COURT FILE NO.: DC-06-0007-00 DATE: 20060602

ONTARIO SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

CUNNINGHAM ACJ., CHAPNIK J., THOMSON, J.

IN THE MATTER OF the Construction Lien Act, R.SO. 1990. c. C.30

B E T W E E N:

310 WASTE LTD. and WASTE EXCELLENCE CORP. Plaintiffs (Appellants)

• and -

CASBORO INDUSTRIES LIMITED, ROYAL COMPOSITES CO. a division of ROYAL GROUP TECHNOLOGIES INC., AL CASCIATO and BRUNO CASCIATO Defendants (Respondent)

COUNSEL: Duncan W. Glaholt, for the Plaintiffs (Appellants) Evan L.Tingley, for the Defendant (Respondent), Casboro Industries Limited

HEARD at Brampton: May 30, 2006

REASONS FOR JUDGMENT

CHAPNIK J.

[1] The appellants (plaintiffs) appeal to the Divisional Court an Order of Quigley J. made on January 16, 2006 in Brampton. Justice Quigley discharged and vacated the registration of the plaintiffs’ construction lien, dismissed the plaintiffs’ lien action with costs, and vacated the registration of the plaintiffs’ certificate of action, upon the respondent’s motion under s. 47 of the Construction Lien Act, R.S.O. 1990, c.C. 30, as amended (the Act).

[2] By Supplementary Notice of Appeal, the appellants also appeal from Justice Quigley’s February 14, 2006 order as to costs.

BACKGROUND

1. The plaintiff Waste Excellence Corp. (“Wastecorp”) claimed a lien in the amount of $1,652,650.98, for the removal of tires from the defendants’ (Casboro’s) lands and premises, pursuant to a government order. Wastecorp preserved its lien by registration on September 10, 2003 and perfected its lien by issuing a statement of claim on October 10, 2003 and by registering a certificate of that action several days later.

2. Casboro and the defendant Royal Composites separately defended and counterclaimed. On June 17, 2004, Casboro moved before Justice Weekes to discharge Wastecorp’s lien on the basis that environmental clean-up of this type was “not lienable.” Justice Weekes dismissed Casboro’s motion in reasons released on June 23, 2004.

3. On July 6, 2004 Casboro appealed Justice Weekes’ “lienability” decision to the Divisional Court. On July 22, 2003 the form of the “lienability” order of Justice Weekes was settled, with costs reserved. On August 5, 2004, Casboro asked for an extension of time to perfect its appeal. Wastecorp consented to that extension and other requests made by Cosboro.

4. Cosboro ultimately perfected its appeal to Divisional Court on November 10, 2004. Wastecorp served its factum on January 11, 2005, and the appeal was ultimately heard by the Divisional Court on June 30, 2005, after which, the panel reserved its decision.

5. During the period of reserve, on October 10, 2005, the second anniversary of the issuance of the statement of claim in the Wastecorp lien passed and Wastecorp’s lien would have expired per s. 37(1) of the Act. As at October 25, 2005, the court file contained no order for the trial of the lien action and no trial record. On that basis while the “lienability” appeal was still reserved by the Divisional Court, Casboro on November 7, 2005 moved ex parte under s. 46 of the Act to vacate the lien.

6. A week later (on November 14, 2005), the Divisional Court released reasons dismissing the “lienability” appeal.

7. On November 16, 2005 as directed by Justice Baltman, the respondents served their motion under s. 46 of the Act to extinguish the Wastecorp lien based upon failure to set it down for trial within two years of its commencement. Wastecorp served a cross-motion to retroactively fix a date for trial, state a case to the Divisional Court under the special provision of s. 70 of the Act, or stay any order under s. 46 of the Act pending an appeal to Divisional Court.

8. Both the motion and cross-motion were heard by Justice Quigley on November 29, 2005. In reasons released January 15 and amended January 16, 2006 Justice Quigley allowed Casboro’s motion, but dismissed Wastecorp’s cross-motion save and except that Wastecorp was granted a stay of the order pending final disposition of any appeal from it, or a decision by the Ontario Court of Appeal reversing the Divisional Court on the fundamental “lienability” question, whichever should occur first.

