Robert John Kennaley

The moving party, a terminated project manager, brought motions to dismiss or stay claims advanced against it in two related construction actions on grounds of abuse of process and multiplicity of proceedings.

The responding parties had advanced identical counterclaims for deficiencies and delay across multiple proceedings arising from the same construction project.

The court found the counterclaim in the simplified procedure action was duplicative and an abuse of process, but accepted the responding parties' discontinuance of that claim.

The court declined to dismiss the separate balcony deficiency action, finding the issues sufficiently distinct and the parties not identical, but ordered that it be heard together with or immediately after the lien action in the interests of judicial economy.

The moving party sought leave to appeal the decision of an adjudicator.

The Divisional Court granted leave to appeal and reserved the costs of the motion, fixed at $5,000, to the appeal panel.

The parties were directed to request a case conference to address the appeal schedule and a request for an interim stay.

This decision concerns the interim distribution of the admitted basic holdback under the Construction Act in a complex construction lien reference.

The court fixes the minimum basic holdback obligation of 35 Mercer Limited and orders pro rata payment to certain validated lien claimants, while holding the balance pending further determination of disputed liens, particularly that of 1086289 Ontario Inc. o/a Urban Electrical Contractors.

The ruling addresses the allocation of holdback among multiple classes of lien claimants and the treatment of disputed and unproven liens.

The appellant, Seargeant Picard Incorporated (SPI), appealed a "boomerang" summary judgment order that found the respondents' (Saxbergs') action for breach of a construction contract was not statute-barred.

SPI argued the motion judge erred in the discoverability analysis and in granting the boomerang order.

The Court of Appeal dismissed the appeal, finding no reversible error in the discoverability analysis, particularly regarding the application of the "appropriate means" test under the Limitations Act, 2002, and upheld the boomerang order given the parties' agreement and the thoroughness of the motion judge's review.

The applicant, Dalren Limited, sought payment of a final invoice and construction lien holdback, arguing that the prompt payment provisions of the Construction Act applied.

The respondents, Loadstar Trailers Inc. and 1978327 Ontario Ltd., contended that these provisions did not apply because the procurement process for the improvement commenced before July 1, 2018, falling under the Act's transitional rules.

The court found that the procurement process indeed began before the critical date, and that the applicant, despite not owning the land at the outset, qualified as an 'owner' under the Act for the purpose of commencing the procurement process.

Consequently, the prompt payment provisions were deemed inapplicable, and the application was dismissed.

The appellant construction manager appealed a motion judge's order reducing the amount of security posted by the respondent developer to vacate a construction lien.

The motion judge had reduced the security by the amount the developer paid directly to the appellant's subcontractors, finding these were valid payments under section 28 of the Construction Act.

The Divisional Court allowed the appeal, holding that the motion judge erred in law by interpreting section 28 to include payments to subcontractors who did not fall within the statutory definition of a 'person having a lien'.

The motion judge's order was set aside.

The moving party sought leave to bring an application for judicial review to set aside part of an adjudicator's determination.

The Divisional Court dismissed the motion for leave.

The court ordered no costs due to the absence of a Costs Outline, directed that deposited monies be paid out to the responding party, and lifted the stay against the enforcement of the determination.

This endorsement determined the costs for two previous motions where the Defendants (Oakleigh and Aurelia) were successful.

The Plaintiff's request for further settlement disclosure was denied in the "undertakings motion" and the Defendants successfully obtained a reduction of their security bond in the "security motion." The court awarded partial indemnity costs of $15,000 for the undertakings motion.

For the security motion, the Defendants' requested costs of $258,901.81 were reduced to $174,522.94, primarily by applying the "least expensive course" principle under s. 86(2) of the Construction Act to significantly reduce consulting fees.

The Plaintiff was ordered to pay the fixed costs forthwith.

The defendants, Aurelia Limited Partnership and Oakleigh Holdings Inc., brought a motion under section 44(5) of the Construction Act to partially reduce the security posted to vacate the plaintiff Demikon Construction Ltd.'s claim for lien.

The defendants argued that direct payments made to subcontractors, for which they had not received credit, should reduce the lien security.

The court found that these direct payments were valid under section 28 of the Act and should reduce the lien amount.

The motion was granted, reducing the lien security from $5,085,812.66 to $1,581,587.83.

The defendant, Seargeant Picard Incorporated (SP), moved for summary judgment to dismiss the plaintiffs', Scott and Rachel Saxberg (the Saxbergs), action on the grounds that the claim was barred by the Limitations Act, having not been commenced within two years of discovery.

SP argued the claim was discoverable in October 2012 when they refused to perform certain recommended "repairs" at their cost.

The Saxbergs contended the issues were "upgrades" and the true extent of damage was not discovered until June 2015, when extensive water damage was uncovered during subsequent work.

