COURT FILE NO.: CV-19-622586 DATE: 2021 02 19
SUPERIOR COURT OF JUSTICE - ONTARIO
IN THE MATTER OF the Construction Act , RSO 1990, c C.30, as amended
RE: MICHAL BERNACH c.o.b. as INFINITE ELECTRIC, Plaintiff
- and - SUSAN MICHELLE MAKEPEACE aka SAM or SAMANTHA MAKEPEACE, Defendant
BEFORE: Master Todd Robinson
COUNSEL: G. Matushansky, for the defendant (moving party) M. Bernach, for himself
HEARD: February 17, 2021 (by videoconference)
REASONS FOR DECISION
[1] The defendant, Sam Makepeace, moves for orders discharging the lien of the plaintiff, Michal Bernach c.o.b. as Infinite Electric, dismissing the action, and returning security previously paid into court to vacate the lien. In the alternative, Ms. Makepeace seeks orders compelling answers to undertakings given at Mr. Bernach’s cross-examination pursuant to s. 40 of the Construction Act, RSO 1990, c C.30 and for security for costs. No case law supporting any of the relief sought has been put before me. Mr. Bernach opposes the motion. He has delivered no responding materials.
[2] For the reasons that follow, I grant the order sought compelling Mr. Bernach to answer the undertakings given during his s. 40 cross-examination, which he acknowledges have not been answered, but otherwise dismiss Ms. Makepeace’s motion.
Background
[3] Mr. Bernach’s lien relates to electrical services allegedly supplied to Ms. Makepeace’s property at 34 Castle Frank Road, Toronto. Ms. Makepeace verbally contracted with Mr. Bernach. Her evidence is that the contract was to perform electrical work at the property “as required from time to time” and that Mr. Bernach performed “miscellaneous work” between June 22 and October 17, 2018. Mr. Bernach’s evidence from his s. 40 cross-examination is inconsistent with Ms. Makepeace’s affidavit evidence. Mr. Bernach’s evidence was that he was contracted for a specific initial scope of electrical work, after which various changes and additions to the work were directed by Ms. Makepeace.
[4] It appears undisputed that Mr. Bernach did not perform any work at the property between October 17, 2018 and April 9, 2019, when Mr. Bernach attended the site. Ms. Makepeace’s evidence is that an invoice was issued on April 3, 2019 (dated January 3, 2019) for services performed between June 22 and October 17, 2018. There is no clear evidence of the nature or extent of any communications between the parties between October 17, 2018 and April 9, 2019. However, a series of text messages between July 23, 2018 and April 18, 2019 were made an exhibit to Mr. Bernach’s s. 40 cross-examination, although are not in evidence. There was accordingly some communication between the parties during that period.
[5] Evidence filed supports that Mr. Bernach obtained work orders in early April 2019 from both the Electrical Safety Authority (“ESA”) and Hydro One in advance of re-attending the property to perform further work on April 9, 2019. Upon Mr. Bernach attending, Ms. Makepeace’s evidence is that she instructed Mr. Bernach by telephone that no work was to be completed and that he would not be allowed to enter the property. Ms. Makepeace also contacted Hydro One to cancel the work order that Mr. Bernach had taken out. It appears that Mr. Bernach subsequently notified ESA that he was no longer on the job.
[6] On May 16, 2019, Mr. Bernach preserved his lien by registering a claim for lien against title to the property. This action was subsequently commenced and a certificate of action was registered against title. The timing of service is not in the record. Ms. Makepeace served her statement of defence and counterclaim on December 19, 2019. Mr. Bernach’s reply and defence to counterclaim was served on January 17, 2020. Bernach’s lien was vacated by order of Master Short dated February 25, 2020 upon posting security for the lien.
Analysis
[7] It is undisputed that, pursuant to s. 87.3 of the Construction Act, the provisions of the act as they read on June 29, 2018 (i.e., the provisions of the former Construction Lien Act) continue to apply to the subject improvement and, thereby, Mr. Bernach’s lien and lien action. References in these reasons are accordingly to the Construction Lien Act (the “CLA”).
Discharge of the lien
[8] Discharge of Mr. Bernach’s lien and dismissal of this action is sought on several bases, namely:
(a) that the lien was not preserved in time;
(b) that the lien and lien action are frivolous, vexatious and an abuse of process; and
(c) that Mr. Bernach has delayed in prosecuting his action, which has not been set down for trial within six months following the close of pleadings as contemplated by Rule 24.01(1)(c) of the Rules of Civil Procedure, RRO 1990, Reg 194.
[9] Motions to discharge liens have repeatedly been held to be akin to motions for summary judgment. On such a motion, the court assesses if there are any triable issues regarding the bases upon which a discharge is sought.
