Robert John Kennaley

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.

The plaintiff contractor brought a motion to amend its statement of claim to correct a misnomer, add a claim for additional construction costs, and plead misrepresentation against one of the defendants regarding his status as an owner versus a builder under the New Home Warranties Plan Act.

The defendants opposed the amendments, arguing they were statute-barred and improperly joined to a lien action.

The court granted the motion in its entirety, finding that the misrepresentation claim was not clearly statute-barred as it was discovered recently upon disclosure of a project management agreement.

The court also found that the misrepresentation claim had an essential connection to the lien claim, permitting joinder.

Finally, the court declined to order security for costs or costs thrown away against the plaintiff, noting the defendants' delay in producing the relevant agreement.

The applicants, CRD Construction Ltd. and Rob Leshuk, sought a declaration that their insurers, Aviva Insurance Company of Canada and Economical Mutual Insurance Company, had a duty to defend them against a counterclaim and to reimburse their legal fees.

The court found that Economical had waived its right to deny the duty to defend due to a reservation of rights letter and its acceptance.

However, the court found that the applicants' breaches of the duty of cooperation constituted non-compliance, making relief from forfeiture unavailable against Aviva, and that the applicants failed to prove their conduct was reasonable for relief from forfeiture against either insurer regarding the duty of cooperation.

Economical was ordered to defend and reimburse the applicants, while the application against Aviva was dismissed.

The defendants, a lawyer and his firm, brought a motion for summary judgment to dismiss the plaintiff's professional negligence action as statute-barred.

The plaintiff alleged the defendants negligently failed to perfect a construction lien, resulting in the loss of its secured position.

The plaintiff argued it did not discover the claim until the conclusion of the debtor's bankruptcy proceedings when it became clear no funds would be recovered.

The court held that the plaintiff knew or ought to have known it had suffered a loss and that a civil action was legally appropriate by October 2014, when it was advised the lien had expired.

The bankruptcy proceeding was not an alternative dispute resolution process that delayed the limitation period.

The action, commenced in 2019, was statute-barred and dismissed.

The plaintiff contractor sued the defendant homeowners for unpaid invoices related to a major home renovation.

The defendants moved for summary judgment, arguing the claim was statute-barred under the Limitations Act, 2002.

The plaintiff argued the limitation period was tolled due to mediation and the defendants' enrollment in the Tarion warranty process.

The court dismissed the motion, finding that the complex factual matrix and the interplay between the Tarion process and the construction contract could not be fairly and justly adjudicated on a summary record without a full trial.

The plaintiff brought a motion to strike the defendants' statement of defence and counterclaim under Rule 60.12, alleging non-compliance with trial management directions to deliver a Scott Schedule.

The court found that while the defendants' Scott Schedule was imperfect, they had made a good faith effort to comply and offered to revise it expeditiously upon retaining new counsel.

The court dismissed the motion, noting that striking pleadings is a draconian measure reserved for repeated and blatant disregard of court orders.

The court awarded substantial indemnity costs to the defendants because the plaintiff unreasonably forced the motion and ignored a favourable offer to settle.

The appellants appealed a summary judgment decision granting payment of invoices for demolition and clean-up work performed on their fire-damaged property.

The motion judge found no genuine issue requiring a trial regarding the amount owing.

The respondent had provided comprehensive documentation including receipts, supplier invoices, worker timesheets, and the final amount had been audited by a company appointed by the appellants' insurer.

The appellants did not cross-examine and failed to raise sufficient doubt about the amount.

The Court of Appeal upheld the summary judgment and dismissed the appeal.

The appellant appealed an order of the Superior Court of Justice dismissing his action under Rule 21(a) on the basis that the contractual provision at issue—a covenant to insure—could be determined as a matter of law.

The Court of Appeal found that Rule 21(a) was improperly applied because the covenant could not be interpreted in isolation from the contract as a whole or in a factual vacuum.

The motion judge did not have the contract itself before him, making it impossible to determine the objective intentions of the parties according to principles of contract interpretation.

The appeal was allowed, the motion judge's order was set aside, and costs were awarded to the appellant.

Rassaun Services Inc. (RSI) brought a motion to renew a Certificate of Pending Litigation (CPL) against the Elgin Road property, which had been initially issued without notice.

The defendants opposed the renewal, arguing that RSI lacked a reasonable claim to an interest in the land.

The court found that RSI failed to establish a triable issue regarding its claim, as the evidence presented amounted to mere suspicion rather than proof of a proprietary interest or a statutory trust under the Construction Act.

The motion to renew the CPL was dismissed, and the CPL was discharged.

Costs were reserved to the motion judge presiding over the adjourned matter.

Plus Development Group Corp. brought a motion to oppose the confirmation of a Master's Report, which had awarded Roni Excavating Ltd. $523,241.99 plus costs for excavation work, including extras for the removal of contaminated soil.

Plus Development argued that the Master erred in evidentiary rulings, findings of fact regarding Roni Excavating's knowledge of soil conditions, and the authorization of extras.

The court dismissed Plus Development's motion, confirming the Master's Report, finding no palpable or overriding error in the Master's evidentiary rulings or findings of fact.

