existing main action involving Toronto Standard Condominium Corporation No. 2282.

FNG opposed the consolidation and sought to schedule a summary judgment motion on limitations grounds.

The court granted the consolidation, finding that the actions shared common questions of law and fact, arose from the same transactions, and that consolidation would avoid multiplicity of proceedings and promote efficiency.

The court further ruled that FNG's summary judgment motion should be heard only after discoveries were completed, emphasizing the need for a comprehensive record in complex construction litigation.

The lien claimant moved for default judgment in a lien action that included claims for breach of contract and breach of trust.

The motion was dismissed due to three primary reasons: improper joinder of the trust claim with the lien claim as per O. Reg. 302/18, section 3(2) of the Construction Act; lack of jurisdiction for an Associate Justice to declare the validity of a lien claim on a motion for default judgment without a judgment of reference; and insufficient evidence to support a personal judgment for breach of contract, as the statement of claim lacked particularity and the supporting affidavit lacked corroboration.

The dismissal was without prejudice, allowing the motion to be brought back with further evidence or before a judge.

The applicants, GFL Infrastructure Group Inc. and Ashland Construction Group Ltd., sought declarations that their insurer, Temple Insurance Company and Aviva Insurance Company of Canada, had a duty to defend them under a Specific Project Wrap-Up Liability Insurance Policy.

The underlying actions involved claims for property damage due to alleged construction defects in a condominium project.

The court granted the applications, finding that the pleadings, including extensive incorporated expert reports, revealed a "mere possibility" that the claims fell within the policy's coverage, thus triggering the duty to defend despite the insurer's arguments regarding faulty workmanship exclusions.

The plaintiff, Diamond Drywall Contracting Inc., brought a motion to extend the time for serving its statement of claim, which was opposed by the defendants who also sought a declaration that the lien had expired and the action be dismissed due to non-service.

The court granted the plaintiff's motion, finding the explanation for the nine-month delay "borderline" but acceptable, particularly given the COVID-19 pandemic and the absence of actual prejudice to the defendants.

The defendants' motion was dismissed.

Despite losing on the substantive motions, the defendants were awarded $5,000 in partial indemnity costs, as the litigation was necessitated by the plaintiff's initial failure to serve the statement of claim within the statutory period.

The plaintiff corporation, 6734111 Canada Inc. c.o.b. as Home Life Builders, brought a motion seeking leave for its director, Rakesh Mohan, a non-lawyer, to personally represent it in a construction lien matter.

The court dismissed the motion, finding that while Mr. Mohan had the authority to bind the corporation, he failed to demonstrate competence to fulfill the duties of a litigant under the Rules of Civil Procedure, citing a history of non-compliance with court orders and inadequate motion materials.

The court also determined that granting leave would be unfair to the defendants given the complexity of the case and the plaintiff's alleged financial difficulties.

The Bondfield Group, a major construction company, sought CCAA protection due to insolvency, over $1 billion in active contracts, and over 200 lawsuits.

The application was unopposed and resulted from extensive stakeholder negotiations.

The court granted an initial order for CCAA protection, including a stay of proceedings, approval of a tailored $8 million Debtor-in-Possession (DIP) facility funded by Zurich Insurance, an Administration Charge for professional fees, and a Directors' Charge for $3 million (excluding John Aquino).

The court emphasized the public interest in completing critical infrastructure projects and the preference for CCAA over receivership to preserve enterprise value.

A priority dispute arose between Royal Bank of Canada (RBC), a secured creditor of bankrupt contractor A-1 Asphalt Maintenance Ltd., Guarantee Company of North America (GCNA), a bond company and secured creditor, and certain employees represented by unions.

The central issue was whether funds paid to the receiver by owners, which constituted "trust funds" under section 8 of the Construction Lien Act (CLA), were excluded from the bankrupt's estate available to creditors pursuant to section 67(1)(a) of the Bankruptcy and Insolvency Act (BIA).

The motion judge found the funds were not excluded and were available for distribution.