[10] With respect to timeliness, counsel for Ms. Makepeace argues that Mr. Bernach performed no lienable work in April 2019. Since Mr. Bernach’s last supply of services and materials was on October 17, 2018, it is argued that any lien rights expired 45 days thereafter and well before the lien was preserved on May 16, 2019. However, last supply is only relevant to assessing the timeliness of a subcontractor’s lien. It is undisputed that Mr. Bernach’s contract was with Ms. Makepeace. Since Ms. Makepeace is an “owner” pursuant to the CLA, Mr. Bernach is a “contractor” and, pursuant to s. 31(2) of the CLA, his lien rights expired at the conclusion of the 45-day period following the earlier of contract completion or abandonment.
[11] Ms. Makepeace’s affidavit evidence is that Mr. Bernach ceased attending the property after October 17, 2018, despite her repeated requests that he complete the electrical work. Her evidence is that he did not communicate with her again until April 2019, when he attempted to return to perform further work. Counsel argues that these support a finding that Mr. Bernach abandoned the project.
[12] In my view, whether the contract was abandoned in October 2018, as alleged, is a triable issue. Ms. Makepeace’s statements regarding lack of communication from Mr. Bernach and her “repeated requests” that he return to complete the work are uncorroborated by any contemporaneous records or other evidence, and appear inconsistent with the existence of text messages that were made an exhibit to Mr. Bernach’s cross-examination, but not tendered on this motion. Evidence also supports that Mr. Bernach did return in April 2019 with a view to performing further work, having arranged work orders with both Hydro One and the ESA in early April 2019. All of this appears to have been prior to Ms. Makepeace telling Mr. Bernach that no further work was to be completed and that he would not be given access to the property. During his s. 40 cross-examination, Mr. Bernach discussed the scope of work he was contracted to perform and confirmed that only rough-in work was completed, with basement electrical and finishing work incomplete.
[13] There is no cogent evidence of any termination before Ms. Makepeace’s direction that no further work was to occur in April 2019. Since, on the record before me, it is a triable issue whether the contract was abandoned before April 2019 and there is no evidence supporting completion prior to April 2019, timeliness of the lien also remains a triable issue.
[14] With respect to both the lien and lien action being frivolous, vexatious and an abuse of process, I am unable to make such a finding on the record before me. It lacks a sufficient evidentiary basis to support it. Significantly, the majority of Ms. Makepeace’s affidavit comprises unsubstantiated, general, and self-serving statements regarding abandonment of the work, that work claimed in the lien was not completed or was deficient, that liened work was in respect of another unidentified property, and regarding serious allegations of stalking, harassment and intimidation.
[15] Regarding the last of those items, Ms. Makepeace’s affidavit provides no particulars or details of any specific events of alleged harassment or intimidation, instead speaking only generally of Mr. Bernach having “attempted to contact me and harass me so that I settle”, making “persistent inappropriate attempts to contact me”, and a seemingly unfounded belief that an email from Mr. Bernach to Ms. Makepeace’s counsel stating, “Please discuss this with Ms. Makepeace as I know exactly what she is going through,” indicates that he “has been stalking [her] and is aware of [her] private personal affairs” and “was a further attempt to psychologically harm [her]”. While Ms. Makepeace may subjectively have felt intimidated or harassed, a finding of intentional or actual intimidation or harassment is not supported by the record. In particular, in my view, the text messages and emails tendered do not objectively suggest any improper, abusive or vexatious conduct by Mr. Bernach.
[16] Regarding the other allegations, there is no evidence from Ms. Makepeace on the scope of work actually performed or the nature and extent of alleged deficiencies. Mr. Bernach’s submissions have also convinced me that whether the lien includes amounts for work performed on the other property, as alleged by Ms. Makepeace, is a triable issue. I agree with Mr. Bernach that his answers on cross-examination do not confirm that the lien definitely includes amounts for any such work.
[17] With respect to alleged delay in the proceeding, the record does not support dismissal for delay. Rule 24.01(1)(c) permits a defendant to seek dismissal for delay by reason of a plaintiff failing to set an action down for trial within six months after the close of pleadings. However, I have previously held that Rule 24.01(1)(c) is inconsistent with the CLA and inapplicable in lien actions: Smith v. Hudson’s Bay Company, 2019 ONSC 2348 at para. 19 (erroneously referencing Rule 24.01(1)(c) as Rule 27.01(1)(c)). There are no prescribed procedural deadlines in the CLA for lien actions after close of pleadings until the two-year set down (or order for trial) requirement in s. 37. Documentary and oral discovery are interlocutory steps not expressly contemplated by the CLA, which require leave pursuant to s. 67(2). Ms. Makepeace has put no case law before me supporting discharge of a lien and dismissal of a lien action for delay within two years of perfection with pleadings closed, as is the case here. In the absence such case law, I do not accept Ms. Makepeace’s arguments that any “delay” in setting the action down for trial, when the time to comply with s. 37 has not yet expired, warrants discharge of the lien and dismissal of the action.
