Construction Law

The individual defendants brought a motion for summary judgment to dismiss the plaintiff's breach of trust claim under the Construction Lien Act, arguing the claim was statute-barred.

The plaintiff had agreed to extend the time for payment of outstanding invoices after the corporate defendant requested forbearance.

The court found that the forbearance agreement was supported by consideration and was therefore enforceable.

Furthermore, the court held that the limitation period for a breach of trust claim does not automatically commence when payment is due, but is governed by the discoverability principle under the Limitations Act, 2002.

The motion for summary judgment was dismissed.

The plaintiff structural steel subcontractor registered a construction lien and sued the general contractor and the owner for unpaid invoices and extras on a fixed-price contract.

The subcontractor had abandoned the project prior to completion due to non-payment.

The court found that the subcontractor breached the contract by walking away, as progress payments for the final phase were not yet due.

The subcontractor's claims for extras were largely dismissed because they were not approved in advance and lacked independent proof of value.

The owner's counterclaim for delay and inspection costs was partially allowed, while the general contractor's counterclaim was dismissed for lack of evidence.

The subcontractor and general contractor were found jointly and severally liable to the owner for delay and inspection costs, setting off the small amount allowed for one extra.

The defendant brought a motion to set aside a default judgment and to declare the plaintiff's construction lien expired.

The court refused to set aside the default judgment, finding that although service of the statement of claim was technically defective, it came to the defendant's attention in a timely manner.

Furthermore, the defendant failed to provide a plausible excuse for the default or credible evidence of an arguable defence on the merits.

However, the court granted the motion to declare the construction lien expired, as the plaintiff had failed to set the action down for trial within the two-year period required by section 37 of the Construction Lien Act, and a registrar's default judgment does not satisfy this requirement.

Following the settlement of a construction dispute for $58,000, the plaintiffs sought costs and prejudgment interest.

The court reviewed the plaintiffs' bill of costs, noting the settlement was slightly more favourable than their pre-trial offer.

Applying the factors under the Rules of Civil Procedure and the Courts of Justice Act, the court awarded the plaintiffs $48,000 in costs on a partial indemnity basis, reducing the claimed amount to account for work related to a failed arbitration and proportionality to the settlement.

Prejudgment interest was also awarded at a rate of 4.8%, totaling $23,156.78.

Following a previous endorsement, the parties participated in a case conference to schedule the trial of an issue regarding whether they engaged in a course of conduct to vary the terms of a subcontract for extra work.

The court ordered the parties to file a Joint Supplementary Brief of Evidence by April 11, 2016.

A full-day hearing was scheduled for May 11, 2016, in the event cross-examinations and further legal argument are necessary.

The defendants brought a motion for summary judgment or to strike the plaintiff's breach of trust claim under the Construction Lien Act.

The defendants argued the claim was moot because they had placed funds equal to the plaintiff's original claim in their lawyer's trust account.

The court dismissed the motion, finding that the breach of trust claim had substantive legal value independent of the breach of contract claim, particularly because a judgment for breach of trust would likely survive a potential bankruptcy under section 178(1)(d) of the Bankruptcy and Insolvency Act.

The plaintiff, acting as receiver for a masonry subcontractor, brought a motion for summary judgment against the defendant general contractor for $100,701.83 in unpaid invoices and holdbacks.

The defendant argued the extra work was unauthorized and claimed set-offs for back charges and alleged deficiencies (efflorescence).

The court dismissed the set-off defences, finding no evidence of required prior notice for the back charges and no evidence that the remedial work for the efflorescence was necessary.

However, the court ordered a mini-trial to determine whether the parties' course of conduct varied the strict contractual requirement for written authorization of extra work.

The plaintiff subcontractor brought a motion for summary judgment against the defendant property owner and new general contractor for the tort of conversion.

After the original general contractor became insolvent, the plaintiff sought to remove its custom-built equipment from the construction site.

The defendants refused access, claiming the equipment had been paid for under the original contract.

The court found that title to the equipment never passed to the defendants and their refusal to allow the plaintiff to retrieve it constituted conversion.

Summary judgment was granted and damages were awarded based on the defendants' previous counter-offer to purchase the equipment.

The defendants brought a motion for security for costs in a construction lien action, alleging the plaintiff had insufficient assets.

The plaintiff did not assert impecuniosity or provide financial documents.

The court granted leave for the motion under s. 67(2) of the Construction Lien Act and ordered the plaintiff to pay $36,000 in security for costs in two installments, plus costs of the motion.

The plaintiff subcontractor claimed payment for extras on a watermain project, while the defendant general contractor counterclaimed for backcharges.

The court applied the Goldsmith test to determine whether the claimed extras were within the scope of the subcontract.

The court dismissed the claims for remobilization, flood damage, sludge removal, and re-inspection, finding them either unproven or within the contract's scope.

However, the court awarded the subcontractor $39,179.71 for additional hand lining required due to an unforeseen change in the tunnel's slope.

The general contractor's counterclaim for backcharges was dismissed for lack of proof.

