Construction Law

The defendants (other than Johnson Controls) brought a motion to stay the action based on alleged failure by the plaintiff and Johnson Controls to immediately disclose a settlement agreement (the Pro Rata Agreement) that they claimed changed the litigation landscape.

The court dismissed the motion, finding that timely disclosure was made in the context of this particular case and that the agreement did not change the litigation landscape because the action had been effectively stayed and the dispute was being pursued in arbitration.

The court also addressed the application of new Rule 49.14 regarding partial settlement disclosure and fashioned appropriate remedies.

This is an appeal of a construction lien action decision rendered by Associate Justice Wiebe following a summary trial.

The defendants appealed the judgment and costs decision on five grounds: improper admission of reply evidence in breach of the rule in Browne v. Dunn; erroneous factual findings regarding door frames and drywall/soundproofing; incorrect calculation of the quantum meruit claim; and an excessive costs award.

The appellate judge dismissed all grounds of appeal, finding no error in principle or palpable and overriding errors in the trial judge's findings.

The court upheld the quantum meruit award of $56,554.67 and the costs award of $85,000 at trial, and awarded costs to the successful respondent on appeal.

This costs decision follows a motion by Capitalplus Development Group Ltd. to discharge a claim for lien registered by 2698368 Ontario Inc. The court found that 269 did not have a lien and ordered the return of security posted by Capitalplus, but dismissed the remainder of the motion.

On costs, the court awarded Capitalplus $25,000 in substantial indemnity costs, to be paid jointly and severally by 269 and its principal, Yang Yu, within thirty days.

The court found Ms. Yang’s conduct in registering the lien to be reprehensible and determined that the corporate veil should be pierced to impose personal liability.

The court discounted the costs award due to Capitalplus’s partial lack of success on the motion.

The court considered whether the plaintiff’s construction lien, not set down for trial within two years as required by the Construction Lien Act, could be enforced in another lien action relating to a different portion of the same wind energy project.

The court held that because the plaintiff’s lien and the other lien (Corbiere) were registered against different lands, they did not relate to the same “premises” under the Act.

As a result, the plaintiff’s lien expired and was ordered discharged.

The Kriesers appealed a trial judgment that dismissed their claims for construction deficiencies and breach of fiduciary duty, and granted judgment to the respondents for outstanding invoices.

The Court of Appeal dismissed the appeal, finding no error in the trial judge's determination that the Kriesers breached the contract by withholding payments, which disentitled them to warranty claims, and that there was insufficient evidence for the remaining deficiency claims.

The court also upheld the finding that no fiduciary relationship existed between the parties, and affirmed the trial judge's cost award.

The appellant, Canada Forgings Inc., appealed the dismissal of its procurement law claim against Atomic Energy of Canada Limited (AECL).

The trial judge had found the claim statute-barred by the two-year limitation period and rejected the procurement law arguments, concluding no "Contract A" was formed.

The trial judge also ruled a Deloitte Report inadmissible.

The Court of Appeal upheld the trial judge's decision, finding the reasons sufficient, the limitations analysis correct, the procurement law findings sound (no duty of fairness without Contract A), and the Deloitte Report properly excluded due to prior rulings and privilege.

The appeal was dismissed, and the costs award from the trial was upheld.

The moving party, Seabrook Bros.

Mechanical Ltd., applied under s. 50.1(4) of the Bankruptcy and Insolvency Act to revise the Proposal Trustee's $0 valuation of its construction lien security against North House Foods Ltd.'s leasehold interest.

The court dismissed the application, finding that Seabrook failed to demonstrate that the security had any realizable value on a forced sale, despite expert reports suggesting value to the debtor.

The court emphasized that the valuation was not about the debt itself, but the enforceability and net recovery from the collateral, considering impediments like lease assignment restrictions and the theoretical nature of realizing on such security in a proposal context.

This is a costs ruling following a successful trial where Benoit Construction Inc. (Benoit) obtained a judgment of $144,950.97 against Hard at Work Inc. (HAW) for breach of contract, and HAW's counterclaim was dismissed.

Benoit sought costs on a complete, substantial, or partial indemnity basis.

The court considered the factors under the Courts of Justice Act and Rules of Civil Procedure, including Benoit's offer to settle and HAW's conduct, which involved acts of bad faith and unfair dealing.

While the conduct was close to warranting complete indemnity, the court ultimately awarded Benoit costs on a substantial indemnity basis for the entire proceeding, adjusted for proportionality and reasonableness, totaling $120,852.01.

The plaintiff, Finn Way General Contractors Inc., brought a motion seeking leave to admit a late-served expert report concerning construction delays and costs.

The defendant, Lakehead University, opposed the motion, arguing the report was served late and that expert opinion evidence was unnecessary.

The court found a reasonable explanation for the late service and no prejudice to the defendant.

However, the court ultimately dismissed the motion, ruling that the expert report was not necessary to assist the trier of fact, as its observations were conclusions lacking discernible analysis and usurped the role of the trial judge.

This appeal arose from a decision granting partial summary judgment in a construction lien dispute.

The appellants (Larson Properties Partnership Group and Kevin Gary Larson) challenged the motion judge's finding of no genuine issue requiring a trial and the appropriateness of partial summary judgment.

The Court of Appeal upheld the motion judge's decision, finding no error in the determination that a genuine issue did not exist and that the partial summary judgment was appropriate given subsequent resolutions of other aspects of the litigation.

The appeal was dismissed.

The appellants (homeowners) appealed a trial decision that found them liable for breach of an oral renovation contract and dismissed their claims against the builder and the City of Hamilton.

