Court File and Parties
CITATION: Mahendran v. Singh et al., 2022 ONSC 3908
DIVISIONAL COURT FILE NO.: DC-22-1287-0000
DATE: 20220705
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Backhouse, Varpio, King, JJ.
BETWEEN:
KIRUBAKARAN MAHENDRAN
Plaintiff/Defendant by Counterclaim (Appellant)
– and –
9660143 CANADA INC., SANDEEP SINGH, 1713691 ONTARIO INC. and KARL NODEL
Defendants/Plaintiffs by Counterclaim (Respondents)
Brian Sherman, for the Plaintiff/Defendant by Counterclaim (Appellant)
Howard W. Reininger, for the Defendants/Plaintiff by Counterclaim (Respondent) 1713691 Ontario Inc. and Karl Nodel
Sandeep Singh, Self-Represented Defendants/Respondents
HEARD: June 27, 2022
REASONS FOR DECISION
Varpio J.:
[1] This is an appeal from an Order of Edwards RSJ dated October 6, 2021. The appellant is seeking to set aside the Order which discharged a Certificate of Pending Litigation.
[2] For the reasons that follow, the appeal is hereby dismissed.
FACTS
[3] The property located at 252 Church Street in Markham, Ontario is owned by the respondent, 9660143 Canada Inc. The respondent, 1713691 Ontario Inc., is a mortgagee for the subject property (the “Mortgagee”). The appellant claims to have entered into a verbal agreement with some of the respondents (not Mr. Nodel who is associated with the Mortgagee, or the Mortgagee) whereby the appellant would build and supply materials for the construction of a house on said property. Once completed, the house was to be sold. The proceeds of sale would be used to pay the appellant for his work. The appellant would share in the profits of the sale. The appellant submits that during the time he was building the house, the respondents secured a second mortgage from the Mortgagee without his knowledge.
[4] On or about May 2018, the appellant and 9660143 Canada Inc. entered into an Agreement of Purchase and Sale (“APS”). This deal did not close, and ownership of the subject property remained with the defendant.
[5] A Statement of Claim was filed and subsequently amended on December 4, 2019. A Certificate of Action was issued and registered on title in the Land Titles Office on December 5, 2019.
[6] The appellant pled in para. 11 of the Amended Statement of Claim that “Sandeep convinced Mahendran to become a partner with him in the house. The respondents Singh and 9660143 Canada In. also pled in para. 4 of the Statement of Defence that the appellant was a partner in the property”.
[7] The respondents filed a Notice of Motion on October 14, 2020 seeking, inter alia, a discharge of the Claim for Lien and an order vacating the Certificate of Action. This motion was heard by video conference on June 10, 2021, at Oshawa, Ontario.
[8] At the motion, the respondent submitted that the appellant was not a contractor within the meaning of section 1 of the Construction Lien Act but was instead an owner and thus not entitled to a lien. The respondent also submitted that the appellant was a registered owner of 9660143 Ontario Inc. As a result of this alleged fact, the appellant was a partner in the subject property prior to July 1, 2018, and thus not entitled to a lien.
[9] After hearing submissions by counsel, Edwards RSJ ordered that:
• The Claim for Lien be discharged;
• The Certificate of Action registered in the Land Titles Office be vacated; and
• The plaintiff pay the defendant, 1713691 Ontario Inc., and Karl Nodel, costs in the amount of $6,700.
[10] In his subsequent Reasons for Decision, Edwards RSJ held that the appellant was an owner as defined by the Act, and therefore not entitled to a Claim for Lien against the subject property. This is a crucial finding because, pursuant to statute, an owner cannot place a lien upon her/his own property. Edwards RSJ referenced Big Creek Construction Limited v. York Trillium Development Group Limited 1993 3379 (ON CA), 1993 CarswellOnt83 (affirmed by the Divisional Court 1993 Carswell Ont 841) as precedent for that proposition.
[11] Later in his reasons, Edwards RSJ examined the definition of “contractor”. A “contractor” is defined by the Construction Lien Act as “a person contracting with or employed directly by the owner to supply services or materials to an improvement and includes a joint venture”.
