Construction Law

The plaintiffs, a precast concrete manufacturer and its sales agent, sued an engineering company and its principal for breach of contract and negligence arising from delayed and error-filled engineering drawings for a parking garage project.

The court found the defendants liable in both contract and tort for pure economic loss.

The court admitted subcontractor invoices as business records under the principled approach to hearsay to prove damages.

The defendants' third-party claim against their insurers was partially allowed, with the court allocating damages between covered errors and excluded delays.

The self-represented plaintiff brought a motion to transfer her Small Claims Court action against a home builder to the Superior Court of Justice, amend her claim to increase damages, and add a flooring contractor as a defendant.

The court dismissed the motion, finding that the plaintiff had deliberately chosen the Small Claims Court forum and that there were no new facts to justify a transfer.

Furthermore, the court held that the proposed new claims and the claim against the new defendant were statute-barred under the Limitations Act, 2002, as the plaintiff had knowledge of the defects more than two years before seeking to amend her claim.

A subsequent lien claimant brought a motion to vary an interim report that directed the distribution of trust funds to original lien claimants.

The moving party sought to attach funds payable to its contractor to satisfy its own subsequent liens.

The court declined to vary the interim report, finding that the settlement agreement among the original lien claimants was valid.

However, the court ordered that the funds received by the contractor be impressed with a trust in favour of the moving party and other subtrades, and directed the contractor to pay 10% of the received funds to the moving party pursuant to a prior agreement.

The plaintiff subcontractor brought a motion for summary judgment against the individual defendants for breach of trust under the Construction Lien Act.

The corporate contractor had failed to pay the plaintiff for completed flooring work despite receiving funds from the owners and swearing a statutory declaration that all sub-trades had been paid.

The court found a breach of trust occurred and held two of the individual defendants personally liable under s. 13(1) of the Act, finding they had effective control of the corporation and acquiesced in the breach.

The action against a third individual defendant, an employee, was dismissed.

The plaintiff masonry company brought an action for unpaid services under a verbal, cash-based contract for the installation of stone veneer and chimneys on the defendants' new home.

The defendants counterclaimed for the cost of remedial work, alleging the masonry was defective and not compliant with the building code.

The court found that both parties entered into an imprecise, 'under the table' arrangement and shared responsibility for the project's shortcomings.

Concluding that the plaintiff received less than expected but was entitled to less due to the final result, and that the defendants as builder/contractors bore responsibility for the conditions, the court dismissed both the main action and the counterclaim.

The Ministry of Transportation (MTO) awarded a contract to Leveque for highway surface treatment.

The initial treatment failed shortly after application.

MTO ordered Leveque to remove and replace it, arguing Leveque was responsible under the contract's warranty for selecting incompatible aggregate.

Leveque performed the work under protest and sued for breach of contract.

The court found the contract was a method specification, meaning MTO bore the risk of the design's performance.

The court held that the failure was primarily caused by MTO's excessive binder application rates, poor weather, and MTO's refusal to restrict heavy truck traffic or permit sanding.

MTO was found solely liable for breach of contract and ordered to pay damages for the extra work.

The plaintiff contractor brought a construction lien action against the defendant owner for unpaid extras on a commercial renovation project.

The parties had agreed to a fixed-price contract, but the plaintiff claimed it performed numerous extras at the owner's request.

The owner argued the fixed price was an upset limit and claimed set-off for deficiencies.

The court found that the owner had expressly or impliedly authorized most of the extras and waived any requirement for written authorization.

The court dismissed the owner's claim for set-off because it failed to give the contractor notice of the alleged defects and an opportunity to correct them.

The contractor was awarded a lien judgment for $82,185.82.

The plaintiff subcontractor brought a construction lien action against the defendant general contractor for unpaid contract amounts and extras on a school renovation project.

The defendant argued that no amounts were due under the contract's 'pay when paid' provisions and claimed back-charges for uncompleted work and a PST credit.

The court held that the Construction Lien Act supersedes the contract's payment terms.

The court allowed most of the plaintiff's claims for extras, dismissed the defendant's claim for a PST credit, but allowed the defendant's back-charge for uncompleted brickwork.

The plaintiff was awarded a net judgment of $27,450.95.

In a reference under the Construction Lien Act, multiple contractors sought to enforce their claims for lien against the owner and mortgagees of a townhouse development.

The owner had defaulted, and a subsequent mortgagee posted security under s. 44(1) to vacate the liens and facilitate the sale of the remaining units.

The court determined the timeliness and quantum of the various lien claims.

The court held that because the mortgagee chose to post security under s. 44(1) rather than s. 78(10), the liens ceased to attach to the premises and instead became a charge on the posted security in full, rather than being limited to the holdback deficiency.

Alternatively, the court found the mortgagee had acted as an 'owner' under the Act by taking over the completion and sale of the project.

The plaintiff elevator maintenance company registered ten construction liens against five apartment buildings owned by the defendants for unpaid maintenance and repair services totaling $122,810.30.

The defendants claimed a set-off of $75,000, alleging the plaintiff failed to properly maintain the elevators, necessitating upgrades by a new contractor.

The court found the plaintiff proved its accounts and the defendants failed to prove any breach of contract by the plaintiff.

