COURT OF APPEAL FOR ONTARIO
CITATION: Hamilton (City) v. Thier + Curran Architects Inc., 2015 ONCA 64
DATE: 20150202
DOCKET: C58419 & C58427
Strathy C.J.O., Laskin and Brown JJ.A.
BETWEEN
C58419
City of Hamilton
Plaintiff
and
Thier + Curran Architects Inc.
Defendant (Appellant)
and
Urban Mechanical Contracting Ltd., Tricin Electric Ltd.
Third Parties (Respondents)
and
The Atlas Corporation, MHPM Project Managers and H.H. Angus and Associates Limited
Third Parties
BETWEEN
C58427
The Atlas Corporation
Plaintiff
and
Thier + Curran Architects Inc.
Defendant (Appellant)
and
Urban Mechanical Contracting Ltd., Tricin Electric Ltd.
Third Parties (Respondents)
and
The City of Hamilton, MHPM Project Managers and H.H. Angus and Associates Limited
Third Parties
P. John Brunner, for the appellant
Emilio Bisceglia, for the respondents
Heard: January 8, 2015
On appeal from the orders of Justice Alan C. R. Whitten of the Superior Court of Justice, dated January 30, 2014.
Brown J.A.:
Overview
[1] Difficulties encountered in the reconstruction and redevelopment of the Wentworth Lodge in Hamilton between 2006 and 2008 spawned several pieces of litigation, two of which are the subject of these appeals. The project owner, The City of Hamilton, and the general contractor, The Atlas Corporation, have asserted claims against the project’s architect, the appellant, Thier + Curran Architects Inc. (“TCA”). In turn, TCA commenced Third Party Claims seeking contribution and indemnity against the project’s mechanical sub-contractor, Urban Mechanical Contracting Ltd., and its electrical sub-contractor, Tricin Electric Ltd.
[2] Urban and Tricin successfully moved for summary judgment, and by orders dated January 30, 2014 (the “Orders”) the motion judge dismissed TCA’s Third Party Claims. TCA appeals those Orders.
[3] For the reasons that follow, I would allow the appeals. In my view, the issues in the third party claims are inextricably linked to the issues in the main actions, and summary judgment did not permit a fair and just determination of the Third Party Claims on their merits.
The legal proceedings concerning the project
[4] A brief overview of the various actions is in order. Significant delays accompanied the project. Who should bear responsibility for the costs of those delays is one of the issues lying at the heart of the various actions. The motion judge had case managed the actions since 2010. In late 2013, he made a case management order establishing the sequence for the trial of three groups of claims concerning the project (the “Trial Sequencing Order”).
[5] The first group of proceedings consisted of actions brought by the sub-trades, Urban and Tricin, seeking payment. Each sub-trade brought an action under the Construction Lien Act[^1] against the City and Atlas, as well as one against the bonding company, Aviva Insurance Company of Canada, Atlas and the City. Under the Trial Sequencing Order, the claims of Urban and Tricin are to proceed first to trial, with the trial scheduled to commence this March.
[6] Next, Atlas commenced an action against the City under the Construction Lien Act seeking payment. Under the Trial Scheduling Order, the Atlas lien claim will be tried after the lien claims of the two sub-trades.
[7] Instead of issuing a Third Party Claim against TCA in the Atlas action, the City commenced a separate action seeking contribution and indemnity from TCA for any amounts it might be found liable to pay Atlas or the sub-trades. In the City’s action, TCA issued a Third Party Claim against Urban, Tricin and others, seeking contribution and indemnity for any damages or costs for which TCA might be found liable to the City in respect of the City’s liability to Atlas.
[8] Finally, Atlas commenced an action against TCA in which it asserted a claim in negligence alleging that TCA’s failure to perform its work properly had caused Atlas delays and additional costs to complete the project. In that action, TCA issued a Third Party Claim against Urban, Tricin and others seeking contribution and indemnity with respect to any damages and costs for which TCA might be found liable to Atlas.
[9] Neither Urban nor Tricin defended the main actions in respect of which TCA issued Third Party Claims.
[10] Under the Trial Sequencing Order, the actions by the City and Atlas against TCA will proceed to trial last.
