Construction Law

In a standalone costs decision following a partially successful stay motion in construction lien litigation, the court determined costs based on overall success rather than issue-by-issue outcomes.

The moving party obtained one of three requested stays and was found to have achieved the motion's primary objective of securing a stay.

The court considered proportionality, complexity, and reasonable litigation expectations in assessing quantum.

Although the successful party sought substantially higher partial indemnity costs, the award was reduced to reflect limited success on the more time-consuming stay arguments.

Partial indemnity costs of $12,000 were ordered payable within 30 days.

The defendants moved to declare the plaintiff's construction lien expired, discharge the lien, vacate related registrations, and dismiss the action for delay.

The plaintiff conceded lien expiry but opposed dismissal of its joined breach of contract and unjust enrichment claims.

The court found that Rule 24.01 of the Rules of Civil Procedure does not apply in lien actions due to inconsistency with the Construction Act, but exercised its broad discretion under s. 47 of the Act to dismiss for delay.

The action had not progressed beyond the pleadings stage in over four years, the statement of claim had not been served, and no adequate explanation for the delay was provided.

The court dismissed the action in its entirety and awarded substantial indemnity costs to the defendants.

On a motion to vacate a construction lien, the moving party sought an order discharging the lien and vacating the related certificate of action on the basis that the lien was registered out of time under the Construction Act.

The court held the lien expired because it was filed on the 61st day after the last supply date pleaded, and also found the final cleanup and tool-removal activities were minor or trivial and did not extend lien rights.

The court declared the lien expired, ordered the lien and certificate vacated, and directed the matter to continue as an ordinary civil action under simplified procedure.

Leave was granted to amend pleadings to remove lien references, with procedural deadlines set.

Costs were fixed against the responding party.

The appellant general contractor sought to enforce a subcontract clause that imposed a ten-percent forfeiture of the subcontract price upon the respondent subcontractor's bankruptcy.

The majority held that the anti-deprivation rule, a longstanding principle of Canadian common law, renders void any contractual provision that is triggered by insolvency and removes value from the insolvent's estate that would otherwise have been available to creditors.

Applying an effects-based test, the majority found that clause VII Q(d) constituted a direct violation of the anti-deprivation rule and could not be rescued by the law of set-off.

Côté J. dissented, concluding that the anti-deprivation rule should incorporate a bona fide commercial purpose element derived from its common law origins, and that the clause at issue served such a purpose.

The moving party sought to set aside a default judgment entered after he failed to attend trial in a construction dispute involving unpaid subcontractor invoices and alleged breach of trust under the Construction Lien Act.

The court applied the established three‑part test for setting aside default judgments, considering whether there was a plausible excuse for failing to attend trial, whether the motion was brought promptly, and whether a defence on the merits existed.

The court found the moving party knew of the trial date, deliberately failed to attend, delayed unreasonably in seeking relief, and lacked a viable defence, including evidence that he exercised effective control over the corporation that breached the statutory trust.

The motion to set aside the judgment and related enforcement orders was dismissed, though the court directed steps toward examination in aid of execution and potential production of a mortgage discharge statement.

A commercial plaintiff sued a roofing contractor for breach of contract after repair work on a commercial roof allegedly failed shortly after completion.

The contract included a three‑year warranty for repair defects.

The court found that the roof continued to leak in the areas repaired by the contractor and that the contractor failed to return to honour the warranty despite complaints.

Evidence from employees and a roofing expert established that the repair work was defective and required replacement.

Judgment was granted for the plaintiff for the cost of remedial repairs and related damages.

Following a construction lien trial in which the plaintiff contractor’s lien claim was dismissed and the defendants succeeded on a counterclaim for overpayment, the court addressed the issue of costs under the Construction Lien Act.

The owners sought partial indemnity costs exceeding $83,000, including a significant expert witness disbursement.

The court applied the discretionary factors under Rule 57.01 of the Rules of Civil Procedure and considered complexity, success at trial, and the parties’ conduct.

The contractor argued there had been divided success and challenged the necessity of certain legal work and disbursements, but the court rejected these submissions.

Concluding that the owners were the successful parties and that their claimed costs were reasonable within the expectations of the litigation, the court awarded partial indemnity costs with a reduction to one expert report.

