Court File and Parties

COURT FILE NO.: CV-23-707931 DATE: 2023 10 18

SUPERIOR COURT OF JUSTICE - ONTARIO

IN THE MATTER OF the Construction Act, RSO 1990, c C.30, as amended

RE: MOBILINX HURONTARIO CONTRACTOR, an unincorporated joint venture comprised of AMICO INFRASTRUCTURES INC. ASTALDI CANADA DESIGN & CONSTRUCTION INC., WEBUILD-CIVIL WORKS INC., and BOT INFRASTRUCTURE LTD., Subcontractor

- and -

EDGE1 EQUIPMENT RENTALS INC., Lien Claimant

BEFORE: Associate Justice Todd Robinson

COUNSEL: J. Strub, for the subcontractor (moving party)

HEARD: In writing

Endorsement

[1] Mobilinx Hurontario Contractor (“Mobilinx”) moves for an order declaring the lien of Edge1 Equipment Rentals Inc. (“Edge1”) expired pursuant to s. 45 of the Construction Act. Mobilinx seeks an order on the basis that Edge1’s lien, which was preserved by giving a claim for lien, was preserved out of time.

[2] This motion raises an important practice point on the different evidentiary requirements for an ex parte motion to vacate a lien under s. 44 and an ex parte motion to declare a lien expired under s. 45. That distinction is material in this case.

[3] For the reasons that follow, I am dismissing the motion without prejudice to moving again on further and better evidence or on notice to Edge1.

Analysis

[4] Mobilinx position is that the Construction Act as it read on June 29, 2018, i.e., the former Construction Lien Act (the “CLA”), continues to apply to the subject improvement by operation of s. 87.3(1)(b) of the Construction Act. In support of the motion, Mobilinx has tendered the affidavit of a law clerk. The law clerk’s affidavit relies on two main bases to support that the CLA continues to apply, namely:

(a) I accepted that the CLA continued to apply in a prior motion brought by Mobilinx to vacate another lien; and

(b) documents obtained from Infrastructure Ontario’s website support that a procurement process for the project was commenced in October 2016.

Relevant Law

[5] The CLA was substantively amended on July 1, 2018, with further amendments on October 1, 2019. Section 87.3 of the Construction Act governs which version of the act applies to an “improvement” as defined in the legislation. For the purposes of this motion, s. 87.3(1)(b) is the operative transition position relied upon by Mobilinx. That subsection provides that the CLA continues to apply with respect to an improvement if “a procurement process for the improvement was commenced before July 1, 2018 by the owner of the premises.”

[6] Subsection 1(4) of the Construction Act is also relevant. It provides that a procurement process is commenced on the earliest of the making of (a) a request for qualifications, (b) a request for quotation, (c) a request for proposals, or (d) a call for tenders.

[7] Mobilinx moves under s. 45 of the Construction Act. The language of the section has not been amended. It provides as follows:

45 (1) Where a lien that attaches to the premises is not preserved or is not perfected within the time allowed for doing so under section 31 or 36, the court upon,

(a) the motion of any person without notice to any other person;

(b) proof that the lien has not been preserved or perfected within the time allowed; and

(c) production of,

(i) a certificate of search under the Land Titles Act, or

(ii) a registrar’s abstract under the Registry Act,

together with a certified copy of the claim for lien,

shall declare that the lien has expired and order that the registration of the claim for lien be vacated.

(2) Where the court is satisfied that a lien that does not attach to the premises has not been preserved or perfected within the time allowed for doing so under section 31 or 36, the court upon the motion of any person without notice to any other person shall declare that the lien has expired.

[8] A person or party that moves to declare a lien expired under s. 45 has a high evidentiary onus. Evidence on a motion to declare a lien expired must satisfy the court that no additional evidence or argument from the absent lien claimant would reasonably make a difference in disposition of the motion. That is required because the lien claimant has no opportunity to file responding materials or argue against the relief sought. The evidence filed by the moving party must support a clear finding that the subject lien has expired: Davis v. Under Construction Incorporated, 2020 ONSC 3466 at paras. 5-6.

