SUPERIOR COURT OF JUSTICE – ONTARIO

COURT FILE NO.: 10-49675
MOTION HEARD: 2012/05/29

In the matter of the Construction Lien Act, R.S.O. 1990, c. C.30 as amended

RE: Exteriors By Design, Plaintiff

AND:

Mark Traversy and Stephanie Traversy, Defendants

BEFORE: Master MacLeod

COUNSEL:
Christopher Spiteri, for the Plaintiff
Marcus Boire, for the Defendant

HEARD: May 29, 2012

ENDORSEMENT

[ 1 ] The parties had competing summary judgment motions before the court today both of which were opposed on the basis that they were premature and there were issues of credibility. After preliminary discussion, the parties have agreed to adjourn the motion and to proceed instead by a judgment of reference. A judgment of reference is available under s. 58 (1) of the Act and is to be in Form 16 ( R.R.O. 1990, Reg. 175 as amended, s. 16 ).

[ 2 ] I have endorsed and encouraged this approach for several reasons as set out below.

Summary Judgment

[ 3 ] To succeed on a summary judgment motion, the parties would have to meet the new test under Rule 20 of convincing the court that there is no genuine issue requiring a trial. Furthermore the court would have to be persuaded that having regard to the approach directed by the Court of Appeal in Combined Air Mechanical Services Inc. v. Flesh et. al. 2011 ONCA 764 ; (2011) 108 O.R. (3d) 1 and the stage of the proceedings, that the court could achieve full appreciation of the evidence without a trial and that it would be just to reach that conclusion in advance of discoveries.

[ 4 ] A master hearing a summary judgment motion applies the same test as a judge and is entitled to weigh the sufficiency of the evidence under Rule 20.02 (1) & (2) but unlike a judge, the master does not have access to the new powers to assess credibility or weigh competing evidence that are set out in Rule 20.04 (2.1) and (2.2). [1] Consequently if there are genuine questions of fact that hinge on determinations of credibility it is extremely unlikely that summary judgment will be available.

[ 5 ] There is a further issue in this case. Pursuant to s. 67 (2) of the Construction Lien Act, leave is required for any interlocutory proceeding including a motion for summary judgment. The court must be satisfied on the basis of proof that the interlocutory steps are necessary or would expedite the resolution of the issues in dispute. A summary judgment motion may meet this test in a lien action but it is self evident that an unsuccessful summary judgment motion will postpone resolution on the merits, delay the proceeding and increase costs. [2]

[ 6 ] A final consideration is the amount in dispute. The claim for lien is for $12,325.08. The counterclaim is for $34,001.16 which is essentially the full value of the contract. S. 67 (1) of the Act requires that in lien litigation the court adopt a procedure that is so far as possible of a summary character, having regard to the amount in dispute and the nature of the liens in question. This is an action that would ordinarily, but for the lien, have been in small claims court or under Rule 76. There is therefore a real question as to whether or not arguing summary judgment motions meets the needs of the case when a summary trial procedure is available at which the presiding judicial officer is fully empowered to determine all issues of fact and law.

[ 7 ] In this case the dictates of Rule 1.04 (that the court promote the just, most expeditious and least expensive determination of every proceeding on the merits and apply the rules to make orders and give directions that are proportionate to the importance and complexity of the issues) aligns perfectly with the dictates of s. 67 (1) of the Act. A quick two day summary trial which will finally determine all matters is preferable to arguing a half day improbable summary judgment motion which may still require a trial for some or all of the issues.

[ 8 ] Counsel were in agreement that if the affidavits are used as part of the evidence in chief then the trial should take no more than two days. They were offered a trial before a judge at the end of June or a trial by way of reference in August. After discussion, counsel elected the latter and subject to obtaining the necessary judgment, I have appointed August 7 th and 8 th , 2012 as the dates for trial.

HEARING FOR DIRECTIONS

[ 9 ] In Ottawa, the procedure for obtaining a judgment of reference on consent is to bring the draft judgment and the consent to the master’s office for review. Assuming it meets the requirements under the Act, the master will send the judgment to a judge for his or her consideration. If and when the judgment is signed, it will be issued and entered by the Registrar in the master’s office and returned to counsel. A reference file will then be opened and a date set for a first appearance (hearing for directions) by all affected parties. Ordinarily an order for trial is then obtained from the master and served along with a notice of trial as set out below. For reasons that follow, some of those steps can be avoided in the case at bar.