THE COURT’S JURISDICTION AND STANDARD OF REVIEW

[3] The Divisional Court has jurisdiction to hear this appeal pursuant to section 71 of the Construction Lien Act:

Appeal to Divisional Court

71. (1) Subject to subsection (3), an appeal lies to the Divisional Court from a judgment or an order on a motion to oppose confirmation of a report under this Act.

Notice of appeal

2. A party wishing to appeal shall file and serve a notice of appeal within fifteen days of the date of the judgment or order, but the time for filing or serving the notice of appeal may be extended by the written consent of all parties, or by a single judge of the Divisional Court where an appropriate case is made out for doing so.

[4] The parties agree that the issue in this appeal is a pure question of law and as such, the standard of review is correctness; and, therefore, the court is free to replace the conclusion of the trial judge with its own. Housen v. Nikolaisen (2002), 2002 SCC 33, 211 D.L.R. (4th) 577 (S.C.C.)

ANALYSIS

[5] The appellant alleges that the motions judge erred in dismissing the plaintiffs’ lien action and in placing an onus on the lien claimant to show the “impossibility” of setting the lien action down for trial.

[6] According to the appellant, this a matter of first impression on the facts, namely, the perceived “anomaly” that the two-year limitation period under s. 37(1) of the Act would expire at a time when the question of the lienability itself was under reserve by the Divisional Court; and the res is not intra partes but between the court or the Government and the appellant.

[7] For the purpose of the appeal, the appellant agreed that no evidence was led by Wastecorp of “impossibility”, or attempts to set the action down for trial, or refusal to do so by court officials, or any other concrete steps to meet either of the two stipulations set out in s. 37 of the Act.

[8] However, the appellant submits that, to require a solicitor “to contrive” to obtain such evidence at the expense of his statutory duties under the Act, and to the lien court as an officer of that court, simply to preserve what is for the client, a remedial statutory right is both wrong in law and contrary to public policy. More particularly, the act of setting a lien action down “for what is in effect a special summary class action trial” involves an implicit representation by the lien claimant’s solicitor, to the court that there is prima facie statutory jurisdiction; and “no officer of the court should be placed in the position of making such a representation when that very issue is reserved before an appellate court.”

[9] Similar arguments were advanced by the appellant before Quigley J. The learned judge noted that an order under s. 46 of the Act does not deprive the court of jurisdiction with respect to the parties or other claims advanced under the Act, but only deprives the court of jurisdiction with respect to the lien claim since s. 46 makes it clear that upon the expiry of the two-year period stipulated in s. 37 of the Act, the court shall grant an order vacating the lien and lifting the certificate of pending action. Indeed, the jurisprudence consistently denies judicial discretion is embraced by the statute, the language of which is “pure and unequivocal” See, for example, Graham Bros. Construction Ltd. v. Correct Building Corp., [1991] O.J. No. 863 (Gen. Div.); Golden City Ceramic & Tile Co. v. Iona Corp., 1993 9364 (ON SCDC), [1993] O.J. No. 2410 (Div. Ct.); U.C.L. Underground Construction Ltd., v. High Glen Development Ltd. (1990), 1990 7014 (ON SC), 75 O.R. (2d) 603 (H.C.J.); Glencoe Insulation Co. v. 3170497 Canada Inc., [2003] O.J. No. 5834 (Div. Ct.). Moreover, no inherent jurisdiction exists to extend a limitation period provided by statute where there is no provision for same in the statute itself. Bird Construction Co. v. C.S. Yachts Ltd., [1989] O.J. No. 1659 (S.C.); aff’d [1990] O.J. No. 3166 (Div. Ct.)

[10] Nevertheless, the learned judge also noted on the authority of Mohiuddin v. Ahmadiyya Movement in Islam (Ontario) Inc. (1995), 24 C.L.R. (2d) 127 (C.A.), that “there may well be circumstances, such as when a matter central to the litigation between the parties is subject to reserve by an appellate court and where the failure to set the matter down for trial within the two-year period does not result from action or inaction of the parties themselves, where the relief sought ought to be granted.” (emphasis added)

[11] According to Quigley J., the failure here resulted directly from the inaction of appellants’ counsel since no evidence was advanced by Wastecorp of “impossibilitity”. He goes on to explain that there was no material filed to demonstrate an attempt by Wastecorp to set the matter down for trial within the two-year period or other steps to meet the statutory stipulations. In addition, no evidence was advanced to support its argument that to do so while the legal issue was subject to appellate review, would contravene the policy directives embodied in the Act. Thus, the evidence before the court provided “no factual support to Wastecorp’s assertion of impossibility.”