The court upheld the liens, including those for advance payments, and dismissed the defendants' set-off claim.

The court also dismissed a mid-trial recusal motion brought by the defendants.

Following a trial in a construction contract dispute where the plaintiff recovered approximately 33% of its claim, the parties made written submissions on costs and pre-judgment interest.

The plaintiff sought partial indemnity costs, while the defendant argued for no costs, asserting the matter should have been brought in Small Claims Court.

The Master confirmed the preliminary ruling of no order as to costs due to divided success, finding that the plaintiff could not have transferred the action to Small Claims Court because of the defendant's $50,000 counterclaim.

The Master also confirmed the pre-judgment interest rate at the presumptive statutory rate of 3.3%.

The contractor brought an ex parte motion to substitute a letter of credit for posted cash security under the Construction Lien Act.

The proposed letter of credit was made subject to ICC Publication 590.

The Master dismissed the motion, finding that the inclusion of the ICC Publication 590 term made the letter of credit non-equivalent to the prescribed Financial Guarantee Bond (Form 23), as it raised the potential for the issuer to refuse payment and embroil the Accountant of the Superior Court in litigation.

The moving defendants, including a receiver manager and a bank, brought a motion for summary judgment to dismiss the plaintiff condominium corporation's claims for construction deficiencies, breach of warranty, oppression, and conspiracy, as well as various cross-claims.

Applying the 'full appreciation' test from Combined Air, the court found that the voluminous and conflicting evidentiary record precluded making dispositive findings on a summary judgment motion.

The motion was dismissed with respect to the plaintiff and the cross-claiming architect, and the action was directed to proceed to trial.

The plaintiff contractor sued the defendant owner for approximately $17,000 in unpaid services related to a house renovation project.

The defendant counterclaimed for approximately $90,000, alleging overcharging, incomplete work, and defective construction, including a deviation from the cathedral ceiling design.

The court found that the plaintiff had completed over 90% of the contracted work and was entitled to payment for work performed and agreed extras.

The court rejected the defendant's claim of fundamental breach, finding the ceiling deviation immaterial, but awarded the defendant minor damages for delay and minor deviations.

The plaintiff was awarded a net sum of $15,960.37.

The defendant general contractor brought a motion to set aside a noting in default and default judgment obtained by the plaintiff subcontractor in a construction lien action.

The plaintiff had served the statement of claim by registered mail to an address it knew the defendant no longer occupied, despite knowing the defendant's actual business address.

The court found the defendant moved promptly upon learning of the default judgment, adequately explained the default due to the method of service, and provided sufficient evidence of a defence based on alleged deficiencies and the lien being registered out of time.

The motion was granted and the default judgment was set aside with no order as to costs.

The plaintiff subcontractor registered a claim for lien for concrete foundation work.

The defendants argued the lien was registered out of time.

The plaintiff claimed it attended the site on February 19, 2009, to cut ties and chip concrete, which would bring the April 6, 2009 registration within the 45-day limit.

The court found the February work was to rectify minor deficiencies and amounted to an attempt to bootstrap the claim for lien.

The court held the lien expired because the time for preservation began running when the substantive work was completed in November 2008.

The plaintiff brought a motion for leave to amend its statement of claim in a construction lien action.

The defendant opposed the motion and brought a cross-motion to strike the plaintiff's defence to the counterclaim, arguing the amendments raised new causes of action after the expiry of the limitation period.

The court granted the plaintiff's motion, finding the proposed amendments merely expanded and clarified the original pleadings regarding a joint venture and oral agreements, rather than creating new causes of action.

The court found no prejudice to the defendant, as discoveries had not yet occurred, and dismissed the defendant's cross-motion.

The plaintiff demolition contractor registered a construction lien after abandoning the site due to the defendant developer's failure to pay a progress draw.

The dispute centered on whether the contract required crushing concrete to 3-inch minus or 3/4-inch minus, and whether the plaintiff was responsible for removing asphalt and imported materials.

The court found the defendant breached the contract by failing to pay the progress draw, the contract specified a 3-inch minus crush, and the lien was registered in time.

After accounting for payments and proven backcharges, the defendant was ordered to pay the plaintiff $81,271.93.

A priority dispute arose between a building mortgagee and construction lien claimants over funds paid into court to vacate liens.

The plaintiff lien claimant argued the priority extended to the full amount owed by the owner to the general contractor.

The mortgagee argued priority was limited to the 10 percent statutory holdback.

The court held that paying money into court to vacate a lien does not alter the priority scheme under the Construction Lien Act, and the lien claimants' priority over the mortgagee was limited to the statutory holdback amount.

The plaintiff brought a motion to enforce an accepted offer to settle a construction lien claim for $75,000.

The defendant argued that the settlement sum was all-inclusive and included costs, and alternatively asked the court to exercise its discretion not to enforce the settlement.

The court found that the offer was made pursuant to Rule 49 and, being silent on costs, entitled the plaintiff to assessed costs up to the date of acceptance under Rule 49.07(5).

The court declined to exercise its discretion to reject the settlement, finding no evidence of mistake and noting the prejudice to the plaintiff if the lengthy litigation were to continue.