Kenneth Peter Eccleston

The plaintiff brought a motion for default judgment against the defendants for unpaid equipment rentals.

The court found that the corporate defendant breached its trust obligations under the Construction Act by failing to pay the plaintiff from funds received for the construction projects.

The individual defendants, as directors and officers, were also found liable for the breach of trust.

The court granted judgment for the outstanding debt but declined to make a preemptive declaration that the judgment would survive a future bankruptcy.

The defendant moved for security for costs against the plaintiff, a Quebec holding company that acquired the claim via assignment from a bankrupt subcontractor.

Although the plaintiff demonstrated it had sufficient cash assets in Quebec (a reciprocating jurisdiction), the court ordered it to post $30,000 in security.

The court found that the overall justice of the case favoured an order because the plaintiff's assets were contingent on litigation success, the funds were essentially treated as the principal's personal property, and the plaintiff would suffer no prejudice from posting security.

This decision addresses four motions in consolidated construction lien actions.

Lien claimants Vestacon Limited and Plan Group Inc. sought to validate their liens against properties owned by 1302207 Ontario Limited (Peter Co.) and 364 Richmond Street West Inc. (Richmond Co.), following the bankruptcy of the tenant, Arc Productions Ltd. The court declared all three Certificates of Substantial Performance (CSPs) invalid due to premature issuance and insufficient property descriptions.

Consequently, Vestacon's lien was found to be timely, having been registered within 45 days of contract completion.

The court also affirmed the validity of Vestacon's Section 19 notices to the landlords, establishing their liability.

Furthermore, Vestacon's lien was extended to include the 364 Richmond Street West property, and leave was granted to add Richmond Co. as a defendant.

For Plan Group's lien, while the CSPs were invalid, a genuine issue for trial was found regarding the exact date of last supply, leading to the dismissal of the owners' motion to declare Plan Group's lien expired.

The appellant appealed a summary judgment enforcing a guarantee.

He argued the motion judge impermissibly made credibility findings and that the principal debtor's bankruptcy suspended his liability under the guarantee.

The Court of Appeal dismissed the appeal, holding that the motion judge properly found the appellant failed to put his best foot forward, and that a debtor's bankruptcy does not release a guarantor absent specific wording in the guarantee.