The Court of Appeal dismissed the appeal, upholding the trial judge's findings regarding the oral contract, the standard of construction, the interpretation of allowances, the homeowners' breach of contract, and the builder's compliance.

The appellate court deferred to the trial judge's credibility findings, particularly concerning expert evidence, and his assessment of damages, finding no palpable and overriding error.

The appellant, a mortgagee, appealed a motion judge's decision that granted priority to construction lien claimants over his registered third mortgage.

The Court of Appeal dismissed the appeal, affirming that the advances made by the mortgagee did not fall within the exceptions of s. 78(2) or s. 78(6) of the Construction Act.

The court held that advances must be "made in respect of" the mortgage and the intention to secure financing must operate prospectively to gain priority over liens.

The decision reinforces the general principle of priority for lien claimants and the onus on mortgagees to clearly fall within statutory exceptions.

The plaintiff, Jetstream Environmental Solutions, sued the defendants, Normerica Realty Corporation and Normerica Inc., for breach of contract and unjust enrichment related to emergency waste removal services after a roof collapse at Normerica's plant.

The court found a clear and unambiguous contract existed between the parties, based on their prior working relationship and Normerica's directive to "do whatever it takes" to resolve the emergency.

The court found Normerica liable for breach of contract, rejecting their retrospective complaints about the work and billing process as disingenuous.

Judgment was granted in favour of Jetstream for the full outstanding amount plus interest, and the construction lien was declared properly placed.

Atlant Services, a third party, moved for partial summary judgment against Timberlea Construction and Roofing Ltd., arguing it was an employee of Timberlea or, alternatively, that the third-party claim was statute-barred.

The court found significant material facts in dispute regarding the employment relationship and vicarious liability, making it impossible to reach a fair and just determination without a full trial and viva voce evidence.

The court also dismissed the limitation period argument, finding the third-party claim was commenced within the statutory period.

The motion for partial summary judgment was dismissed.

The defendants, Man-Shield (NWO) Construction Inc. and Manshield (NWO) Construction, Inc., brought an application to stay multiple construction lien actions in favour of arbitration.

The subcontractors and owners opposed the stay.

The court dismissed the application, finding that Man-Shield had unduly delayed in seeking the stay, as measured from the date the statements of claim were issued.

The court also found Man-Shield estopped by its conduct and that granting a stay would create more uncertainty and delay, rather than facilitate resolution.

Otomic Contractors Ltd. (Otomic), an excavating contractor, sued Royal 7 Developments Ltd. (Royal 7), a property owner and developer, for $217,945.74 in unpaid excavation work on a multi-phased condominium project and sought a construction lien.

Royal 7 counterclaimed for $273,700.31, alleging Otomic failed to complete work and overcharged for volumes, forcing Royal 7 to hire a related company, Toocor Ltd., to finish.

The court found that Otomic's truck count method for billing was reasonable and accepted, and that Royal 7's payments had become slow and holdbacks unpaid, leading to the breakdown.

The court dismissed Royal 7's counterclaim, finding no overcharge and that Otomic was not responsible for Toocor's costs due to the non-arm's length relationship and Royal 7's failure to formally terminate or request Otomic's return.

The court granted Otomic's claim for $217,945.74 and declared its construction lien valid.

The defendant brought a motion for summary judgment to dismiss a construction lien action and discharge the lien, arguing no contract existed with the plaintiff corporation.

Alternatively, she sought an order for the plaintiff to post security for costs due to its alleged impecuniosity.

The court dismissed the summary judgment motion, finding a genuine issue for trial regarding the existence of a contract between the plaintiff corporation and the defendant, and declined to void the contract despite the plaintiff's breach of the Business Names Act.

The motion for security for costs was also dismissed, as the plaintiff established impecuniosity and had a legitimate claim, balancing the defendant's right to costs with the plaintiff's access to justice.

The defendants brought a motion under Rule 21.01(1)(a) and Rule 20 to dismiss the plaintiff's action.

The action claimed against the defendants under the trust provisions of the Construction Lien Act for interest and costs, and was also challenged on the basis of a limitation period.

The court dismissed the motion, finding that the legal question of whether interest and costs are covered by the CLA trust was unsettled and required a full factual record at trial.

Similarly, on the limitations issue, the court determined there was a genuine issue requiring trial, particularly concerning the "appropriate means" element of discoverability under the Limitations Act, 2002.

The general contractor, Brookfield, sought leave under section 67 of the Construction Lien Act to bring a motion for partial summary judgment.

The motion aimed to strike the delay portion of the subcontractor Limen JV's lien claim, alleging failure to provide proper notice of delay as required by contract.

Limen JV opposed, arguing that complex factual and credibility issues necessitated a full trial and that a partial summary judgment motion would cause delay.

The Master granted leave, finding that the proposed motion would likely expedite the resolution of the dispute by narrowing the issues for trial, particularly regarding the notice of delay claim, and was consistent with the Hryniuk objectives for summary judgment.

The owner, 2247129 Ontario Inc., brought a motion to declare the construction lien of Clarkway Construction Ltd. expired.

The central issue was whether a subcontractor's lien rights could extend beyond the date the general contractor's contract with the owner ended by abandonment or termination.

The court found that the subcontractor's lien rights did not extend beyond the termination date of the general contract (February 9, 2016, at the latest).

The subcontractor, Clarkway, had a responsibility to stay informed about the project's status.

Since Clarkway registered its lien on April 15, 2016, more than 45 days after the general contract's termination, the lien was declared expired.

Costs were awarded to the owner.