[ 10 ] A reference under the Construction Lien Act is governed by the Act and, to the extent that they are not inconsistent with the Act, Rules 54 & 55 of the Rules of Civil Procedure that apply to all references. As such, the first step in a lien reference, after obtaining the judgment of reference, is to obtain a date for a hearing for directions [3] and to serve a notice of trial under s. 60 (4) of the Act. [4] In this case, the only parties affected by the reference are the parties that were before the court on the summary judgment motion and pursuant to their consent to proceed to trial it is appropriate to dispense with these formal requirements.

[ 11 ] Accordingly, subject to a judge approving and signing the formal judgment of reference, the hearing today will be deemed to be the hearing for directions and service of the notices of motion for summary judgment will be deemed to be service of Notice of Trial.

ORDER AND DIRECTIONS

[ 12 ] I therefore order and direct as follows:

a. This order will come into effect nunc pro tunc upon the formalization of a judgement of reference to a case management master in Ottawa under the Construction Lien Act. The parties are to file a draft order and a consent with the master’s office by June 8 th , 2012 failing which this order will be null and void, the motions for summary judgment shall be deemed to be dismissed, and the action shall continue under the ordinary rules applicable to lien actions.

b. Subject to the judgment of reference being obtained, the service of the notices of motion in the summary judgment motions shall be deemed to be service of notice of trial under the Act and the hearing before me today shall be deemed to be the hearing for directions contemplated by Rule 55.

c. Service of notice of trial on any encumbrancer of the property in question is dispensed with and they need not be made a party to the reference because the lien claimant does not claim priority over any mortgage or other encumbrance.

d. The trial of the action shall proceed by way of summary trial before the master acting as referee on August 7 th and 8 th , 2012. The provisions of Rule 76 applying to summary trials shall apply to the hearing except as modified by this order.

e. The affidavits filed on the summary judgment motion may form part of the case of each party. By June 30 th , 2012 counsel shall advise each other whether or not they wish to cross examine the deponents of any of the affidavits and if so the witness will be produced in person at the trial.

f. Notwithstanding the introduction of the affidavits, each party may also examine their own witnesses in chief for up to 15 minutes each. Counsel shall however advise the other counsel of this intention prior to June 30 th , 2012 and shall confirm the list of witnesess.

g. All witnesses produced in person at the trial may be cross examined by the opposing counsel. Unless otherwise directed or agreed, the cross examination is not to exceed 2 hours for the parties, 1 hour for experts and 30 minutes for other witnesses.

h. Reply evidence may be called if witnesses are cross examined. Reply evidence will not exceed 10 minutes per witness without leave.

i. Counsel may modify these times by agreement, with leave of the master at the trial or in advance of the trial by requesting a further hearing for directions to address the matter.

j. The parties are to seek agreement on admission of all documents required for the trial and they are encouraged to prepare an agreed upon chronology and document book.

k. There will be a further hearing for directions on a date to be set by the Registrar.

l. Subject to the judgment of reference issuing as aforesaid, this order forms part of my procedure book and binds the parties without further formality in accordance with Rule 55.02 (11).

Master MacLeod

Date: May 29, 2012

[1] See 90 George St. v. Reliance Construction Canada et. al. 2012 ONSC 1171 (Master) & Mehdi-Pour v. Minto Developments et al 2010 ONSC 5414 (Master); affirmed 2011 ONSC 3571 (Div.Ct.); leave to appeal refused Oct. 20, 2011 (M40188) (C.A.)

[2] See 6007325 Canada Inc. v. LPQ 18 Yorkville Aveneue Inc., (2010) 92 C.L.R. (3d) 100 (S.C.J. – Master) and Towanda Timber Ltd. v. Ontario (2006) 55 C.L.R. (3d) 271 (S.C.J.)

[3] Traditionally in the practice before the lien masters in Toronto this was referred to as the first “pre-trial” but to avoid confusion with Rule 50 and to be consistent with Rule 55, I prefer to use the terminology from the latter rule.

[4] The Notice of Trial takes the place of Form 55A under the reference rules.