Court File and Parties

CITATION: Stubbe’s Precast v. King & Columbia, 2018 ONSC 6539

COURT FILE NO.: 18-919 JR

DATE: 2018-10-31

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: Stubbe’s Precast Commercial Ltd., Plaintiff

AND: King & Columbia Inc., Defendant

BEFORE: Heeney, Conway and Sutherland JJ.

COUNSEL: Brendan Bowles and Jay Nathwani, for the Plaintiff Karey Anne Dhirani, for the Defendant

HEARD: October 31, 2018 at Hamilton

Endorsement

[1] This is a motion by the plaintiff pursuant to s. 21(5) of the Courts of Justice Act, R.S.O. 1990, c. C.43, to set aside the order of Justice Turnbull, sitting as a single judge of the Divisional Court, dated May 23, 2018 (“the motions judge”).

[2] By way of background, the defendant entered into a contract with Stubbe’s Precast Commercial Inc. (“Inc.”) for precast concrete work at its Waterloo property. Two separate construction liens against this property for unpaid work were registered. The problem is that Stubbe’s lawyer mistakenly named Stubbe’s Precast Commercial Ltd. (“Ltd.”) as the supplier on the lien documents instead of Inc. Subsequent to lien registration, Ltd. was incorporated.

[3] On January 10, 2018, Flynn J. heard a motion by the defendant seeking to discharge the liens and dismiss the action because of the Ltd./Inc. misnomer. The defendant argued that the liens are invalid because a non-existent entity cannot claim a lien, and that the liens could not be validated under s. 6 of the Construction Lien Act, R.S.O. 1990, c. C.30 (“the Act”). Flynn J. reasoned that the defendant was not prejudiced because of the error, and that the misnomer could be cured under s. 6 of the Act. Therefore, Flynn J. dismissed the motion.

[4] The defendant appealed the decision of Flynn J. The plaintiff then brought a motion to quash the appeal, on the basis that the order in question was interlocutory and that, pursuant to s. 71(3) of the Act, as it stood at the time, there was no appeal from an interlocutory order.

[5] The motions judge determined that the order of Flynn J. was a final order, and refused to quash the appeal.

[6] Section 21(5) of the Courts of Justice Act provides that a panel of the Divisional Court may set aside or vary the decision of a single motions judge of that court. The panel should only intervene if the judge sitting alone made an error of law or a palpable and overriding error of fact: Bedi v. Rahal, 2018 ONSC 1518 at para. 1.

[7] The issue as to whether an order dismissing a motion to discharge a lien is final or interlocutory has been settled by the Divisional Court: see Teperman & Sons Inc. v. Alros Products Ltd., [1994] O.J. No. 2349 (Ont. Ct. Gen. Div.); 570 South Service Road Inc. v. Lawrence-Paine & Associates Ltd., 2011 ONSC 3410 (Div. Ct.).

[8] In South Service, it was held at para. 14 that a motion to discharge a lien “is analogous to a motion for summary judgment. If judgment is granted, it is a final order. However, if summary judgment is refused, the case proceeds to trial, where the plaintiff must prove its case.”

[9] The defendant argues that Flynn J. did not merely dismiss the motion before him, he made a positive finding that the error was a misnomer, which could be cured under s. 6 of the Act. However, South Service also involved a situation where a positive finding had been made by the motions court that the lien had not expired. The court said, at paras. 11 – 13:

However, he urges this court to distinguish Teperman on the basis that the motions judge did more than simply refuse to order that the lien had expired; he actually made a positive ruling that the lien had not expired. The relevant passage in his reasons is para. 20, where the motions judge said this:

The claim for lien registered on behalf of LPA on October 20, 2010 has not expired. The motion by 570 is dismissed.

It is well settled law that one appeals an order made by the court, one does not appeal the reasons. The nature of the matter before the motions judge was defined by the Notice of Motion, the operative part of which is reproduced above. It sought a declaration that the lien had expired, and an order discharging the Claim for Lien. In dismissing that motion, the motions judge refused to grant the order sought. That is precisely what the Master did in Teperman. That case is indistinguishable from the case before us, and stands for the proposition that such an order is an interlocutory, not a final, order.

The order as issued and entered by the court simply says "the motion by 570 South Service Road is dismissed". It is that order which is before us on this appeal, and it is not a final order that settles for all time the validity of the Claim for Lien. The Respondent will still have the onus of proving, at trial, two things: first, that it has a valid preserved and perfected lien against the property in question; and second, that monies are owed to it for the supply of services or materials to the improvement. It will not be open to the Respondent to argue that it has discharged the onus of proving the validity of the lien merely because the Applicant was unsuccessful on this motion.

[10] As in South Service, the Flynn J. order, as issued and entered, simply dismissed the defendant’s motion.

[11] The Ontario Court of Appeal recently dealt with a similar issue in Prescott & Russell (United Counties) v. David S. Laflamme Construction Inc., 2018 ONCA 495. In that case, the plaintiff moved to add a party in a negligence action. The motion turned on whether its claim against the party to be added was barred by the provisions of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B. The court summarized the approach to be taken at para. 7:

The distinction between a final and interlocutory order for the purposes of determining the appropriate appellate forum is not always easy to make: see Salewski v. Lalonde, 2017 ONCA 515; Azzeh v. Legendre, 2017 ONCA 385. In the present context, the order will be said to be final if it deprives WSP of a substantive defence. If WSP can no longer rely on the Limitations Act defence, the order is final. However, if WSP can raise the Limitations Act defence at trial, the order is not final. To determine whether the order is final or interlocutory, one must examine the terms of the order, the motion judge's reasons for the order, the nature of the proceedings giving rise to the order, and other contextual factors that may inform the nature of the order.

[12] The court concluded as follows, at paras. 11 – 12:

We also cannot accept the contention that because the motion judge was required to make a finding as to the application of the Limitations Act, her finding must be regarded as binding in the litigation and therefore final. Section 21 of the Limitations Act forbids adding a party where the limitation period has expired. It does not foreclose adding a party absent an affirmative finding that the limitation period has not expired.

Having regard to the factors outlined above, we conclude that the trial judge's determination that the action was brought within the limitation period was made for the purposes of the motion only. The motion judge was satisfied that, for the purposes of determining whether to add WSP as a party, the limitation period had not expired. [emphasis added]

[13] The same can be said in the case at bar. The reasons of Flynn J. were made for purposes of the motion only. Nothing in his order precludes the defendant from raising the misnomer defence at trial, and indeed the plaintiff concedes this very point. At trial, the plaintiff will have the onus of proving that it has valid liens, which will include the issue of whether the plaintiff is the proper lien claimant.

[14] In our view, the motions judge erred in concluding that the order of Flynn J. was a final order.

[15] The motion is granted, and the order of the motions judge is set aside. As the order of Flynn J. is an interlocutory order, it is not subject to appeal. Accordingly, an order will go quashing the appeal of that order.

[16] Costs will be dealt with by a separate endorsement.

“T. A. Heeney J.”

Mr. Justice T. A. Heeney

“B. Conway J.”

Madam Justice B. Conway

“P. Sutherland J.”

Mr. Justice P. Sutherland

Date: October 31, 2018