Court File and Parties
CITATION: J.D. Strachan Construction Ltd. v. Egan Holdings Inc., 2021 ONSC 6425
DIVISIONAL COURT FILE NO.: 125/19
DATE: 20210929
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
D.L. Corbett, Penny and Favreau JJ.
B E T W E E N:
J.D. STRACHAN CONSTRUCTION LTD.
James R. Smith, for the Appellant
Plaintiff / Appellant
- and -
EGAN HOLDINGS INC., EGAN FUNERAL HOME and BUSINESS DEVELOPMENT BANK OF CANADA
James S.G. MacDonald, for the Respondents
Defendants / Respondents
Heard by Videoconference: Feb. 10, 2021
REASONS FOR DECISION
D.L. Corbett J.:
[1] The appellants appeal from the order of Doi J., discharging a substantial portion of their claim for lien and ordering that the balance of the claim for lien be vacated upon payment into court by the respondents of $60,772.91 (2019 ONSC 522). The motion judge also found that the portion of the appellant’s claim for lien that was struck out could continue to be the subject-matter of a contract claim by the appellant against the respondents.
Summary and Disposition
[2] The motion judge correctly concluded that the applicable deadlines for claims respecting services and materials provided to the date of publication of the certificate of substantial completion are to be calculated from the date of publication of the certificate – May 13, 2014. It is clear that the lien was preserved on time (the claim for lien was registered within 45 days), but that the claim for lien was not perfected on time (the certificate of action was not registered within ninety days of publication of the certificate of substantial completion). The motion judge also concluded, correctly, that both the claim for lien and certificate of action were registered on time for claims for services and materials provided by the appellant after the date of the certificate of substantial completion: that aspect of the motion judge’s decision has not been appealed.
[3] The motion judge examined the appellant’s promissory estoppel argument closely and concluded that, on the most favourable view of the evidence available for the appellant, the defence of promissory estoppel does not arise in this case. I agree. This court need not address whether promissory estoppel is available to toll a statutory deadline to perfect a construction lien: on the facts of this case, even if promissory estoppel could arise, it does not arise here. Therefore, for the reasons that follow, I would dismiss the appeal.
Background Facts
[4] The parties entered into a contract on December 6, 2011 for additions and renovations to the Egan Funeral Home in Bolton Ontario. The contract price was $3,035,247.80. The appellant is a “contractor” and the respondents are “owners” within the meaning of the CLA.
[5] The respondents published a certificate of substantial completion on May 13, 2014.
[6] The appellant worked on the project to and including June 24, 2014. On June 26, 2014, it registered a claim for lien claiming $505,208.68, stating a last date of supply of services and materials of June 24, 2014. On September 24, 2014, the appellant registered a Certificate of Action.
Legal Framework
[7] The parties agree that the Construction Lien Act (“CLA” or the “Act”) applies to this claim.[^1]
[8] The CLA is remedial legislation, to be given a large and liberal interpretation to secure its objects. On the other hand, the courts have consistently construed the deadlines in the Act strictly. There is good reason for this. Registration of a claim for lien gives notice to all the world of a lien claim. This notice is relied upon by other stakeholders, including lenders, owners, and contractors and subcontractors.
[9] The CLA provides a mechanism by which an owner may establish – for all the world – that there are no liens in respect to a contract after that contract has reached substantial completion: publication of a certificate of substantial completion in accordance with the Act. When this is done, it starts the clock running: a lien claimant has 45 days to register a claim for lien from the date of publication of the certificate of substantial completion.[^2] The lien claimant then has a further 45 days to register a certificate of action. Both dates are calculated from the date of publication of the certificate of substantial completion: 45 days for the claim for lien, and a further 45 days (total of 90 days) for the certificate of action.[^3]
[10] Where there is no certificate of substantial completion, the same deadlines apply, but calculated from the date on which the claimant last supplied services or materials to the improvement.[^4]
[11] In some situations, including the case at bar, two sets of deadlines arise:
(a) deadlines for claims respecting goods and services provided to the date of the certificate of substantial completion, which are calculated from the date of publication of the certificate; and
(b) where a claimant supplies services or materials after the date of publication of the certificate of substantial completion, the date of last supply of materials or services to the improvement.