The decision of the motion judge
[11] The summary judgment motion of Urban and Tricin was supported by short affidavits, which attached brief extracts from the examination for discovery of the TCA representative, Bill Curran, who testified that Urban and Tricin had done excellent jobs on the project, Tricin had done its job appropriately and Tricin had not been negligent.
[12] In response, TCA filed an affidavit from Curran, which explained the context in which he had given his answers on discovery. In his affidavit Curran also contended that evidence existed which showed Urban and Tricin had been responsible in part for the damages claimed by Atlas.
[13] TCA also adduced an affidavit from a professional engineer, David Mellett, which appended and summarized expert reports filed in the several proceedings by the City, Atlas, Urban and Tricin. Mellett observed that no consensus existed among the experts about the causes of the delay to the project. Although it was not possible to apportion responsibility for the delay with precision, Mellett stated it was possible that Urban and Tricin ultimately might be found to have contributed to the project’s delays.
[14] In an oral ruling the motion judge concluded that no genuine issue requiring a trial of the Third Party Claims against Urban and Tricin existed:
To talk in terms of potentialities makes a litigation process on a go-forward basis extremely tenuous. Obviously, anything has potential. But this is not a firm evidentiary basis for liability, however claimed. In fact, it is tantamount to a case based on opinion versus that of facts. The interests of justice for the subs requires that they know the case to be met and that requires a factual basis beyond that of mere pleadings. Pleadings are not facts. The evidence, if you can call it that, of the basis of the action against the subs, is so tenuous that there is no genuine issue for trial. No one should have to go to trial because of an opinion based on other opinions of “potentiality.”
[15] The motion judge continued by acknowledging that notwithstanding his dismissal of TCA’s Third Party Claims against the two sub-trades, the issue of their responsibility for the project’s delay would remain a live one for adjudication in the remaining proceedings:
As it is, delay will still be dealt within the various claims for lien and counter-actions. There is no indication that in the fact-finding process, the Architects would end up being responsible for delays occasioned by the subs. There is absolutely no evidence of that possibility and, hence, contribution and indemnity becomes moot.
Standard of review
[16] In Hryniak v. Mauldin, the Supreme Court of Canada held that absent an error of law, the exercise of powers by a motion judge under Rule 20 of the Rules of Civil Procedure attracts deference. Whether a genuine issue requiring a trial exists is a question of mixed fact and law. Where there is no extricable error in principle, findings of mixed fact and law should not be overturned, absent palpable and overriding error.[^2]
Analysis
[17] While TCA raised several grounds of appeal, a single ground is dispositive of the appeal: did the motion judge err in dismissing the Third Party Claims when genuine issues requiring a trial existed as to whether the two sub-trades were directly liable to the general contractor, Atlas, and to the City, issues which in turn necessitated a trial with respect to TCA’s claims for contribution and indemnity?
[18] Summary judgment is available in the case of third party claims. Rule 20.09 of the Rules of Civil Procedure so provides, and in Bongiardina v. York (Regional Municipality) this court observed that nothing in Rule 20 suggested that third party claims were to be considered on a different footing from the main action.[^3] That said, in Bongiardina this court issued a caveat:
[15] There might well be cases in which it would be inappropriate to bring a motion for summary judgment in respect of a third party claim. For example, if the third party claim could not be resolved without detailed knowledge of the factual circumstances that gave rise to the main action, a motion for summary judgment would be premature.
[19] Earlier, in Ese Sports Co. v. Continental Insurance Co., Sharpe J., as he then was, described the situation in which defendants in actions involving third party claims often find themselves: they are caught in the middle between the plaintiff and the third party, with a defendant really only knowing whether it has a claim against a third party for contribution and indemnity when it learns whether it has successfully defended the main action. That situation poses a tactical difficulty for the defendant: it would hardly be in its interests to show a powerful case of wrong-doing against the third party on a motion for summary judgment when that would only go to bolster the case of the plaintiff against it in the main action.[^4]
[20] In the present case, notwithstanding the dismissal of the TCA Third Party Claims against Urban and Tricin by the motion judge, the issue of what responsibility, if any, Urban and Tricin may bear for project delays remains a live issue for the trial of the lien claims and related actions scheduled to commence this March. That results from the positions taken by the City and Atlas in their defences to the claims advanced against them by Urban and Tricin in their Construction Lien Act and bondholder actions. In its statements of defence in those actions, the City has alleged that Urban and Tricin caused or contributed to many of the delays and costs of the project.[^5] Atlas, in its statements of defence, alleged that Urban and Tricin breached their sub-contracts by failing to adhere to the construction schedule, failing to provide sufficient numbers of qualified workers to complete its work properly and causing a number of the delays on the project.[^6] Consequently, the summary judgments granted by the motion judge did not resolve the issue of the responsibility of the two sub-trades for any construction delays.
