Douglas E. Snider

The applicant sought leave under s. 45(1) of the Arbitration Act, 1991 to appeal an arbitrator’s award arising from a construction dispute between an owner and a general contractor.

The arbitration concerned liability for additional costs incurred by a subcontractor performing earthworks and other invoiced work after anticipated soil disposal arrangements failed.

The applicant argued the arbitrator committed errors of law in interpreting the construction contracts, calculating damages, and failing to consider legal doctrines such as waiver of condition and issue estoppel.

The court held that the proposed grounds of appeal raised pure questions of law, including the proper interpretation of contractual provisions and the application of legal principles governing damages.

Leave to appeal the arbitration award was therefore granted.

Costs decision following motions for security for costs in two construction lien actions.

The responding parties sought partial indemnity costs totaling over $12,000 for the motions, while the moving parties argued that costs should not exceed $5,000 and should be payable in the cause or deferred pending resolution of undertakings issues.

The court held that the usual rule that costs follow the event applied and that the security for costs motions were discrete from the undertakings issues.

Applying Rule 57.01, the court found the time claimed for preparation excessive and reduced the requested amounts.

Partial indemnity costs of $5,000 and $3,500 respectively were awarded, inclusive of disbursements and HST.

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.