The plaintiff supplier brought a motion for summary judgment for unpaid invoices and breach of trust under the Construction Lien Act arising from the supply of electrical equipment to several related contractor companies.

The court found the defendants had received goods without payment and provided no evidence disputing the invoiced amount.

Because the corporate defendants operated as iterations of the same family-run business and attempted to attribute liability to a dormant company, the court treated them as alter egos and held them jointly and severally liable.

However, the court declined to grant summary judgment on the alleged breach of statutory trust, finding further production and cross-examination necessary to determine whether trust funds had been received and improperly disbursed.

Judgment for the invoiced amount was granted, with the trust claim adjourned for further evidence.

A contractor sought a declaration enforcing a construction lien for unpaid excavation and waterproofing work performed on a residential property.

The homeowners counterclaimed, alleging the work failed to stop existing basement leaks and caused additional water infiltration due to an improperly functioning drainage system.

After reviewing expert evidence, photographs, and testimony regarding the installation of weeping tiles, grading, and waterproofing, the court found the contractor failed to fulfill its contractual obligation to stop the leaks.

The evidence established that water infiltration continued and a new leak developed after the work, requiring a complete replacement of the waterproofing and drainage system by another contractor.

The court dismissed the lien claim and awarded damages representing the reasonable cost of the replacement work, less the original contract amount and unrelated improvements.

In a construction lien proceeding, the moving party sought to set the action down for trial on the existing pleadings before expiry of the statutory deadline under section 37.

The responding party objected, arguing the proposal would improperly extend time and delay the action.

The court distinguished prior authority and found the procedural history showed active steps had been taken to advance the matter within time.

The court held the objection sought an unwarranted tactical advantage and accepted the proposed without-prejudice filing approach pending rulings on the motion and cross-motion.

In companion construction lien actions, the defendants moved for security for costs against corporate plaintiffs under Rule 56.01(1)(d) of the Rules of Civil Procedure.

Because the proceedings were lien actions, the defendants also required leave under s. 67(2) of the Construction Lien Act to bring the motions.

The court held that leave should not be granted because ordering security was not “necessary” to achieve procedural fairness and would effectively terminate claims that were not plainly devoid of merit.

Although the plaintiffs were impecunious, they demonstrated that their shareholders lacked the resources to fund security and that the actions had arguable merit.

The motions for security for costs were therefore dismissed.

A third party brought a motion under Rule 21.01(1)(b) of the Rules of Civil Procedure to strike a third party claim for contribution and indemnity on the basis that it disclosed no reasonable cause of action.

The moving party argued that there was no contractual relationship with the defendant in the main action and therefore no basis for liability, and further that the damages claimed were not the same.

The court applied the generous “plain and obvious” test governing motions to strike and reviewed the scope of third party claims under Rule 29.01.

It held that it was arguable the parties owed each other a duty of care in negligence arising from their roles in the same construction project and that the claim could also constitute an independent claim arising from the same transaction.

Because it was not plain and obvious that the claim disclosed no reasonable cause of action, the motion to dismiss the third party claim was refused.

A contractor sought to enforce lien and related claims against a land vendor after a hotel purchaser defaulted on payment for servicing work on the parcel to be sold.

The court held the vendor was not an owner within sections 1.1 or 18 of the Construction Lien Act for the impugned work, finding no request, privity, consent, or joint/common ownership status that would ground liability.

Claims in unjust enrichment and quantum meruit were rejected because the deprivation flowed from the purchaser’s contractual breach and no corresponding enrichment by the vendor was established.

The court found the contractor’s proven damages remained those already reflected in judgments against the purchaser.

The action was dismissed with costs, but the contractor was found entitled to a lien against the purchaser’s $25,000 deposit held by the vendor.

A contractor commenced a construction lien action seeking payment for renovation and rehabilitation work performed on a 14‑unit residential building.

The owners disputed entitlement to several claimed extras and asserted set‑offs for incomplete and deficient work.

The court interpreted the contract documents collectively, finding certain alleged extras fell within the original contractual scope while others were compensable, including electrical work allowed on a quantum meruit basis and limited delay costs.