The applicant developer brought an application seeking a declaration that the respondent mechanical trade contractor was contractually required to defend and indemnify it in an underlying construction defect action regarding a condominium project.

The court distinguished the duty to defend in a commercial construction contract from that in an insurance policy, noting the indemnification clause was drafted by the developer and must be interpreted strictly against it (contra proferentem).

The court dismissed the application against the contractor's parent company but ordered the contracting subsidiary to pay 33.33% of the developer's reasonable legal fees in the underlying action, reflecting its limited obligation.

Following the dismissal of Unimac's motion seeking the recusal of the Master on grounds of racial bias, the responding parties sought costs.

Unimac argued costs should be deferred to the Divisional Court pending judicial review.

The Master determined it was appropriate to fix costs immediately.

Finding that Unimac's motion was an abuse of process, involved scurrilous and unsubstantiated attacks on the integrity of the judicial officer, caused unnecessary delay, and that Unimac failed to accept a reasonable offer to settle, the Master awarded costs on a substantial indemnity scale.

Unimac was ordered to pay $52,810.37 to the Lead Respondents and $6,728.30 to St. Clare's.

The plaintiff subcontractor brought a motion for leave to issue an amended Statement of Claim, an order for production of documents, and examinations for discovery in a construction lien action.

The defendant ABB brought a cross-motion for leave to seek security for costs.

The court granted the plaintiff's motion for production and discovery, finding that the plaintiff's claim went beyond a typical lien action by alleging direct contractual undertakings by ABB.

The court dismissed ABB's cross-motion for security for costs, finding insufficient evidence that the plaintiff lacked assets.

The defendant, Metrolinx, brought a motion for security for costs against the plaintiff, Unimac, in a construction lien action.

Metrolinx argued that Unimac had commenced multiple proceedings for the same relief and had insufficient assets in Ontario to pay costs.

The Master granted leave under the Construction Lien Act to bring the motion, finding that Metrolinx met its initial onus on both grounds.

Unimac failed to prove it had sufficient assets or that the multiplicity of proceedings was justified.

The Master ordered Unimac to post $264,712.73 as security for costs, discounting the requested amount to account for Metrolinx's counterclaim.

The defendant municipality moved for partial summary judgment to dismiss the plaintiff contractor's claim for additional construction fees, arguing the claim was statute-barred.

The plaintiff argued that the limitation period was tolled by promissory estoppel due to ongoing negotiations.

The court found that the cause of action was discovered by January 2010 at the latest, when formal default notices were exchanged, and that the defendant made no representation to forgo its limitation period rights.

The motion was granted and the claim for additional fees was dismissed as statute-barred.

The moving parties, construction lien creditors of the Mady Group of Companies, brought a motion seeking to lift a CCAA stay of proceedings, amend their statements of claim, and obtain a Mareva injunction against several individuals and corporations.

The court dismissed the motion, finding that the moving parties failed to make full and fair disclosure, failed to establish a strong prima facie case of fraud or breach of trust, and provided no evidence of a risk of dissipation or removal of assets from the jurisdiction.

The defendant brought a motion for security for costs under Rule 56.01(1)(d), arguing the corporate plaintiff had insufficient assets in Ontario to pay a potential costs award.

The plaintiff, a small trade contractor seeking $340,000 for unpaid invoices, opposed the motion.

The Master found the defendant failed to meet its initial burden, noting the plaintiff had ongoing contracts, work in progress, and accounts receivable, and the potential costs liability for defending the action was modest ($17,000).

The motion was dismissed with costs awarded to the plaintiff.

The plaintiff hired the defendants to perform renovations on his cottage, paying $21,000 for a flooring contract and $37,000 for time and materials.

After discovering he was being overcharged and that the defendants had removed a load-bearing wall without a permit, the plaintiff terminated the relationship and sued for breach of contract, negligence, assault, and punitive damages.

In an undefended trial, the court awarded the plaintiff $21,000 for the flooring contract due to a fundamental breach.

The claims for return of the renovation monies, assault, punitive damages, and a declaration under s. 178 of the Bankruptcy and Insolvency Act were dismissed.

Following a trial where the plaintiff's construction contract claims were dismissed and the defendant was awarded damages on its counterclaim, the court determined costs.

The defendant sought substantial indemnity costs based on an unaccepted offer to settle.

The court awarded partial indemnity costs to the defendant, noting the complexity of the issues, the amount at stake, and the defendant's success, but declined to award substantial indemnity costs because the defendant's counterclaim was only partially successful and poorly documented.

On an appeal in a construction lien proceeding, the court considered whether expiry of a perfected lien under s. 46(1) of the Construction Lien Act automatically required dismissal of the entire action, including joined contract claims.

The court held that s. 46(1) mandates dismissal of the action to enforce the lien, but that s. 47(1)(d) preserves discretion to dismiss or allow continuation of non-lien claims within the same action.

Applying that interpretation, the court found the Master had exercised the discretion to dismiss the whole proceeding and that, given four years of inactivity and the absence of responding evidence, there was no arguable basis to interfere.

The appeal was allowed, the Divisional Court order was set aside, and the Master's dismissal order was reinstated.