Harvey Joseph Kirsh

A subcontractor filed a construction lien arising from specialized grouting and monitoring work performed in connection with the Toronto-York subway extension beneath a university building.

The general contractor moved to discharge the lien, arguing the work occurred on a railway right-of-way and that the university was not an “owner” under the Construction Lien Act.

The court rejected these arguments, holding the university qualified as an owner because the work was requested, controlled, and directly benefitted its property.

The lien was therefore validly preserved by registration on title.

The court also held that the subcontract’s broad arbitration clause required the underlying payment dispute to proceed to arbitration and stayed the lien action while refusing to add the transit authority as a third party.

Following dismissal of the defendants’ Rule 21 motion to strike the claim, the court addressed the issue of costs.

The plaintiffs sought costs, arguing the motion was unreasonable and unsupported by authority, while the defendants contended the motion raised a novel legal issue and that no costs should be ordered.

Applying s.131 of the Courts of Justice Act and Rule 57.01 of the Rules of Civil Procedure, the court considered proportionality, complexity, and the results achieved.

The court rejected the argument that the motion was patently unreasonable but held that the successful parties were entitled to costs.

Partial indemnity costs of $16,500 were awarded to the plaintiffs.

The defendants brought a Rule 21 motion seeking a determination before trial that the plaintiffs’ claim against a surety under a performance bond could not exceed the bond amount and requesting that the action be stayed or limited accordingly.

The dispute arose from a subcontract for compensation grouting work on the Toronto‑York Spadina Subway Extension project.

The plaintiffs alleged that the subcontractor’s breaches caused extensive delay damages and that the surety’s conduct, including alleged inaction and misrepresentation following default, exposed it to liability beyond the bond amount.

The court held that it was not plain and obvious that the plaintiffs’ claim had no reasonable prospect of success, particularly where the pleadings alleged conduct by the surety potentially giving rise to liability beyond the bond cap.

As the legal question was unsettled in Canadian jurisprudence and factual issues remained disputed, the motion was dismissed.