Construction Law

The appellant lien claimants appealed an order refusing to confirm a Master's report under the Construction Lien Act.

The Master had found that the lien claimants were entitled to the full value of their claims from security posted by a mortgagee to vacate the liens, rather than just the deficiency in the holdback.

The Divisional Court dismissed the appeal, finding that the Master erred in principle by ignoring binding precedent (stare decisis) which limits recovery from posted security to the holdback deficiency.

The Court also upheld findings that the mortgagee was not an 'owner' at the relevant time, that holdbacks must be calculated individually for direct contractors rather than pooled, and that certain funds were not 'advances' made prior to the liens being vacated.

The appellant, Landform Canada Construction Ltd., appealed a Master's decision holding that funds received under a 2012 Settlement Agreement were impressed with a trust in favour of the respondent, Aluma Systems Inc., and other lien claimants of the same class.

Landform argued that Aluma had contracted out of its statutory lien rights.

The Divisional Court dismissed the appeal, finding that Aluma had only contracted out of its lien rights in connection with specific 2012 amounts and had explicitly reserved its rights to pursue claims for subsequent work and scaffolding supply.

The appellant appealed a decision upholding a Master's finding that the appellant owner repudiated a construction contract.

The Master found that the contract evolved over time due to multiple plan changes, requiring the owner to act reasonably and renegotiate construction milestones.

The Divisional Court dismissed the appeal, holding that the Master's conclusions were rooted in the evidence and the appeal judge correctly applied the palpable and overriding error standard of review.

The appellant appealed a Licence Appeal Tribunal decision dismissing her appeal for lack of standing.

After initiating a claim against Tarion for the cost of an unapproved fireplace installation, the appellant sold her home but entered into a collateral agreement with the purchasers to maintain her claim.

The Divisional Court upheld the Tribunal's decision, confirming that under the Ontario New Home Warranties Plan Act, warranties run with the home and former owners lack standing.

The court further held that the collateral agreement could not assign the fireplace claim, as the purchasers had no such claim to assign, and assigning warranty claims violates s. 13(6) of the Act.

The appellant appealed a decision upholding the Chief Building Officer's revocation of a building permit.

The appellant argued the judge erred by precluding an appeal to the OMB, finding the revocation mandatory rather than discretionary, and failing to grant relief based on promissory estoppel.

The Divisional Court dismissed the appeal, finding the judge did not adumbrate OMB appeal rights, the revocation was mandatory due to non-compliance with the Building Code Act, and neither the Chief Building Officer nor the judge on appeal had the authority to apply promissory estoppel.

The moving party, a third-party subcontractor, sought leave to appeal an interlocutory order dismissing its motion for summary judgment.

The underlying action involved a claim for damages resulting from severed power cables during demolition work.

The moving party argued that a full and final release barred the third-party claim for contribution and indemnity.

The Divisional Court dismissed the motion for leave, finding no conflicting decision and no good reason to doubt the correctness of the motions judge's conclusion that a trial was required to determine the parties' intentions regarding the release.

The appellant appealed a summary judgment decision finding that funds received by the respondent were not subject to an owner's trust under s. 7 of the Construction Lien Act and that there was no breach of trust regarding other funds.

The Divisional Court dismissed the appeal, finding no palpable and overriding error by the motion judge on the first issue, and noting that the second issue was improperly raised for the first time on appeal.

The respondent's cross-appeal on costs was also dismissed.

The appellant contractor appealed a Small Claims Court judgment awarding the respondent homeowner damages for deficient renovations, including a faulty foundation and a replacement deck.

The appellant argued the foundation claim was statute-barred and the deck damages were not pleaded.

The Divisional Court dismissed the appeal, finding no palpable and overriding error in the trial judge's conclusion that the foundation defect was not discovered until the homeowner learned weeping tile had not been installed.

The court also upheld the award for deck damages, noting the Small Claims Court's flexibility with pleadings where the defendant had advance notice and suffered no prejudice.

Following the quashing of the plaintiff's appeal, the successful defendant sought partial indemnity costs of $29,862.69.

The plaintiff argued the amount was excessive and sought a reduction to $6,500, alleging unreasonable conduct by the defendant's counsel.

The court found no evidence of unreasonable conduct and noted the defendant had to respond to the appeal pending the motion to quash.

After deducting amounts related to Superior Court proceedings, the court fixed the defendant's costs of the appeal and motion to quash at $22,000 inclusive of disbursements and HST.

The defendant appealed a Master's order granting the plaintiff leave to amend its Statement of Claim in an action for negligence and breach of contract arising from a sewage system upgrade project.

The defendant argued the amendments raised new, time-barred causes of action.

The Divisional Court dismissed the appeal, upholding the Master's findings that most amendments merely particularized the existing claims based on the same factual matrix.