The court held the owners wrongfully terminated the contract prior to completion.

Damages were calculated as the contract price plus allowable extras, less completion costs and proven deficiencies, resulting in judgment for the contractor.

The moving defendants sought partial summary judgment dismissing the action against a corporate affiliate and a corporate officer in a construction dispute relating to a condominium development project.

The plaintiff alleged that the officer induced breach of contract, made misrepresentations, conspired with lenders, and that the corporate affiliate was effectively the alter ego of the contractor.

The court reviewed the amended Rule 20 summary judgment framework and the Court of Appeal’s guidance in Combined Air Mechanical Services Inc. v. Flesch, particularly the limits on a master’s authority and the requirement to determine whether a full appreciation of the evidence is possible without a trial.

Although the evidentiary record against the moving defendants was weak and the legal theories faced significant obstacles, the court held that the complex factual matrix and unresolved issues relating to the main breach of contract claim prevented a proper assessment on the record.

Summary judgment was therefore refused.

A construction contractor sued a homeowner for unpaid amounts under a residential renovation contract and for authorized extras.

The homeowner counterclaimed for alleged deficiencies, completion costs, and other expenses.

The court reconstructed the terms of the contract based on quotes, oral agreements, and communications because no written contract existed.

It found the homeowner breached the contract by refusing to pay a reasonable portion of the progress payment and by denying the contractor access to complete the work and remedy minor deficiencies.

The court held that the contractor was entitled to the unpaid contract balance and payment for authorized extras, subject to deductions for reasonable completion costs.

Judgment was granted for the contractor and the counterclaim was dismissed.

A contractor sued a homeowner for unpaid renovation invoices totalling approximately $40,996.60 after deducting payments already received.

The homeowner counterclaimed alleging defective workmanship and sought the cost of demolishing and redoing the work.

The court found that the renovation contract lacked clarity regarding the scope of work, that the parties ignored key contractual procedures such as written change orders, and that the invoices did not reliably establish the work performed.

Evidence showed deficiencies in tile installation, but the homeowner failed to prove the cost of remediation with admissible or reliable evidence.

Because neither party established their claims on the balance of probabilities, both the action and the counterclaim were dismissed.

The appellant appealed a Small Claims Court decision dismissing his claim for damages arising from alleged defective paving work on his driveway.

He argued that the respondent failed to properly prepare the sub-base and should have installed a geotextile membrane due to the presence of clay, leading to cracking and alleged sinking of the driveway.

The appellate court held that the trial judge reasonably found the appellant failed to prove the presence of clay, subsidence, or substandard workmanship.

The court also held that evidentiary rulings and minor factual misstatements by the trial judge did not constitute reviewable error affecting the outcome.

Applying appellate deference to factual findings, the court dismissed the appeal.

The plaintiff subcontractor brought a motion for partial summary judgment against a surety insurer under labour and material payment bonds after obtaining default judgments against the general contractor in Small Claims Court.

The insurer opposed the motion, arguing that multiple factual issues required determination at trial, including whether the bonds provided coverage, whether notice requirements were met, and whether limitation defences applied.

Applying the post‑amendment summary judgment framework and the Court of Appeal’s guidance in Combined Air Mechanical Services Inc. v. Flesch, the court held that the competing affidavits revealed significant factual disputes requiring credibility assessments.

The court concluded that the “full appreciation test” could not be satisfied on the motion record.

The motion for partial summary judgment was dismissed and the matter was directed to proceed by summary trial under Rule 76.

A construction contractor sued a municipality for damages arising from delay in authorizing work after the contractor’s tender was accepted for a landfill leachate system project.

The court held that the municipality was responsible for two overlapping periods of delay: the late communication of the contract award and the municipality’s failure to resolve whether the contractor’s proposed construction methodology formed part of the contract.

Interpreting the tender documents, the court concluded that the methodology submission was required to be incorporated into the contract and that the contractor was justified in insisting upon its inclusion before commencing work.

The delays forced a split construction schedule and caused financial losses including lost revenue, escalation costs, refinancing expenses, and equipment rentals.

Damages were assessed using the plaintiff’s expert methodology and awarded accordingly.