Construction Law - ONCA

The appellants sought an order under s. 110 of the Courts of Justice Act to transfer their appeal from the Court of Appeal for Ontario to the Divisional Court and to extend the time for serving and filing a notice of appeal.

The appeal arose from a construction contract dispute where the respondent contractor brought a lien action under the Construction Act after the appellants refused to pay the final invoice.

The trial judge awarded damages in favour of the respondent.

The appellants' counsel had filed the notice of appeal in the wrong court.

The motion judge found that the appellants satisfied the three criteria for transfer: arguable grounds of appeal, manageable prejudice to the respondent, and expeditious action once the jurisdictional error was discovered.

The appeal was transferred to the Divisional Court with an extended deadline for filing the notice of appeal.

The Court of Appeal for Ontario considered whether Seabrook Bros.

Mechanical Ltd., a subcontractor and lien claimant, was entitled to a revised assessed value for its security in the insolvency proposal of North House Foods Ltd. The court held that there was no appeal as of right under s. 193(a)-(c) of the Bankruptcy and Insolvency Act, but granted leave to appeal under s. 193(e) due to the importance of the issue.

The appeal was dismissed, as the motion judge had not erred in finding that the appellant's security (a lien on a leasehold interest) had no realizable value in the circumstances.

The court clarified the onus on dissatisfied creditors under s. 50.1(4) of the BIA and the limited recourse for lien claimants in insolvency.

The Kriesers appealed a trial judgment that dismissed their claims for construction deficiencies and breach of fiduciary duty, and granted judgment to the respondents for outstanding invoices.

The Court of Appeal dismissed the appeal, finding no error in the trial judge's determination that the Kriesers breached the contract by withholding payments, which disentitled them to warranty claims, and that there was insufficient evidence for the remaining deficiency claims.

The court also upheld the finding that no fiduciary relationship existed between the parties, and affirmed the trial judge's cost award.

The appellant, Canada Forgings Inc., appealed the dismissal of its procurement law claim against Atomic Energy of Canada Limited (AECL).

The trial judge had found the claim statute-barred by the two-year limitation period and rejected the procurement law arguments, concluding no "Contract A" was formed.

The trial judge also ruled a Deloitte Report inadmissible.

The Court of Appeal upheld the trial judge's decision, finding the reasons sufficient, the limitations analysis correct, the procurement law findings sound (no duty of fairness without Contract A), and the Deloitte Report properly excluded due to prior rulings and privilege.

The appeal was dismissed, and the costs award from the trial was upheld.

The appellant, MGW-Homes Design Inc., appealed an order vacating a writ of enforcement related to an adjudicator's determination under the Construction Act.

The primary issue was whether the Court of Appeal had jurisdiction to hear the appeal, which depended on whether the order constituted a "judgment" under s. 71(1) of the Construction Act, in which case the appeal would lie to the Divisional Court.

The Court of Appeal, interpreting "judgment" broadly consistent with prior case law and the Act's purpose of efficiency, found that the order was a "judgment" under s. 71(1).

Consequently, the appeal was dismissed for lack of jurisdiction, as it properly belonged in the Divisional Court.

Arcamm Electrical Services Ltd. (Arcamm) brought a motion to quash an appeal by 4342 Queen St. Niagara Holdings Inc. (Queen) to the Court of Appeal for Ontario, arguing that the underlying summary judgment, granted in a Construction Act action, should have been appealed to the Divisional Court.

The Court of Appeal dismissed Arcamm's motion, holding that the appeal properly lay with the Court of Appeal because the summary judgment was granted under Rule 20 of the Rules of Civil Procedure based on a contractual claim, not under the Construction Act, and the court's jurisdiction is determined by the substance of the order made.

The appellants appealed a motion judge's order lifting a stay of proceedings under the Bankruptcy and Insolvency Act (BIA) and amending a default judgment to declare the debt non-dischargeable in bankruptcy under s. 178(1)(d) BIA, on the basis that it arose from misappropriation or defalcation while acting in a fiduciary capacity.