Prior Vacating Motion

[9] The motion materials include my endorsement from a previous ex parte motion brought by Mobilinx to vacate a lien by Steconfer York Joint Venture. In my brief endorsement from that motion, I stated, in part, as follows:

The evidence tendered supports that a procurement process for the subject improvement was commenced prior to July 1, 2018. I am satisfied that the Construction Act as it read on June 29, 2018 thereby continues to apply and, in particular, the former s. 44.

[10] Nothing more than the endorsement has been put before me. The motion record does not include a copy of the motion materials for the prior motion or information on Steconfer York Joint Venture’s lien. It is unclear to me if the lien arises from the same improvement or not. Regardless, even if it does, my prior endorsement does not assist Mobilinx.

[11] The evidentiary requirements for an ex parte motion brought under s. 45 are not the same as the evidentiary requirements for an ex parte motion brought under s. 44. A motion under s. 44 is brought essentially to change the security for a lien. As set out in s. 44(6), upon a vacating order being made, the lien ceases to attach to the premises and the holdbacks and other amounts subject to a charge under the act and instead becomes a charge against the security for the lien. In my view, a vacating motion seeks interlocutory relief that does not prejudice an absent lien claimant. A lien provides a form of security interest in the improved premises or against holdbacks required to be retained under the Construction Act. On a vacating motion, that security interest is essentially swapped for another form of security. No determinations are made on the validity of the lien.

[12] A motion under s. 45 is not the same. It is a motion seeking a final order. A declaration that a lien has expired is irrevocable. Case law has consistently held that an expired lien cannot be revived. That is the genesis of the high evidentiary onus on a moving party when moving ex parte for a declaration that a lien has expired.

[13] Ex parte motions to vacate liens do, from time to time, engage s. 87.3 of the Construction Act. When that occurs, the court (whether judge or associate judge) must decide if the lower security required by the CLA is sufficient based on the record. If the moving party’s evidence is accepted, though, that is not an end to the transition issue. Generally, there is no legal submissions or argument on vacating motions. In Toronto Region, they are currently only heard in writing. It follows that a decision on an ex parte vacating motion must be viewed in that context.

[14] Whether or not any endorsement expressly says it (and my prior endorsement did not), any decision under s. 87.3 on a vacating motion must reasonably be restricted to the purposes of that motion. To view it otherwise raises serious concerns about the ability of one party, in an ex parte context, to obtain an order that impacts not only the lien rights of all lien claimants on a project, but also the availability and applicability of a plethora of other rights, obligations, and remedies under the Construction Act that were added or amended in 2018 and 2019.

[15] Decisions on ex parte vacating motions about the transition provisions are not binding. They are interlocutory motions that are not intended to definitely resolve rights. For example, an aggrieved lien claimant who had no notice of the motion and feels there is insufficient security would be entitled to move to require that additional security be posted. Precisely because no rights are being finally determined, the evidentiary threshold on an ex parte vacating motion is lower than it is on an ex parte s. 45 motion.

[16] In my view, accepting security equal to what would have been provided under the CLA is more in line with an order under s. 44(2). That subsection provides that “the court may make an order vacating the registration of a claim for lien, and any certificate of action in respect of that lien, upon the payment into court or the posting of security of an amount that the court determines to be reasonable in the circumstances to satisfy the lien.”

[17] Accordingly, apart from the lack of any correlation between the prior vacating motion and the subject improvement, I would give no effect to the suggestion that I have already decided which version of the act applies to the subject improvement. In my view, my prior decision is not a final determination on the transition provisions for this improvement.

Evidence on Procurement Process

[18] Mobilinx’s evidence is that the procurement process for the improvement commenced by a request for qualifications on October 18, 2016, which was followed by a request for proposals on August 17, 2017. Based on the extracted first page of the project agreement in the materials, the prime contract was not entered into until October 1, 2019.

