SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: CV-10-1977-00
DATE: 20121029
RE: Eurodale Developments Inc. v. Rimgate Holdings Ltd.
BEFORE: MacKenzie J.
COUNSEL:
Mr. S. Kazushner , for the plaintiff
Ms. S. Wu , for the defendant
ENDORSEMENT No. 2: REASONS
[ 1 ] The plaintiff asserts a lien claim under the Construction Lien Act (CLA) for $18,353.46. The defendant counterclaims against the plaintiff for $298,299.42.
[ 2 ] The plaintiff’s claim and the defendant’s counterclaim arise out of construction work and services relating to the defendant’s acquisition, disassembly and relocation of a model home from the 2010 Toronto Home Show in Toronto, Ontario to the defendant’s lands in Caledon, Ontario.
[ 3 ] The plaintiff moves for:
(a) leave to conduct its examination for discovery of the defendant notwithstanding that the plaintiff filed its trial record in accordance with s. 37, CLA.;
(b) an order amending the timetable relating to pre-trial matters in the action;
(c) an order for a site inspection by the plaintiff of the building described in its claim for lien;
(d) plus costs of the motion
[ 4 ] The defendant cross-moves for:
a) an order requiring a designated representative of the plaintiff to attend examination for discovery on a stipulated date or on 5 days notice;
b) if an order is granted allowing the plaintiff to conduct discoveries notwithstanding the matter has been set down for trial, then an order that the defendant be allowed to begin and complete its examination for discovery prior to it being examined for discovery;
c) payment of outstanding invoices issued to the plaintiff respecting copies of the defendant’s productions requested by the plaintiff;
d) plus costs
[ 5 ] The issue of leave to bring the motion engages the provisions of s. 67(2) of the C.L.A. and Rule 48.04 of the Rules of Practice .
[ 6 ] Section 67(2) of the C.L.A. provides as follows:
Interlocutory steps, other than those provided for in this Act, shall not be taken without the consent of the court obtained upon proof that the steps are necessary or would expedite the resolution of the issues in dispute.
[ 7 ] Section 67(3) of the C.L.A. provides as follows:
Except where inconsistent with this Act, and subject to subsection (2), the Courts of Justice Act and the rules of court apply to pleadings and proceedings under this Act.
[ 8 ] Rule 48.04(1) provides as follows:
Subject to subrule (3), any party who has set an action down for trial and any party who has consented to the action being placed on a trial list shall not initiate or continue any motion or form of discovery without leave of the court.
[subrule 3 is not engaged on the facts of this case].
[ 9 ] The position of the plaintiff on the leave application is quite simply that the action had to be set down for trial to preserve the plaintiff’s construction lien and prevent it from expiring, that is, within the (two) 2 year period, and further that the filing of the trial record was for the sole purpose of maintaining the plaintiff’s construction lien claim and at no time had the plaintiff abandoned its intentions to proceed to examination for discovery of the defendant and to proceed to a site inspection.
[ 10 ] The plaintiff submits that the plaintiff would be prejudiced if leave were not granted, i.e. for conducting discoveries and obtaining a site inspection, whereas the defendant would not be prejudiced by granting such orders.
[ 11 ] In opposition, the defendant’s position is that the plaintiff has not provided evidence that discoveries and a site inspection are necessary or would expedite the resolution of the issues in dispute as provided for in s. 67(2) and the provisions of Rule 48.04 respecting the consequences of setting an action down for trial are determinative.
[ 12 ] The respondent cites the case of Pineau v. Kretschmar Inc ., a construction lien action in which a trial date was set by the Master even though the action had not been set down for trial before a judge. The plaintiff died after the matter had been set down for trial but prior to the designated trial date, the action was transferred to his personal representative and a motion was made upon the expiry of the lien to reschedule a trial date.
[ 13 ] In the reasons for decision wherein the lien claim and the rescheduling motion were dismissed, the Master referred to the provisions of s. 67(2). The rationale of the section was set out on a detailed discussion as to the process in the conduct of Toronto Region construction lien motions. However, the real question centered around the failure to properly set down the action for trial in accordance with s. 37 of the C.L.A.
[ 14 ] I am of the view that this case is not dispositive of the position of the parties in relation to the relief being sought by the plaintiff.