[12] Edwards RSJ relied upon Cohen v. Brin 2013 ONSC 1302 at paras. 5 and 19 describing the distinction between an owner and a contractor. At paras. 20 and 21 of his reasons, Edwards RSJ discussed Cohen as follows:
Master Albert went on to deal with the question of whether the relationship between the parties was one of a partnership and noted that the existence of a partnership depends on the facts and circumstances of each case and the intention of the parties. The existence of a partnership includes three essential ingredients specifically a business; carried on in common; with a view to profit. Furthermore, the indicia of a partnership as noted by Master Albert include the contribution by the parties of money, property, effort, knowledge, skill or other assets to a common undertaking, a joint property interest and the sharing of profits or losses (see Cohen at paragraph 15).
Having reviewed the evidence in this matter the following comments of Master Albert at paragraph 19 of his reasons in Cohen in my view are determinative of the motion before me:
"I find that the evidence does not support Mr. Cohen's contention that he was merely a contractor. Mr. Cohen's contribution was one of skill and effort. The agreement provides for all design and construction management to be carried out by Mr. Cohen, without the owner having any option to obtain competitive price quotes or hire a project manager other than Mr. Cohen. That provision is consistent with a partnership and inconsistent with the relationship of owner and contractor." [emphasis added]
[13] Edwards RSJ then considered the appellant’s cross-examination. At para. 22 of his reasons, Edwards RSJ stated that “[t]he following extract also demonstrates that the plaintiff was a partner in the construction of the residence and that he was not exclusively a contractor”. The extract considered by the motions judge evidences that the appellant entered into an agreement to keep the property in the name of one of the respondents, that the appellant would share the profits of the development and that the appellant would pay for the work done to the house.
[14] Based upon the foregoing, Edwards RSJ found that “[o]n the evidence before the Court, I am satisfied that the plaintiff is an owner as defined by the Act”.
ANALYSIS
[15] The Notice of Appeal states that the motions court judge erred in finding that the appellant was an “owner” in that Edwards RSJ:
Failed to consider relevant and persuasive evidence;
Failed to apply the appropriate test for the existence of a partnership; and
Failed to apply the correct act, in that the matter ought to have been governed by the Construction Act, as opposed to the Construction Lien Act.
[16] I will deal with each ground of appeal in turn.[^1]
The Failure to Consider Allegedly Relevant Evidence
[17] The appellant described evidence that he submits ought to have been essential to Edwards RSJ’s decision. Specifically, the appellant submitted that the motions judge failed to consider Mr. Nodel’s evidence that:
Only Mr. Nodel and/or his lawyer met with Mr. Singh;
Mr. Nodel did not perform any due diligence on the property prior to giving a mortgage;
Mr. Nodel provided a second mortgage and paid off the first mortgage with the proceeds of same;
Mr. Nodel did not meet the appellant; and
Mr. Nodel had no documentary evidence to support the claims he advanced.
[18] The appellant also submitted that the motions judge failed to consider Mr. Singh’s evidence that:
Mr. Singh had no documentation corroborating Mr. Singh’s claim that he told Mr. Mahendran about the mortgages;
Mr. Singh stated that he spoke with Mr. Nodel about the mortgage, whereas Mr. Nodel testified that these discussions were had through Mr. Nodel’s lawyer; and
The appellant was not on title and was only a contractor hired to build the house and share in the profit.
[19] It is trite to state that a court must consider the important evidence and the pertinent arguments presented by the parties. It must not, however, deal with every specific piece of evidence or argument advanced by counsel when coming to a decision. The jurisprudence supporting this position was recently articulated by the Alberta Court of Appeal in Bott v. Schneider, [2022] A.J. 547 at para. 87:
The PCJ further erred in not explaining fully his reasoning for granting the order. While courts have a duty to give reasons sufficient to permit appellate review (see R v Sheppard, [2002] 1 SCR 869, 2002 SCC 26 (at paras 28-29, 50 and 55), if the record and context demonstrate the Court's reasons, and support the conclusion, even without articulation, that may be sufficient: Custom Metal Installations Ltd. v. Winspia Windows (Canada) Inc, 2020 ABCA 333 at para 32).
[20] In this case, the appellant did not explain why the motions judge was required to consider the impugned evidence. In fact, the appellant advanced no discernible argument in this regard. Nonetheless, and upon review of Edwards RSJ’s reasons, it is clear that the motions judge drew a conclusion that the appellant was an owner, as opposed to a contractor, based upon relevant evidence adduced by the parties.