[19] To find that Edge1’s lien has clearly expired, I must be satisfied that the procurement process for the improvement from which Edge1’s lien arises was commenced prior to July 1, 2018. In my view, the evidence tendered is insufficient to meet the high evidentiary burden on Mobilinx.

[20] As stated expressly in the law clerk’s affidavit, the evidence dealing with procurement has been sworn entirely on information and belief based on a review of Infrastructure Ontario’s website for the “Hazel McCallion Line (Hurontario LRT)” project. Various information has been extracted from the website and included as exhibits. On its face, the evidence does tend to support that the procurement process was commenced prior to July 1, 2018.

[21] My concern is that the evidence amounts to unverifiable hearsay for which no argument has been advanced on the reliability of the evidence. Firstly, the law clerk has no personal knowledge of any of the information obtained from the website. Her reliance on it is hearsay. Secondly, the website is itself a form of hearsay evidence. Tendered by the law clerk, the evidence is at least double hearsay. Hearsay in an affidavit is permissible if there is compliance with the hearsay exemption in subrule 39.01(4) of the Rules of Civil Procedure, RRO 1990, Reg 194, but the Court of Appeal has held that double hearsay does not comply with that exemption: Airst v. Airst, [1999] OJ No 5866 (CA) at para 6.

[22] No factum has been tendered. I accordingly have no legal argument on why I should accept that the information from Infrastructure Ontario’s website is reliable or subject to a hearsay exception. No evidence has been tendered from those who would reasonably have direct evidence on the timing of the procurement process, such as representatives of Infrastructure Ontario, Metrolinx, Mobilinx Hurontario General Partnership (the Project Co for the subject project), or even Mobilinx itself. Notably, some of Mobilinx’s joint venture partners appear to be related entities to partner entities comprising Project Co.

[23] A decision on the transition provisions for this improvement in the context of this motion is significant. It is not interlocutory in nature, like a vacating motion. I am being asked to finally dispose of Edge1’s lien rights, but in the absence of Edge1 having any opportunity to argue which version of the act applies and the timeliness of its lien. Before finding on an ex parte basis that the CLA clearly continues to apply to the improvement, I must be satisfied that the record contains properly admissible and reliable evidence on the timing of procurement and, further, that the evidence is not reasonably challengeable by Edge1 if given the opportunity to respond. That is particularly necessary in this case, since the record supports that the project agreement was not entered until after July 1, 2018. I am not satisfied from the evidence tendered.

[24] In addition, I am concerned that the materials do not squarely connect Edge1’s lien to the subject improvement. The law clerk says that Edge1 is a subcontractor to Mobilinx’s subcontractor, Controlled Demolition Group Inc. She says that Edge1 and Controlled Demolition Group Inc. entered into a subcontract. She does not say how she knows any of that. Since it is not something reasonably within her personal knowledge, it is unattributed hearsay.

[25] The law clerk also states that Edge1’s lien is “in respect of the Project”, but again does not say how she knows that. The claim for lien indicates that it relates to the “Port Credit LRT Station” and includes a legal property description. There is no evidence clearly connecting the liened premises to the Hazel McCallion Line (Hurontario LRT) project. I am not prepared to take judicial notice that the lien against “Port Credit LRT Station” must be in respect of the same improvement that was allegedly subject to the procurement process. In my view, there must be direct evidence on that point.

Disposition

[26] For the above reasons, Mobilinx’s motion is dismissed. The dismissal is without prejudice to moving again on further and better evidence clearly supporting that procurement for the improvement commenced prior to July 1, 2018 and that Edge1’s lien is in respect of a portion of that improvement. Alternatively, the motion may be brought on notice to Edge1.

Date: October 18, 2023 ASSOCIATE JUSTICE TODD ROBINSON