The court affirmed that Roni Excavating was entitled to charge for the removal of contaminated material as an extra, as contemplated by the contract and authorized by Plus Development's agent.

This endorsement addresses the costs arising from a successful Rule 21 motion where the defendant struck out the plaintiff's claim for breach of contract and negligence.

The court awarded costs to the successful defendant, affirming the general principle that a successful party is entitled to costs, especially when the matter was resolved early, minimizing legal fees and court resources.

The defendant's proposed costs of $10,000 were found to be fair and reasonable and were not disputed by the plaintiff.

The plaintiff, Devlan Construction Ltd., moved for summary judgment against the defendant, 2345171 Ontario Inc. (Guelph Medical Imaging), for outstanding construction costs related to tenant improvements, including alleged extras.

The defendant disputed authorization for the extras, the accounting, alleged deficiencies, and the profit margin.

Applying the Hryniak v. Mauldin framework, the court found that authorization for the extras was clearly given, dismissed the deficiency claims due to lack of pleading and evidence, and resolved the accounting and profit issues in favour of the plaintiff.

Summary judgment was granted for $105,599.74 plus pre-judgment interest, and funds paid into court to lift a construction lien were ordered to be paid out to the plaintiff.

The defendant contractor brought a Rule 21 motion to dismiss the plaintiff owner's action for faulty workmanship.

The construction contract contained a covenant requiring the owner to purchase property insurance covering damage resulting from defective workmanship and to name the contractor as an insured.

The court held that this covenant to insure operated as a voluntary assumption of risk by the owner, relieving the contractor of liability for damages caused by its negligence or breach of contract.

The plaintiff's action was dismissed.

The plaintiff excavation contractor brought a construction lien claim against the defendant developer for unpaid contract work and extras.

The primary dispute was whether the plaintiff was entitled to charge extra for disposing of contaminated soil, which the defendant argued was included in the fixed contract price.

The court found that the defendant's agent had represented the soil as clean and that the parties had agreed to an extra charge of $47 per metric tonne for contaminated materials.

The court awarded the plaintiff $523,241.99 for the extras, finding the defendant liable for the increased disposal costs and other authorized scope changes.

This endorsement addresses an issue regarding the payment of costs from trust funds in a construction lien proceeding.

Quality Rugs of Canada Limited sought to have its previously awarded costs for a motion and action paid from the Trust Funds, which were established to secure claims of various lien claimants.

The court declined this request, affirming its prior costs endorsement.

The court reasoned that the issue had been previously decided, that "Other Lien Claimants" were not parties to Quality Rugs' specific proceeding and should not bear its costs, and that allowing such payment would create an impermissible priority for Quality Rugs' costs contrary to the rateable distribution provisions of the Construction Lien Act.

The plaintiff sought to enforce a Quebec default judgment against the personal defendant, Lorenzo Panarese, in Ontario.

Panarese challenged the Quebec court's jurisdiction and argued that the judgment should not be enforced due to breach of natural justice or fraud.

The court found that the Quebec court had a real and substantial connection to the dispute and that Panarese had attorned to its jurisdiction by participating in the Quebec proceedings without reserving on jurisdiction.

The court dismissed the defences of natural justice and fraud, concluding that the evidence did not support a finding of fraud and that issues of service and the right to be heard were already litigated and decided in Quebec.

The Ontario court granted recognition and enforcement of the Quebec judgment against Panarese.

This costs endorsement addresses three sets of costs arising from prior motions: Quality Rugs' unsuccessful claim for carriage/salvage costs, Quality Rugs' successful summary judgment motion, and Quality Rugs' costs of the action.

The court applied principles from the Courts of Justice Act and Rule 57.01 of the Rules of Civil Procedure, emphasizing proportionality and reasonable conduct.

Quality Rugs' claim for salvage costs was dismissed, with the court finding its tactics unreasonable and the claimed services not benefiting the lien class.

Consequently, Quality Rugs was ordered to pay partial indemnity costs to Carriage Counsel ($20,125 plus HST) and Casaco/Casimiro ($4,000 plus HST) for that motion.

For its successful summary judgment motion, Quality Rugs was awarded $7,500 plus HST from Casaco/Casimiro.

For the action, Quality Rugs was awarded $10,000 plus HST from Sedona Development Group (Lorne Park) Inc., Sedona Development Group Inc., Casaco Developments Inc., and Casimiro Holdings Inc. The court found Quality Rugs' overall costs claims to be disproportionate to the amount at stake and its conduct in pursuing salvage costs to be unreasonable, though not egregious enough for substantial indemnity.

The costs orders were subject to set-off.

Homeowners sued the Town of Huntsville after basement flooding due to Building Code non-compliance and deficient building inspections.

A first action was settled with a payment from the Town's insurer (Lloyd's) and an agreement for repairs, with releases held in escrow.

When the repairs failed, homeowners brought a second action.

The Town applied for a declaration that its insurers (Lloyd's and AIG) had a duty to defend the second action.

The court found that Lloyd's had a duty to defend because the first action was not fully settled, the second action was a continuation of the first, and the Town's exposure to contractual claims arose from counsel retained by Lloyd's.

AIG had no duty to defend as the damage was manifest before its policy period and the second action was primarily contractual.