The court dismissed SP's motion, finding that the Saxbergs' claim was discovered in June 2015, and therefore, the action commenced on July 25, 2016, was within the two-year limitation period.

The plaintiff construction manager brought a preliminary motion for the production of settlement documents between the defendant owners and a sub-trade.

The defendants had made a direct payment to the sub-trade and sought to reduce the security posted to vacate the plaintiff's lien.

The plaintiff argued the settlement documents were relevant to the security reduction motion and fell under exceptions to settlement privilege.

The court dismissed the motion, finding the settlement details irrelevant to the summary nature of the security motion and noting the merits of the counterclaim were not at issue at this stage.

Following the dismissal of the plaintiff's construction lien claim and the granting of the defendants' counterclaim, the court determined costs and interest.

The court awarded the defendants substantial indemnity costs of $225,000, finding that the plaintiff's claim was without foundation and its conduct abusive.

The court pierced the corporate veil to hold the plaintiff's principal personally liable for the costs, as he dominated the corporation and used it for extortionary purposes.

Prejudgment interest was awarded at a rate of 2% per annum.

The appellant appealed a motion judge's decision allowing a breach of trust claim to be joined with a construction lien claim under the amended Construction Act.

The Divisional Court allowed the appeal, holding that while the Act itself is silent on joinder, O. Reg. 302/18 expressly permits only the joinder of breach of contract or subcontract claims.

By implication, the regulation precludes the joinder of trust claims in a construction lien proceeding.

The order permitting joinder was set aside and the trust claims were struck.

The appellants hired the respondents for a backyard renovation project with milestone payments.

After disputes and delays, the appellants terminated the contract and sued for breach of contract and unjust enrichment.

The trial judge dismissed the appellants' claims, finding no fundamental breach, but awarded damages to the respondents for the balance of the contract despite the lack of a valid counterclaim.

On appeal, the Court of Appeal upheld the dismissal of the unjust enrichment claim, noting the contract provided a juristic reason for the payments made.

However, the Court allowed the appeal in part to set aside the damages awarded to the respondents, as the proper party had not filed a counterclaim.

This case involved a construction dispute where the plaintiff, Save On Contracting, claimed construction liens and damages against the defendant property owners.

The defendants counterclaimed for costs to complete and correct deficiencies, alleging Save On repudiated the contract.

The court analyzed the contract's interpretation regarding Tarion warranty security, whether one of the defendants was a "builder" under the Ontario New Home Warranties Plan Act, and whether Save On fundamentally breached the contract.

The court found that Save On repudiated the contract by making groundless payment demands and abandoning the site.

Consequently, Save On's claims were dismissed, and the defendants were awarded damages for the costs of completing the work and correcting deficiencies.

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 defendant contractor in a construction lien action brought a motion for security for costs against the corporate plaintiff.

The court first granted leave to bring the motion under s. 67(2) of the Construction Lien Act, finding it necessary to 'even the playing field' as the plaintiff lacked sufficient assets in Ontario.

Applying the framework for security for costs, the court found the plaintiff failed to provide full financial disclosure to establish impecuniosity and failed to demonstrate a good chance of success on the merits.

The motion was granted, and the plaintiff was ordered to post security for costs in installments totaling $77,500.

Three lien claimants brought a motion in a receivership proceeding to determine the proper interpretation of s. 78(2) of the Construction Act regarding priority over building mortgages.

The claimants argued they were entitled to priority for the holdback deficiency against each building mortgage individually, effectively multiplying their priority amount.

The court dismissed the motion, holding that the lien claimants' priority is limited to the extent of the single deficiency in the owner's holdback over all building mortgages combined, as multiplying the priority would be contrary to the statutory scheme and unfairly prejudice subsequent encumbrancers.

The applicant corporation sought leave for its principal to represent it in a construction lien action, despite having legal counsel.

The respondents opposed, raising concerns about the principal's advocacy ability and seeking security for costs.

The court granted leave on the condition that the applicant post $56,000 as security for costs by a specified date.

The court found that while the principal's advocacy ability was a concern, it did not meet the "too high a threshold" for denial, but imposed the security for costs to "level the playing field" and ensure procedural fairness, given the existing security posted by the defendants in the construction lien context.

Failure to post the security would result in the claim and defence to counterclaim being stayed.

The plaintiff, SRK Woodworking Inc., brought a motion to amend its pleadings to add new parties (officers and directors of the defendant, Devlan Construction Ltd.) and to join a breach of trust claim with its existing construction lien action.

The court examined the transitional provisions of the Construction Act and the impact of the repeal of the former prohibition on joining trust claims with lien claims, as well as the re-location of the permissive joinder of breach of contract claims to a regulation.

The court found that the prompt payment and adjudication schemes of the new Act did not apply to this case, and therefore, there was no reason to prohibit the joinder of trust and lien claims.

The motion to add the new defendants and amend the Statement of Claim was granted.