Villa Verde L.M. Masonry Ltd. v. Pier One Masonry Inc. et al.

[Indexed as: Villa Verde L.M. Masonry Ltd. v. Pier One Masonry Inc.]

54 O.R. (3d) 76

[2001] O.J. No. 1605

Docket Nos. M2696 (C30598, C30599, C30600 and C30601)

Court of Appeal for Ontario,

Charron, Rosenberg and Goudge JJ.A.

May 2, 2001

Construction liens--Appeals--Lien claim--Claim for breach of trust--Judgment concerning claim for lien or for breach of trust--Judgment not involving other types of claim--Appeal to the Divisional Court--Construction Lien Act, R.S.O. 1990, c. C.30, s. 71.

Where a judgment concerns claims only under the Construction Lien Act, which claims may include a lien claim under Part III of the Act or a breach of trust claim under Part II of the Act, the appeal is to the Divisional Court and not to the Court of Appeal for Ontario.

MOTION under s. 110 of the Courts of Justice Act, R.S.O. 1990, c. C.30, s. 110.

Cases referred to Bird Construction Co. v. C.S. Yachts Ltd. (1990), 38 O.A.C. 147, 37 C.L.R. 225 (C.A.); Durall Construction Ltd. v. W.A. McDougall Ltd. (1979), 1979 CanLII 1700 (ON CA), 25 O.R. (2d) 371 (C.A.); McCorkell v. Ontario Lottery Corp. (1992), 1992 CanLII 7444 (ON SC), 8 O.R. (3d) 1, 90 D.L.R. (4th) 276 (Div. Ct.)

Statutes referred to Business Corporations Act, R.S.O. 1990, c. B.16, s. 255 Construction Lien Act, R.S.O. 1990, c. C.30, ss. 13, 50(2), 71(1) Construction Lien Act, 1983, S.O. 1983, c. 6, s. 73(1) Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 6(2), 110 Mechanics' Lien Act, R.S.O. 1970, c. 267, s. 43

George R. Cunningham, for respondent. Douglas G. Christie and Hagit M. Genossar, for appellants.

The judgment of the court was delivered by

[1] ROSENBERG J.A.:-- This is a motion under s. 110 of the Courts of Justice Act, R.S.O. 1990, c. C.43 to transfer four appeals to the Divisional Court. The issue underlying this motion is whether appeals under the Construction Lien Act, R.S.O. 1990, c. C.30 are to be brought in this court or in the Divisional Court. For the reasons that follow, it is my view that an appeal involving only proceedings under the Construction Lien Act is to be brought in the Divisional Court. Accordingly, I would grant the motion and transfer the appeals and cross-appeals by the respondents to the Divisional Court.

The Background

[2] This motion has its origin in a motion for directions that I heard in December of last year. At that time, counsel were seeking a way to have a number of appeals and cross- appeals heard at the same time in the same court. The goal was a laudable one, being an attempt to save expense and avoid conflicting results. In the result, I held that as a single judge I had no jurisdiction to give the directions because it appeared to me that this court had no jurisdiction to deal with any of the appeals and cross-appeals. I invited counsel to bring a motion before a panel of this court to determine the jurisdictional issue.

[3] The appeals and cross-appeals arise out of judgments delivered by Hoilett J. in respect of claims based on the Construction Lien Act. The trial before Hoilett J. concerned four proceedings. Two proceedings were brought by the respondent Villa Verde L.M. Masonry Ltd. One of Villa Verde's proceedings concerned the validity of a lien claim under Part III of the Act. The other proceeding concerned allegations of breach of trust principally founded in Part II of the Act. The other two proceedings were brought by Kasanova Masonry Ltd. and Midnight Masonry Ltd. These proceedings concern only a breach of trust and not lien claims.

[4] Section 50(2) of the Construction Lien Act provides that "a trust claim shall not be joined with a lien claim but may be brought in any court of competent jurisdiction." Nevertheless, Master Peterson ordered that all four proceedings be "consolidated, or heard at the same time, or heard one immediately after the other at Toronto, subject to the discretion of the Trial Judge . . .". Counsel informed us that this is not an unusual order, at least in Toronto. To comply with s. 50(2), evidence was first heard on Villa Verde's lien action and then evidence was called with respect to the breach of trust claims. Hoilett J. issued one set of reasons dealing with all of the claims. There are three judgments, one for each plaintiff. The judgment in the Villa Verde proceedings deals with the lien and trust claims. The plaintiffs obtained almost complete success. The cross-appeals concern the trial judge's determination that one of the individuals, Stanley Leibel, was not liable for breach of trust.

[5] The principal reason for this motion is that counsel were of the view that the Act provides different appeal routes for the lien and trust claims. It appears that traditionally, appeals concerning lien claims under Part III have gone to the Divisional Court while appeals concerning trust claims under Part II have come to this court. The Act contains its own appeal provision. Section 71(1) provides as follows:

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.