The Court of Appeal allowed the appeal, holding that provincially created statutory trusts satisfying general principles of trust law are preserved from distribution to ordinary creditors under the BIA.

The plaintiff, Concord Plumbing & Heating Ltd., brought a partial summary judgment motion against the defendant Northern Structures Ltd. for $114,959.01 in unpaid invoices for mechanical work on a Canadian Tire store construction project.

The motion was brought within a larger construction lien action.

The court first granted leave to bring the motion, finding it would expedite resolution if successful.

However, the court ultimately dismissed the partial summary judgment motion, citing the risk of duplicative proceedings and inconsistent findings due to intertwined issues with Canadian Tire's deficiency claims against Northern and Concord, and the complexity of determining deficiency claims on the record presented.

The plaintiff brought a summary judgment motion seeking payment for unpaid construction equipment rentals and a declaration of breach of trust under the Construction Act.

The court found both corporate defendants liable for breach of contract and breach of trust, concluding they acted in concert to avoid liability.

One individual director, Aaron Goodman, was found jointly and severally liable for breach of trust due to his knowledge and acquiescence.

The action against the other two individual directors was dismissed due to insufficient evidence of their involvement.

The Plaintiff, Fourteen Estates Limited, brought a motion to have two separate actions (a contract dispute/lien action and a libel action) share common processes and proceed on a common timetable.

The Defendant, Mandy Marie Jensen, opposed the motion, arguing it would complicate and delay the lien action and increase costs due to separate counsel.

The court, applying Rule 6.01 of the Rules of Civil Procedure, found significant factual overlap concerning the quality of construction work in both actions.

The court determined that sharing common processes would lead to efficiency and substantial cost savings for all parties, outweighing the defendant's concerns.

The motion was granted, and the parties were ordered to prepare a revised common timetable.

This case conference addressed multiple motions in ongoing construction lien actions.

The plaintiff sought orders for substituted service of a Summons to Witness and a remedy for the defendant's failure to deliver will-say statements.

The defendant sought production of evidence for a personal costs claim against its counsel and a determination on the preclusive effect of a prior order on costs.

The court addressed the requirements for will-say statements, clarified the scope of a previous preclusion order, and deemed the personal costs claim premature, to be addressed by the trial judge.

The plaintiff builder sued the defendants for unpaid amounts related to the construction of their home, including authorized changes and extras.

The defendants disputed the costs, alleged deficiencies, and argued the contract was illegal due to the builder's non-registration with Tarion.

The court found the plaintiff proved its claim for the changes and extras, concluding that the defendants received a good deal.

The court rejected the argument that the contract was void due to Tarion non-registration, noting the parties' equal sophistication and deliberate choice to proceed outside the legislation, and affirmed that the claim would succeed on a quantum meruit basis regardless.

Judgment was granted for the plaintiff for a principal amount of $70,065.82, plus prejudgment and post-judgment interest at the Courts of Justice Act rate, denying the plaintiff's claimed 2% per month interest.

This trial involved two consolidated actions: a construction lien claim by S & L Mechanical for unpaid invoices and a breach of trust claim against Robert Dompierre, the former president of Lexus Mechanical Inc. The court found that S & L's construction lien was not registered in a timely manner and had expired.

The breach of trust claim against Dompierre was also dismissed as it was commenced outside the two-year limitation period, as the plaintiff knew or ought to have known of the loss much earlier.

However, the court determined the amounts owing to S & L from Lexus Mechanical Inc. (which was bankrupt but continued by order) and allowed certain set-offs claimed by Lexus for incomplete work by S & L. Ultimately, S & L was awarded a net judgment against Lexus Mechanical Inc.

This addendum clarifies and amends a previous summary judgment ruling.

The court addressed five requests for amendment, largely granting those related to the scope of claims not pursued on summary judgment, legal costs for vacating a Certificate of Pending Litigation (CPL), and utility/maintenance costs for model homes.

The court affirmed its power to amend a ruling before it is finalized and rejected attempts to re-litigate factual findings.