The underlying action involved breach of statutory trust under the Construction Act for unpaid construction materials.

The Court of Appeal affirmed the motion judge's decision, finding no error in the refusal to admit extrinsic evidence contradicting deemed admissions from the default judgment, nor in considering the appellants' non-compliance with enforcement orders.

The court upheld the finding that the judgment debt arose from misappropriation or defalcation, emphasizing that the deemed admissions, including an award of punitive damages, demonstrated intentional wrongdoing and conduct markedly departing from ordinary standards of decent behaviour, satisfying the "moral turpitude or dishonesty" threshold for s. 178(1)(d) BIA.

The Court of Appeal for Ontario considered a motion regarding an appeal that arose under the Construction Lien Act.

The moving parties (respondents) argued that the Court of Appeal lacked jurisdiction over the appeal.

The court agreed, finding that jurisdiction for such matters lay with the Divisional Court, and that the question of whether the underlying order was final or interlocutory was for the Divisional Court to decide.

Consequently, the Court of Appeal quashed the appeal and declined to exercise its discretion to transfer the appeal to the Divisional Court.

Costs were awarded to the successful moving parties.

This appeal addressed the Ontario court's jurisdiction over an action that overlapped with earlier proceedings in Nova Scotia involving the same parties.

The appellant sought to stay the Ontario action, arguing lack of jurisdiction simpliciter and that Nova Scotia was the more convenient forum.

The Court of Appeal, conducting a fresh analysis due to incomplete lower court reasons, affirmed Ontario's jurisdiction simpliciter but found Nova Scotia to be clearly the more appropriate forum.

This decision was based on the significant overlap of issues and the high risk of inconsistent findings between the two actions.

The Ontario action was stayed on an interim basis.

The Court of Appeal for Ontario quashed an appeal brought by 9001522 Canada Limited, finding it lacked jurisdiction under s. 71(1) of the Construction Act.

The court declined to exercise its discretion to transfer the appeal to the Divisional Court, dismissing 9001522 Canada Limited's cross-motion for transfer.

Costs were awarded to East Elgin Concrete Forming Limited.

The appellant, Black & McDonald Limited, appealed two orders staying their proceedings in Ontario in favour of British Columbia as the more convenient forum.

The first action was against Eiffage Innovative Canada Inc. and individuals for breach of contract and breach of trust related to a construction subcontract.

The second was against Liberty Mutual Insurance Company under a payment bond.

The Court of Appeal found that the motion judge erred in interpreting an "exclusive jurisdiction" clause in the prime contract as applicable to the subcontract, and that the forum non conveniens factors did not clearly favour British Columbia, thus the high standard to displace the plaintiff's chosen jurisdiction was not met for the Eiffage action.

For the Liberty Mutual action, the Court found the forum selection clause in the payment bond ambiguous and resolved it against Liberty Mutual, also noting the public policy against multiple proceedings risking inconsistent findings.

The appeals were allowed, and the actions were permitted to proceed in Ontario.

The appellants, lien claimants in a condominium development bankruptcy, appealed a motion judge's decision regarding the quantum of their priority under section 78(2) of the Construction Act.

They argued for a 20% priority due to two building mortgages, while the receiver contended it was a single 10% holdback deficiency.

The Court of Appeal granted leave to appeal, finding the statutory interpretation issue important.

On the merits, the Court of Appeal upheld the motion judge's interpretation, affirming that the priority is limited to the single 10% holdback deficiency, regardless of the number of building mortgages.

The appeal was dismissed.

The appellants, construction lien claimants, appealed a Divisional Court decision that granted priority to a vendor-take-back mortgage, including interest and enforcement costs, over their lien claims.

The Court of Appeal affirmed the Divisional Court's ruling, holding that the priority of prior mortgages under s. 78(3) of the Construction Act extends to arrears in interest and enforcement costs, consistent with long-standing judicial interpretation and practice, and that a vendor-take-back mortgage constitutes an "advance" for the purposes of the Act.

The appeal was dismissed with costs.

The appellants, a group of subcontractors and a bank, appealed an application judge's decision that rescission of surety bonds might be possible even if it affects innocent third parties.