The deadline in (a) applies up to claims for services and materials to the date the certificate was published; the deadline in (b) applies to work done after publication of the certificate.[^5]
[12] The motion judge found that the bulk of the construction lien claim concerns services and materials supplied up to the date of publication of the certificate of substantial completion. Only $43,025.07 (plus HST) was in respect to work done after publication of the certificate. These are findings of fact, amply supported by the record.
[13] The motion judge found that the date of publication of the certificate was May 13, 2014. The deadline for filing a claim for lien in respect to work done by the date of publication was June 27, 2014. The claim for lien was registered on June 24, 2014. It was on time. The motion judge found that the deadline for registering a certificate of action for work done to the date of publication of the certificate of action was August 11, 2014. This finding is correct in law, given the unchallenged factual findings I have just described. The certificate of action was not registered until September 24, 2014, 44 days too late to perfect the claim for lien in respect to work done to the date of publication of the certificate.
[14] Accordingly, the motion judge correctly found that the claim for lien respecting work done to the date of publication of the certificate of substantial completion was out of time on the basis of the provisions of the CLA. This left but one issue: is there a triable issue that this deadline was suspended by the operation of promissory estoppel.
Promissory Estoppel
[15] The motion judge examined this issue in detail (Reasons, paras. 27 to 43). He correctly stated the general test for promissory estoppel (paras. 28-29), and found, as a matter of fact, that “the Defendants did not make any representations, either by words or conduct, that would have led the Plaintiff to expect that strict legal rights and obligations under s.31(2)(a)(i) of the Act would not be enforced” (para. 39). This finding was available on the evidence and is entitled to deference in this court. On this basis, the motion judge distinguished the only two cases put before him[^6] in which Ontario courts have relied on the doctrine of promissory estoppel to toll the running of the deadlines in the CLA.
[16] I agree with the motion judge’s analysis on the basis of the authorities put to him. That is a sufficient basis on which to dispose of this appeal.
[17] I note, further, that a construction lien does not just affect the rights and interests of the claimant and the owner. It can affect the position of other claimants on the site (contractors, subcontractors, workers and suppliers), and it can affect the position of lenders, including construction lenders. The CLA expressly provides that parties may not contract out of provisions of the Act: it is arguable that this provision would not permit promissory estoppel to operate to defeat deadlines stipulated in the Act.[^7]
[18] Promises to pay, even ones that are stated to be contingent on a claimant altering his position to his detriment (for example, promising to pay next week so long as a lien is not registered), happen frequently in construction contracts. If such promises – to pay – could have the effect of extending deadlines, then lenders would not be able to be sure that a lien will not emerge later that would otherwise be out of time. The “promises” could cascade down the “construction ladder”. The strict deadlines on the Act could be defeated. I would not decide this issue in this case, where it is clear that the facts do not give rise to promissory estoppel. However, this decision does not signal that promissory estoppel can arise to defeat the deadlines in the CLA.
[19] For these reasons the appeal is dismissed, with costs payable by the appellant to the respondent fixed at $5,000, inclusive, payable within thirty days.
D.L. Corbett J.
I agree:_______________________________
Penny J.
I agree: _______________________________
Favreau J.
Released: September 30, 2021
CITATION: J.D. Strachan Construction Ltd. v. Egan Holdings Inc., 2021 ONSC 6425
DIVISIONAL COURT FILE NO.: 125/19
DATE: 20210929
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
D.L. Corbett, Penny and Favreau JJ.
BETWEEN:
J.D. Strachan Construction Ltd.
Appellant
- and –
Egan Holdings Inc., Egan Funeral Home and Business Development Bank of Canada
Respondents
REASONS FOR DECISION
D.L. Corbett J.
Released: September 29, 2021
[^1]: Construction Lien Act, RSO 1990, c.C.30. [^2]: CLA, s.31(2)(a)(i). [^3]: CLA, s.36(2). [^4]: CLA, s.31(2)(b). [^5]: CLA, 31(2)(b). [^6]: Valo v. 430327 Ontario Inc. (1982), 1982 1857 (ON SC), 36 OR (2d) 439 (Master) and Soo Mill & Lumber Co. v. 499812 Ontario Ltd., [1984] OJ No. 2418 (HCJ). [^7]: CLA, s.4.