[6] As a result, the trust fund claims were appealed to this court, while the lien action was appealed to the Divisional Court. Out of an abundance of caution, the appellants also appealed the lien action to this court.

Analysis

[7] In my view, s. 71(1) of the Act applies to appeals concerning lien claims under Part III as well as appeals concerning trust claims under Part II of the Act. I can see no basis for giving the word "judgment" a restrictive meaning so that it relates only to a judgment on a lien claim. There is nothing in the Construction Lien Act that suggests such an unusual interpretation. The decision of this court in Bird Construction Co. v. C.S. Yachts Ltd. (1990), 30 O.A.C. 147, 37 C.L.R. 225 is of some assistance in resolving this issue. The issue in Bird Construction arose out of an ex parte order under the Construction Lien Act, 1983, S.O. 1983, c. 6 declaring that the plaintiff's claim for a lien had expired, vacating the certificate of action and dismissing the action. The plaintiff moved before West J. to set aside the ex parte order. He dismissed the motion and confirmed the earlier order. This court held that although this was a final order, the appeal lay to the Divisional Court under s. 73(1) of the 1983 Act, which is identical to s. 71(1) of the current Act. The court held, at p. 227 C.L.R., that the order of West J. "constitutes a judgment under the Act, notwithstanding the fact that it is referred to as an order, and notwithstanding the fact that it was made without a trial having taken place".

[8] The court went on to hold that the reasons of Arnup J.A. in Durall Construction Ltd. v. W.A. McDougall Ltd. (1979), 1979 CanLII 1700 (ON CA), 25 O.R. (2d) 371 at pp. 373-74 (C.A.), interpreting the word "judgment" in the former Mechanics' Lien Act, R.S.O. 1970, c. 267, s. 43, could apply to the Construction Lien Act. Arnup J.A. held as follows:

In our view the word "judgment" in s. 43(1) of the Mechanics' Lien Act applies to any decision by the appropriate Judge or Master by which the rights of a party to the mechanics' lien proceedings are finally disposed of, and that the matter is not to be tested by the name which is given to that disposition nor by the terminology within it. . . . the substance of the disposition sought to be appealed is what governs.

(Emphasis added)

[9] The court in Bird Construction further held that the appeal provision in the Act, being a provision under a special act dealing with construction liens, takes precedence over the appeal provisions in the Courts of Justice Act, which is a general act dealing with appeals from the final order of [a] superior court judge. The appeal therefore lay to the Divisional Court. Admittedly, the decision in Bird Construction concerned a lien claim, not a trust claim. However, it is my view that the broad interpretation of "judgment" adopted in that case should apply to judgments arising out of trust claims.

[10] In his very helpful argument, Mr. Christie suggested that the reason appeals concerning trust claims have traditionally come to this court is that they are often joined with non-statutory causes of actions. Thus, this court may have taken jurisdiction under s. 6(2) of the Courts of Justice Act. Section 6(2) provides that the Court of Appeal has jurisdiction to hear and determine an appeal that lies to the Divisional Court "if an appeal in the same proceeding lies to and is taken to the Court of Appeal". All counsel were satisfied that s. 6(2) had no application to these proceedings. Hence, it is clear that the appeals in this case should therefore be transferred to the Divisional Court.

[11] There is also a cross-appeal in the Villa Verde matter against the trial judge's decision that Stanley Leibel was not personally liable under the Construction Lien Act. As I read the notice of cross-appeal, the only issue raised concerns the application of s. 13 of the Construction Lien Act. Accordingly, the cross-appeal also lies to the Divisional Court. At trial, it appears that the plaintiffs also relied on the Ontario Business Corporations Act, R.S.O. 1990, c. B.16. However, as counsel conceded, to the extent that an issue arises under that Act, the appeal route also lies to the Divisional Court in accordance with s. 255 of that Act. Accordingly, I am satisfied that the cross-appeal should be transferred to the Divisional Court.

[12] In their factum, the respondents suggest that this court could take jurisdiction in the lien and trust claims by constituting itself as the Divisional Court as was done in McCorkell v. Ontario Lottery Corp. (1992), 1992 CanLII 7444 (ON SC), 8 O.R. (3d) 1, 90 D.L.R. (4th) 276 (Div. Ct.). However, this is rarely done. It is an option that is generally only resorted to where the jurisdictional issue is noticed after the appeal has been argued and is done to save the parties the expense and inconvenience of having to re-argue the appeal. I can see no reason for adopting such a procedure in this case.

Disposition

[13] Accordingly, I would grant the motion and transfer the appeals and cross-appeal to the Divisional Court. There will be no order for costs of this motion. At the hearing, counsel sought directions from this court concerning preparation of the appeal and expediting the appeal. Since this court has no jurisdiction to deal with the appeals, application for those directions will have to be made in the Divisional Court.

Order accordingly.