[21] Accordingly, the reasons disclose no error as per R. v. Sheppard. This ground of appeal is therefore dismissed.
The Failure to Apply the Correct Test for a “Partnership”
[22] In Cohen v. Brin, the case Edwards RSJ cited, Master Albert described the test for partnership at paras. 14 and 15:
The Partnership Act, R.S.O. 1990, c. P5, provides:
2.Partnership is the relation that subsists between persons carrying on business in common with a view to profit.
3.The receipt by a person of a share of the profits of a business is proof, in the absence of evidence to the contrary, that the person is a partner in the business ...
(b)a contract for the remuneration of a servant or agent or a person engaged in a business by a share of the profits of the business does not of itself make the servant or agent a partner in the business or liable as such.
The existence of a partnership depends on the facts and circumstances of each case and the intention of the parties. There are three essential ingredients: (1) a business, (2) carried on in common, and (3) with a view to profit. (See: Continental Bank of Canada v R, 1998 794 (SCC), [1998] 2 S.C.R. 298, 1998 CarswellNat 1496 (S.C.C.) at paras. 22 and 23). The indicia of partnership include the contribution by the parties of money, property, effort, knowledge, skill or other assets to a common undertaking, a joint property interest and the sharing of profits or losses (supra at para 24).
[23] The governing words of the Partnership Act remain the same today as they were when Cohen v. Brin was decided. Further, Continental Bank of Canada remains binding jurisprudence: see 1062484 Ontario Inc. v. Williams McEnery, [2021] O.J. No. 1011 (Ont. C.A.) at para. 24. In Continental Bank, the majority stated at para. 22 that:
Section 2 of the Partnerships Act defines partnership as "the relation that subsists between persons carrying on a business in common with a view to profit". This wording, which is common to the majority of partnership statutes in the common law world, discloses three essential ingredients: (1) a business, (2) carried on in common, (3) with a view to profit. I will examine each of the ingredients in turn.
[24] Edwards RSJ thus correctly articulated the test for partnership and applied same. Accordingly, this ground of appeal fails.
The Use of the Wrong Act
[25] Counsel for the appellant did not explain why it is that the matter ought to have been entertained pursuant to the Construction Act. Further, the appellant did not make a cogent submission as to why deciding this motion pursuant to the Construction Lien Act, as opposed to the Construction Act, made any difference in the circumstances.
[26] I do note, however, that s. 71(3) of the Construction Lien Act stated:
(3) No appeal lies from…
(b) an interlocutory order made by the court.
[27] Further, section 71(3) of the Construction Act states that:
(3) No appeal lies from an interlocutory order made by the court, except with leave of the Divisional Court.
[28] In this case, no leave was sought from the Divisional Court, and it is therefore questionable whether the appeal is capable of being heard in any event.
[29] Nonetheless, this ground of appeal is dismissed because the appellant advanced no argument to support that the Construction Lien Act was not the correct statute to consider or what difference this would have made had the matter been determined under the Construction Act.
COSTS
[30] The respondents submitted that, if successful, they ought to be entitled to $10,000 plus HST but that the appellant ought only be entitled to $5,000 plus HST if he were successful.
[31] I see no reason for this difference since the issues to be determined and the length of time apparently devoted to this case were identical for both parties.
[32] Accordingly, I am satisfied that $5,000 plus HST is the appropriate quantum of costs in this case. The appellant Mahendran shall pay the respondents (1713691 Ontario Inc. and Mr. Nodel) $5,000 (plus HST) within 30 days of today’s date.
[33] Since he filed no materials and represented himself, Mr. Singh is not owed any costs.
Backhouse J.
Varpio J.
King J.
Released: July 5, 2022
CITATION: Mahendran v. Singh et al., 2022 ONSC 3908
DIVISIONAL COURT FILE NO.: DC-22-1287-0000
DATE: 20220705
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Backhouse, King, Varpio, JJ.
BETWEEN:
KIRUBAKARAN MAHENDRAN
– and –
9660143 CANADA INC., SANDEEP SINGH, 1713691 ONTARIO INC. and KARL NODEL
REASONS FOR decision
Released: July 5, 2022
[^1]: The appellant did not address standard of review in his submissions. Given the reasons that follow, I need not address same.