[12] Clearly, it was Wastecorp who asserted impossibility by arguing that it would be practically and legally impossible for Wastecorp’s counsel to have moved in the circumstances to set the lien action down for trial when the lienability itself was in issue and under reserve by the Divisional Court.

[13] In Mohiuddin, supra, the lien claimant’s action was dismissed for failure to attend for cross-examination. Though he appealed the dismissal, he failed to perfect the appeal before the two-year deadline.

[14] In dismissing his motion for an extension of the deadline, the court stated:

Assuming, without deciding, that there may be some discretion in the court in dealing with s. 37 of the Construction Lien Act, supra, the circumstances of this case do not warrant the exercise of that discretion. The delay prior to the expiry of the two-year limitation period was not due to the backlog of cases waiting to be heard in this Court, but to the fact that the appeal was not perfected. (emphasis added)

[15] In this case, the delay was not due to anything the court did or did not do. There was no event or happening over which the lien claimant had no control within the meaning of the jurisprudence. See, for example, Sayers & Associates Ltd. v. United Centre Inc. (1994), (sub nom. Forest Carpentry Ltd. v. Shoppers Trust Co.) 1994 10527 (ON SC), 17 O.R. (3d) 47, leave to appeal denied.

[16] Surely, if such were the case, the lien claimant would bear the onus to show that his failure to comply with the strict requirements of the Act was due to circumstances beyond his control; in other words, that it was impossible to comply with s. 37 of the Act. It is common ground that the action in this case could well have been set down irrespective of the Divisional Court’s decision on lienability.

[17] This is in no way inconsistent, as alleged, with the remedial “gatekeeping” duty arguably imposed on solicitors under the Act or with its policies, in particular, the orderly administration of justice. We do not agree that Wastecorp’s counsel would have shown contempt for the appellate court’s process had he set the lien action down for trial within the prescribed time limits; more importantly, there is no evidence to suggest that this was in the contemplation of the appellants’ solicitor at the relevant time.

[18] In JDM Developments Inc. v. J. Stollar Construction Ltd., [2006] O.J. No. 558 (S.C.J.), the claims for lien were held to have “no basis in reality.” Nevertheless, no costs were awarded against the lien claimant’s solicitor pursuant to s. 86(1) of the Act. There is little likelihood, in these circumstances, that the setting of the lien action down for trial pursuant to the provisions of the Act would have exposed Wastecorp’s solicitor to an adverse costs award under s. 86(1) of the Act.

[19] In our view, there was nothing preventing the appellant from complying with the clear provisions of the Act, and no “impossibility” from either a practical or legal perspective.

CONCLUSION

[20] The reasons of the motions judge are clear and compelling. In our view, he was correct in making the decision he did on the evidence before him.

[21] The appeal is therefore dismissed with costs to the respondent, as agreed, in the all inclusive sum of $6,500.

[22] After submissions, the learned judge ordered the plaintiffs to pay costs on a partial indemnity basis for the motion and cross-motion which was dismissed; and for the dismissal of the main action; totaling the all-inclusive amount of $18,671.20.

[23] In our view, he was entitled to do so.

[24] In the circumstances, leave to appeal the costs orders is granted, but the appeal is dismissed.

[25] The stay imposed by the Order of Quigley J. is extended until (1) the final disposition of any appeal from this decision, (2) the dismissal of any motion for leave to appeal, (3) if no motion for leave to appeal is brought or no appeal is taken, the expiration of the time within which to bring such motion or appeal, or (4) a decision of the Court of Appeal for Ontario in Court File No. C44832 reversing the decision of the Divisional Court in that matter, whichever should first occur.

Cunningham, ACJ.

Chapnik J.

Thomson J.

Released: June 2nd, 2006