For the amendments that did raise a new cause of action, the court agreed with the Master that the issue of discoverability was genuinely in dispute and should be resolved at trial, allowing the amendments subject to a limitation defence.

The plaintiff appealed an order vacating the setting down for trial of its construction lien action.

The motion judge had held that because the plaintiff had not delivered a defence to counterclaim when it set the action down, the pleadings were not closed, rendering the setting down invalid and causing the lien to expire under s. 37 of the Construction Lien Act.

The Divisional Court allowed the appeal, holding that the failure to include the defence to counterclaim in the trial record was an irregularity that could be cured under Rule 2.01 by granting leave to file an amended trial record, rather than a nullity that resulted in the expiry of the lien.

The defendant brought a motion to quash the plaintiff's appeal to the Divisional Court.

The plaintiff had appealed a Master's note in the procedure book that varied the cap on the defendant's counterclaim from $26,572.54 to $364,447.73.

The court found that the Master's note was an interlocutory step, as the merits of the case remained to be determined and the Master had not issued a confirmed report.

Under section 71 of the Construction Lien Act, an appeal from an interlocutory order is forbidden.

The motion was granted and the appeal was quashed.

The appellants appealed a Master's order declaring their construction lien expired for being registered more than 45 days after the last date of work.

The appellants argued that section 11 of the Limitations Act, 2002 extended the time limit for registration due to ongoing mediation efforts.

The Divisional Court dismissed the appeal, holding that a construction lien is not a 'claim pursued in court proceedings' under the Limitations Act, and applying section 11 would conflict with the complete code and policy objectives of the Construction Lien Act.

The appellant subcontractor registered a construction lien after not being paid.

The respondent mortgagee posted security to vacate the liens.

The property was sold, but proceeds were insufficient to pay the mortgages.

The appellant argued the posted security should cover the full amount owed by the owner to the general contractor, while the respondent argued it was limited to the 10 percent statutory holdback.

The Divisional Court dismissed the appeal, holding that under section 78(2) of the Construction Lien Act, the mortgagee has priority over all but the basic holdback, and section 44(6) prevents the notice holdback from extending to the posted security.

The appellant contractor appealed a trial judgment that dismissed his claim for unpaid renovation fees and the respondents' counterclaim for defective work, while ordering the appellant to pay substantial indemnity costs.

The Divisional Court allowed the appeal, finding the trial judge erred in law by implying a contractual term requiring the appellant to provide warranties, which contradicted the express written terms of the contract.

The court set aside the trial judgment, dismissed the counterclaim, and awarded the appellant his unpaid invoices totaling $22,727.54.

The appellant appealed a Small Claims Court judgment awarding the respondent contractor the balance owing for home renovations.

The appellant argued the contract was illegal and unenforceable because the respondent did not hold a building renovator's licence under the Toronto Municipal Code.

The Divisional Court dismissed the appeal, finding that the trial judge made no palpable and overriding error in concluding the appellant failed to prove the nature of the work required a licence.

The appellant, a supplier of partitioning walls, appealed a Small Claims Court decision dismissing its breach of contract claim against the respondent general contractor.

The respondent had ordered custom partitions but later suspended the project and refused delivery.

The trial judge dismissed the claim on the basis that the appellant failed to mitigate its damages by not stopping the manufacturing of the partitions after receiving notice of the suspension.

The Divisional Court found no palpable and overriding error in the trial judge's factual findings and concluded there was no error of law in applying the doctrine of mitigation.

The appeal was dismissed.

The applicant sought judicial review of a Case Management Master's decision dismissing a motion for her recusal based on a reasonable apprehension of bias in a construction lien proceeding.

The Divisional Court first determined it had inherent jurisdiction to hear the application despite the statutory prohibition on appeals from interlocutory orders under the Construction Lien Act, as the allegation went to fundamental fairness.

On the merits, the court applied the correctness standard and found that the applicant failed to establish a reasonable apprehension of bias.

The Master's procedural orders and expressions of frustration did not demonstrate bias to a reasonably informed bystander.

The application was dismissed.

The appellant warranty corporation appealed a Licence Appeal Tribunal decision ordering it to undertake remedial work on a new home's radiant floor heating system.

The Tribunal found the system was a major structural defect and ordered repairs estimated at $245,000.

The Divisional Court allowed the appeal, finding the Tribunal erred in law by failing to apply the $100,000 statutory cap on compensation for major structural defects under Regulation 892.

The matter was remitted to the Tribunal for a rehearing on the issue of remedy alone.

The appellants appealed a Small Claims Court judgment awarding the respondent damages for deficient roofing work.

The appellants argued that the trial judge erred by making findings of fact regarding the offset of shingles without supporting evidence.

The Divisional Court agreed that there was no evidence to support those specific findings.

However, the court upheld the judgment because other evidence, particularly regarding the improper overhang of the shingles, justified the complete removal of the roof and the damages awarded.

The appeal was dismissed.