Outstanding undertakings
[18] Mr. Bernach acknowledges that he has not answered the undertakings given during his s. 40 cross-examination. He submits that he has not had the time to complete them. As alternative relief to discharge of the lien and dismissal of the action, Ms. Makepeace requests answers within 30 days, failing which the action should be dismissed. I find no basis to make an order for automatic or deemed dismissal. Mr. Bernach submits that he would be able to provide answers by the end of the week. I would prefer to fix a realistic deadline that hopefully avoids unnecessary further motions. Given the limited number of undertakings and the length of time that Mr. Bernach has had to fulfill them, two weeks is an appropriate deadline for the answers to be given.
Security for costs
[19] Ms. Makepeace relies on Rule 56.01(1)(e) of the Rules of Civil Procedure in seeking security for costs, namely that there is good reason to believe that the action is frivolous and vexatious and that Mr. Bernach has insufficient assets in Ontario to pay the costs of Ms. Makepeace. In my view, Ms. Makepeace has failed to meet her threshold onus in seeking security for costs.
[20] I have already determined that the record before me does not support a determination that the action is frivolous, vexatious, or an abuse of process. I am also unconvinced that the record supports “good reason to believe” that the action is such. Moreover, the totality of evidence tendered supporting “good reason to believe” that Mr. Bernach lacks sufficient assets in Ontario to satisfy a costs award is one sentence in Ms. Makepeace’s affidavit. It states, “I believe Infinite Electric has insufficient assets to pay my costs as it was unable to continue retaining counsel and has taken no steps to advance the litigation.” This is nothing more than supposition based on an unsubstantiated suspicion that lack of finances was Mr. Bernach’s reason for electing to represent himself and not having taken steps since the close of pleadings. It is not good reason to believe that Mr. Bernach lacks sufficient assets.
Disposition
[21] For the foregoing reasons, Ms. Makepeace is entitled to an order compelling answers to the undertakings from Mr. Bernach’s cross-examination, but has not satisfied her evidentiary onuses to obtain the orders she has sought to discharge the lien, to dismiss the action, or for security for costs.
Costs
[22] At the conclusion of argument, Mr. Bernach confirmed he would not be seeking any costs if he was successful in opposing the motion. Ms. Makepeace submitted a costs outline supporting costs of $3,276.00 on a partial indemnity basis, reflecting actual costs of $5,460.00. Given Mr. Bernach’s position on costs and the result, I have determined that costs submissions are not necessary or proportionate.
[23] Section 86 of the CLA and Rule 57.01 of the Rules of Civil Procedure afford broad discretion to fashion a costs award that the court deems fit and just in the circumstances. Costs awards should reflect what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties rather than any exact measure of the actual costs to the successful litigant: Zesta Engineering Ltd. v. Cloutier at para. 4; Davies v. Clarington (Municipality), 2009 ONCA 722 at para. 52. The overall objective is fixing an amount that is fair and reasonable in the particular proceeding, having regard to the expectations of the parties concerning the quantum of costs: Boucher v. Public Accountants Council for the Province of Ontario (2004) at paras. 26 and 38.
[24] Ms. Makepeace has been successful in obtaining an order compelling answers to undertakings, but the balance of her motion was entirely unsuccessful. The evidentiary record submitted by Ms. Makepeace in support of her motion was sparse, one-sided and self-serving. No relevant case law was tendered in support of her position. Also, despite having Mr. Bernach’s evidence on the contract work performed from his s. 40 cross-examination, Ms. Makepeace elected not to respond to Mr. Bernach’s evidence, and further elected to tender no cogent substantiation of her serious allegations of stalking, harassment, and intimidation. During submissions, counsel urged me to view her statements in context of the factual circumstances, but the affidavit evidence provides no context in which to assess the reasonableness of Ms. Makepeace’s view and belief that she was being harassed and intimidated. These were serious allegations for which Ms. Makepeace failed to demonstrate any foundation.
[25] Nevertheless, the motion was apparently necessary to compel answers to long-outstanding undertakings. Mr. Bernach’s only excuse for failing to answer his undertakings was that he was too busy. In all the circumstances, I find that Ms. Makepeace is entitled to some costs. In my view, the fair and reasonable amount of costs payable by Mr. Bernach to Ms. Makepeace in respect of the successful portion of this motion is $750.00, inclusive of HST, on a partial indemnity basis, payable within thirty (30) days.
Order
[26] For the foregoing reasons, I accordingly order as follows:
(a) Mr. Bernach shall provide answers to his outstanding undertakings given during his cross-examination on November 6, 2019 within fourteen (14) days of release of these reasons.
(b) The balance of Ms. Makepeace’s motion is dismissed.
(c) Mr. Bernach shall pay to Ms. Makepeace costs of this motion fixed in the amount of $750.00, inclusive of HST, and payable within 30 days.
(d) This order is effective without further formality.
MASTER TODD ROBINSON DATE: February 19, 2021