Court of Appeal for Ontario

Date: 2026-02-09 Docket: M56557 (COA-25-CV-1345)

Monahan J.A. (Motion Judge)

Between

Castle Homes Design Inc. Plaintiff (Appellant/Moving Party)

and

Deborah McKenzie a.k.a. Deborah White*, Canadian Imperial Bank of Commerce, and CIBC Mortgages Inc. Defendants (Respondent*/Responding Party*)

Tim Gleason and Megan Phyper, for the moving party

N. Joan Kasozi and Pooneh Sooresrafil, for the responding party

Heard: February 3, 2026

Reasons for Decision

[1] The moving party, Castle Homes Design Inc. ("Castle Homes"), seeks an order transferring the appeal to the Divisional Court pursuant to s. 110 of the Courts of Justice Act, R.S.O. 1990, c. C.43 (the "CJA"), or, in the alternative, an order extending the time to perfect the appeal. For the reasons that follow, I decline to transfer the appeal to the Divisional Court, but I grant the request to extend the time to perfect the appeal until February 23, 2026.

Background

[2] Castle Homes is a construction company which contracted with the responding party, Deborah White ("Ms. White"), to build and install an outdoor swimming pool and deck on her property. A dispute arose between the parties regarding the work performed under the contract, as a result of which Castle Homes registered a lien against Ms. White's property and brought a lien action in the Superior Court (the "Lien Action") pursuant to s. 50 of the Construction Act, R.S.O. 1990 c. C.30 (the "Act").

[3] Castle Homes missed several deadlines prescribed by the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and two court-ordered timetables set in case management conferences. In addition, several costs orders were made against Castle Homes, most of which were not paid.

[4] On March 17, 2025, Ms. White brought a notice of motion pursuant to various provisions of the Rules, seeking dismissal of the Lien Action due to Castle Homes' failure to comply with timetables and court orders. The motion was heard on July 16, 2025.

[5] On August 21, 2025, the motion judge dismissed the Lien Action, discharged the lien, and awarded costs to Ms. White on a substantial indemnity basis against both Castle Homes and Mr. Hussaini personally in the amount of $26,556.87 (the "Dismissal Order").

[6] Castle Homes submitted a notice of appeal of the Dismissal Order to this court on September 22, 2025. On November 17, 2025, counsel for Ms. White advised counsel for Castle Homes that the appeal should have been filed in the Divisional Court due to the statutory appeal route in s. 71 of the Act. After reviewing the matter, counsel for Castle Homes agreed and sought consent to an extension of time to file an appeal in the Divisional Court, but that consent was refused.

[7] In the meantime, on November 26, 2025, Castle Homes was warned by the Registrar that the appeal would be dismissed for delay if it was not perfected by December 17, 2025. The appeal was not perfected by that date. Instead, on December 17, 2025, Castle Homes brought the present motion seeking to transfer the appeal to the Divisional Court or extend the time to perfect the appeal in this court.

Motion to Transfer Appeal

[8] Section 71 of the Act sets out a statutory appeal route:

(1) Except as otherwise provided in this section, 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.

(2) A party wishing to appeal shall file and serve a notice of appeal within fifteen days of the date of the judgment or order, but the time for filing or serving the notice of appeal may be extended by the written consent of all parties, or by a single judge of the Divisional Court where an appropriate case is made out for doing so.

(3) No appeal lies from an interlocutory order made by the court, except with leave of the Divisional Court.

[9] Both parties proceeded on the assumption that the Dismissal Order is a "judgement… under this Act [the Construction Act]" and, therefore, should have been appealed to the Divisional Court rather than this court, pursuant to s. 71(1) of the Act.

[10] The difficulty is that it is not entirely clear that this is the case.

[11] On the one hand there is a long line of cases under the Act as well as the predecessor legislation, the Construction Lien Act, giving a liberal interpretation to s. 71, such that jurisdiction to hear appeals from proceedings commenced under the Act generally lies with the Divisional Court. This liberal interpretation of s. 71 is consistent with the purpose of the Act, which is to provide a summary procedure for the determination of construction lien proceedings: TRS Components Ltd. v. Devlan Construction Ltd., 2015 ONCA 294, 125 O.R. (3d) 161, at para. 11. This purpose would be frustrated if the proper appeal route in construction cases is unclear since, rather than resolving disputes on the merits in a timely way, parties will be diverted into time-consuming, costly, and improvident litigation over whether an appeal has been commenced in the proper court.

[12] In recognition of the fact that all parties in such disputes benefit from clarity over the correct route of appeal, in TRS Components this court held that an appeal from a judgment on a counterclaim obtained in construction lien proceedings lay to the Divisional Court, even though the counterclaim was based on a breach of contract rather than a provision of the Act. The court expressly rejected the argument that the route of appeal should be determined based on the substantive claim in the action (in that case a claim in contract), as opposed to the fact that the proceeding was commenced under the Act. The panel held the following at para. 18:

In our view, "judgment…under this Act" in s. 71 includes a judgment granted in an action commenced and continued under Part VIII of the Act, including any counterclaim, cross-claim or third party claim, unless the action or any part of the action is removed from the construction lien proceeding, and directed to proceed under the Rules.