[21] Nor was that issue resolved by the admissions made by Curran on his examination for discovery, as was submitted by Urban and Tricin. Those third parties did not file any other evidence on the summary judgment motions. By contrast, TCA filed an affidavit from Curran explaining that he had given his discovery answers before the parties to the various actions had delivered their expert reports. TCA also filed an affidavit from Mallet attaching those expert reports and summarizing the experts’ opinions. That evidence from Curran and Mellet highlighted how the delay issue in the Third Party Claims was closely interconnected with the delay issue in the main actions.
[22] As this Court stated in Baywood Homes Partnership v. Haditaghi, a summary judgment motion judge commits an error in principle when he or she fails to assess the advisability of the summary judgment process in the context of the litigation as a whole.[^7] In Hryniak, the Supreme Court of Canada emphasized the need to assess the appropriateness of granting summary judgment where the dismissal of a claim against one defendant would still see the claim proceed to trial in any event against other defendants; granting partial summary judgment in such circumstances would risk creating duplicative proceedings or inconsistent findings of fact.[^8]
[23] In my respectful view, the motion judge committed such an error in principle by granting summary judgment dismissing the Third Party Claims of TCA against Urban and Tricin. In his reasons, the motion judge acknowledged that dismissing the Third Party Claims would not put to rest the issue of any responsibility Urban and Tricin might bear for the construction delays at the project: “delay will still be dealt within the various claims for lien and counter-actions.” The granting of summary judgment dismissing the Third Party Claims creates a risk of inconsistent findings of fact concerning the responsibility of Urban and Tricin for any construction delays. Given that risk, it was an error in principle for the motion judge to view the dismissal of the TCA Third Party Claims as a proportionate means to achieve a just result. The facts concerning the delay issues advanced in the TCA Third Party Claims are too closely intertwined with the facts about delay raised in the main actions involving the Wentworth Lodge project to permit the granting of summary judgment dismissing the Third Party Claims before the main actions have been tried.
DISPOSITION
[24] For those reasons, I would allow the appeals and set aside the Orders granting summary judgment dismissing the TCA Third Party Claims.
[25] The motion judge did not fix the costs of the summary judgment motion. TCA sought its costs of the motion on a partial indemnity scale in the amount of $22,382.57, all-in, and its costs of the appeal in the amount of $27,476.46. The respondents submitted that $7,500 was a more appropriate amount for the costs of the appeal.
[26] Given the disposition of the appeals, I would remit the issue of the costs of the summary judgment motion to the motion judge for determination. I would order costs of the appeal in the amount of $7,500.00, all inclusive.
Released: February 2, 2015 (GS)
“David Brown J.A.”
“I agree G.R. Strathy C.J.O.”
“I agree John Laskin J.A.”
[^1]: R.S.O. 1990, c. C.30. [^2]: 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 81. [^3]: (2000), 2000 CanLII 5408 (ON CA), 49 O.R. (3d) 641 (C.A.), at para. 14. [^4]: (1995), 1995 CanLII 19512 (ON CJ), 31 C.C.L.I. (2d) 184 (Ont. Gen. Div.), at paras. 6 to 8. [^5]: City Statement of Defence and Crossclaim in the Urban CLA action, at para. 15; City Statement of Defence and Crossclaim in Tricin CLA action, at para. 15; and City Statement of Defence and Crossclaim in Tricin bondholder action, at para. 15. [^6]: Atlas Statement of Defence and Crossclaim in the Urban bondholder action, at para. 14; Atlas Statement of Defence and Crossclaim in the Urban CLA action, at para. 8; Atlas Statement of Defence and Crossclaim in Tricin CLA action, at para. 8; and Atlas Statement of Defence, Counterclaim and Crossclaim in the Tricin bondholder action, at para. 17. [^7]: 2014 ONCA 450, 120 O.R. (3d) 438, at para. 33 [^8]: Hryniak, at para. 60.