The bonds were issued by Zurich Insurance Company Ltd. for a large construction project, but Zurich later discovered alleged fraudulent misrepresentations and collusion that induced it to issue the bonds.

The appellants sought a declaration that rescission was unavailable as a matter of law due to the involvement of innocent third parties.

The Court of Appeal dismissed the appeal, affirming that prejudice to third parties is not an absolute bar to rescission, especially in cases of fraudulent misrepresentation, and that such a determination requires a full factual record at trial.

This grouped appeal concerned four applications seeking declarations that the appellant insurers had a duty to defend the respondent corporations against claims of property damage arising from condominium construction deficiencies.

The application judge found a duty to defend based on the "mere possibility" test and refused ex ante allocation of defence costs.

The Court of Appeal dismissed the insurers' appeal, affirming the application judge's findings that the "mere possibility" test applies to exclusions and that courts should not conduct a "trial within a trial" on duty to defend applications.

The court also upheld the order for pre-notification defence costs and dismissed a cross-appeal regarding the assessment of past defence costs.

This appeal arose from a decision granting partial summary judgment in a construction lien dispute.

The appellants (Larson Properties Partnership Group and Kevin Gary Larson) challenged the motion judge's finding of no genuine issue requiring a trial and the appropriateness of partial summary judgment.

The Court of Appeal upheld the motion judge's decision, finding no error in the determination that a genuine issue did not exist and that the partial summary judgment was appropriate given subsequent resolutions of other aspects of the litigation.

The appeal was dismissed.

The appellants (homeowners) appealed a trial decision that found them liable for breach of an oral renovation contract and dismissed their claims against the builder and the City of Hamilton.

The Court of Appeal dismissed the appeal, upholding the trial judge's findings regarding the oral contract, the standard of construction, the interpretation of allowances, the homeowners' breach of contract, and the builder's compliance.

The appellate court deferred to the trial judge's credibility findings, particularly concerning expert evidence, and his assessment of damages, finding no palpable and overriding error.

The appellant, a mortgagee, appealed a motion judge's decision that granted priority to construction lien claimants over his registered third mortgage.

The Court of Appeal dismissed the appeal, affirming that the advances made by the mortgagee did not fall within the exceptions of s. 78(2) or s. 78(6) of the Construction Act.

The court held that advances must be "made in respect of" the mortgage and the intention to secure financing must operate prospectively to gain priority over liens.

The decision reinforces the general principle of priority for lien claimants and the onus on mortgagees to clearly fall within statutory exceptions.

This appeal concerned the priority of a solicitor's charging order over construction lien trust funds, specifically whether interest on the contract price is included in the trust funds.

Sutherland Law, the appellant, appealed the Divisional Court's decision which had granted Great Northern Insulation Services Ltd. priority for its claim, including interest, over Sutherland Law's charging order.

The Court of Appeal affirmed the Divisional Court's decision, holding that interest on the contract price is included in the trust funds under the Construction Lien Act, and that the Divisional Court had jurisdiction to hear the appeal.

The court also confirmed that there is only one trust fund for subcontractors and that a contractor cannot claim against trust funds if it used trust funds to pay another subcontractor.

The appeal was dismissed.

This appeal concerns the effectiveness of a statutory trust under s. 9(1) of Ontario's Construction Lien Act (CLA) in Companies' Creditors Arrangement Act (CCAA) insolvency proceedings.

Unpaid contractors (appellants) claimed a trust over proceeds from the sale of condominium units by the insolvent developer (Cumberland Group).

The motion judge denied the trust, relying on Re Veltri Metal Products Co., reasoning that the CCAA Monitor's involvement prevented the trust from arising.

The Court of Appeal allowed the appeal, clarifying that a s. 9(1) CLA trust can be effective in CCAA sales processes and is only displaced by federal paramountcy if it conflicts with a specific CCAA priority.

The court distinguished Veltri, stating it did not prevent a s. 9(1) trust when proceeds exceed mortgage debt and expenses, and confirmed the "deemed receipt" rule.