[13] This interpretation is also supported by this court's more recent decision in MGW-Homes Design Inc. v. Pasqualino, 2024 ONCA 422, 172 O.R. (3d) 770, where appellate jurisdiction was at issue after a Superior Court judge made orders related to the enforcement of private adjudication which occurred under the new "construction dispute interim adjudication" provisions in the Act. In that decision, the panel reviewed TRS Components and Villa Verde L.M. Masonry Ltd. v. Pier One Masonry Inc. (2001), 54 O.R. (3d) 76 (C.A.), and concluded "neither case limits this broad interpretation to the specific procedure for lien claims": MGW-Homes, at para. 26.

[14] MGW-Homes also cited with approval (at para. 30) this court's decision in Durall Construction Ltd. v. W.A. McDougall Ltd. (1979), 25 O.R. (2d) 371, which made the following statement about a similar provision in the Mechanics' Lien Act, R.S.O. 1970, c. 267, at p. 373:

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.

[15] In contrast, in Arcamm Electrical Services Ltd. v. Avison Young Real Estate Management Services LP, 2024 ONCA 251, this court held that the appeal from a judgment in a proceeding commenced under the Act could only be determined by examining the "substance of the order made": at para. 14. On this basis, the court in Arcamm held that an appeal from an order for summary judgment in a proceeding commenced under the Act lay to this court rather than the Divisional Court, since the motion judge granted summary judgement on the basis of r. 20, a rule promulgated under the CJA.

[16] If TRS Components is the controlling precedent, then the appeal in this case would lie to the Divisional Court rather than this court, since the order was obtained in a proceeding brought under the Act. However, if Arcamm is controlling, the appeal would appear to lie to this court rather than the Divisional Court. This is because the motion judge's endorsement states that "…, the action is dismissed under rules 3.04(4) and 60.12 of the Rules of Civil Procedure and the construction lien and the certificate of action are ordered to be discharged under s. 47 of the Construction Lien Act" (emphasis added). Although the motion judge relied on s. 47 of the Act to discharge the lien and the certificate of action, these orders were ancillary to the order dismissing the Lien Action, which was based on a violation of various provisions of the Rules. Thus, because the "substance of the order made" was based on the Rules rather than a provision of the Act, Arcamm suggests that the appeal is properly before this court.

[17] A condition precedent to transferring an appeal to another court under s. 110 of the CJA is a finding that the appeal has been brought in the wrong court. I am unable to come to that conclusion in this case since, depending on which of these conflicting precedents governs, the appeal may well have been properly brought to this court.

[18] The interests of justice also favour the appeal remaining in this court. There is a strong public interest in clarifying the appeal route in construction disputes, consistent with the purpose of the Act to provide an efficient and cost-effective method for resolving such matters. Unlike the Divisional Court, this court can resolve apparent conflicts between its own precedents and provide the needed clarity, if necessary through a five-judge panel. See "Practice Direction Concerning Civil Appeals at the Court of Appeal for Ontario", (March 1, 2017), at 13.

[19] I therefore decline to exercise my discretion to transfer the appeal to the Divisional Court and dismiss the motion to transfer the appeal.

Motion for Extension of Time to Perfect

[20] The overarching consideration on a motion to extend time to perfect an appeal is whether the justice of the case requires the extension. The factors include:

(a) The continuing intention to appeal during the period required for perfection;

(b) The length of and explanation for the delay;

(c) The prejudice to the respondent; and

(d) The merits of the appeal.

See: Codina v. Canadian Broadcasting Corporation, 2020 ONCA 116, at para. 2.

[21] I need not consider these factors in any detail since in the particular circumstances of this case the interests of justice favour granting a modest extension of time to perfect the appeal.

[22] The parties had agreed on November 20, 2025 that the appeal should have been brought to the Divisional Court rather than this court. This was well prior to the perfection deadline of December 17, 2025 set by the Registrar. It would be contrary to the interests of justice to now deny the moving party the opportunity to perfect the appeal, when it (along with the responding party) was operating under the assumption that this court lacked jurisdiction to hear the appeal, which can be explained by the competing jurisprudence of this court rather than simple inadvertence of the parties or their counsel. Nor does it matter that in late November and early December the moving party was focused on gathering fresh evidence which it intended to introduce on the appeal, as opposed to perfecting the appeal. The simple fact that neither party was aware at the time that the appeal may well have been properly brought in this court makes it unjust to now deny Castle Homes a modest extension to perfect.

Disposition

[23] The motion to transfer the appeal is dismissed.

[24] The motion to extend time to perfect the appeal is granted and Castle Homes is given leave to perfect its appeal by no later than February 23, 2026.

[25] Absent further order of this court, costs of this motion are reserved to the panel hearing the appeal.

"P.J. Monahan J.A."