[ 15 ] The plaintiff cites the case of Clarkway Construction Co. v. Stars of Malwa Investments Inc., (2001) 7 C.L.R. (3d) 312, (S.C.J.) . Counsel contends that the issue in that case is precisely the issue before the court in this matter. In Clarkway , a construction lien action, the plaintiff had filed its trial record to ensure compliance with the two year time limit under s. 37 of the C.L.A. The plaintiff then moved for relief similar to the relief being sought here, namely, that an examination of discovery be held of the defendant notwithstanding that the trial record had been delivered and filed by the plaintiff pursuant to s. 37. Croll J. of this court stated the following:
This section [s. 37 of the C.L.A.] requires that one of the following occur before the second anniversary of the commencement of the action:
An order is made for the trial of an action in which the lien may be enforced;
An action in which the lien may be enforced is set down for trial (para 5)
[ 16 ] The defendant in Clarkway took (as does the defendant here) the position, relying on Rule 48.04, that since the trial record had been served and filed, the plaintiff was not entitled to discovery of the defendant. In Clarkway , Croll J. noted counsel for the defendant suggested that:
The plaintiff made a deliberate choice between protecting his lien claim under s. 37 of the Act and preserving the opportunity to conduct examination for discovery of the defendant. (para.9)
[ 17 ] Croll J. rejected this submission, saying:
Throughout, it is clear that the plaintiff has been trying to obtain discovery of the defendant, and there is no evidence to suggest that the plaintiff was foregoing this process. (para 10)
[ 18 ] The above observations are apposite to the case at hand. Whatever the record discloses in terms of the dispute between counsel for the parties respecting the order and timing of discoveries, I am persuaded on that record that there is nothing to suggest the plaintiff was foregoing this process (production and discoveries) and that it only filed a trial record to maintain the life of its lien claims within the time limit stipulated in s. 37 of the C.L.A. Further, I am not persuaded the general thrust of the case law under Rule 48.04 denying leave to initiate or continue any discovery or production is engaged in this case.
[ 19 ] In the result, examinations for discovery of each other by the parties will take place. In the circumstances, the defendant shall have its discovery of the proper representative of the plaintiff in the first instance and thereafter the plaintiff shall proceed to discovery of the proper representative of the defendant.
[ 20 ] The defendant objects to the request of the plaintiff to conduct a site inspection. The defendant takes the position that the site inspection would not assist the plaintiff in assessing the counterclaim arising from alleged deficiencies with the house since most of those deficiencies have been rectified. In this regard, the defendant contends that the rectification measures taken by it and the costs incurred by it that form the subject of its counterclaim have already been provided in the defendant’s Scott Schedules, together with the photographs of the house.
[ 21 ] Without dealing with the precise nature of the allegations of those deficiencies, the response to those allegations and the alleged rectification measures, I put the question to counsel during the hearing of the motion and cross-motion whether or not the photographs provided by the defendant to date are capable of being characterized as “before” and “after”: in other words, are some of the photographs showing the alleged deficiencies before any remedial or rectification measures were taken and are some of them showing the same part(s) of the house after the rectification measures. Counsel in the circumstances were unable to satisfy me with any satisfactory or unequivocal answer to this question.
[ 22 ] In such a situation, I am unable to give effect to the position of the defendants that a site inspection would not assist the plaintiff in assessing the defendant’s claims arising out of the alleged deficiencies and rectification. I am not persuaded that a site inspection would operate to the prejudice to the defendants to the extent that it would not be compensable in monetary terms in due course.
[ 23 ] The question of receiving payment for productions made by the defendant to the plaintiff is hardly problematic in the circumstances. Quite apart from the plaintiff’s position that they have supplied copies of their productions to the defendants gratis , counsel for the plaintiff points out that there has been a supplementary affidavit of documents which has been submitted by the defendant to the plaintiff in a draft form that is unsigned. Counsel points out that the plaintiff is unable at this point to assess what documents to be produced, copies of which are properly subject of delivery to the plaintiff from the defendant. In this regard, even though the defendant would be entitled to reasonable costs of copying its productions, it is not appropriate to make any order respecting the copying costs of production until the documents in question have firmly been settled or ascertained.
[ 24 ] I agreed with this submission. In addition, the ultimate affidavit on production will have some impact with respect to the content or composition of the Scott Schedules. Unless and until the affidavit of documents of the defendant is put in a final form, whether in a single document being a compendium of the original affidavit of documents and the draft affidavit of documents, any entitlement to copying costs by the defendant from the plaintiff is unascertainable. In these circumstances, the appropriate payments for reimbursing copying costs, by the defendant to the plaintiff and by the plaintiff to the defendant if it subsequently chooses to invoice the defendant for its previously gratis copying costs, shall be reserved to the trial judge if the parties are unable to settle the same.
[ 25 ] The timetable set out in the resulting order is intended to provide a clear and, hopefully, expeditious temporal roadmap for the parties to bring the action and counterclaim to trial. I have noted that the putative completion date for both parties’ discoveries is January 31, 2013. In the interest of continuity, I have agreed with counsel that I would be available for any necessary advice or direction with respect to this date if supervening circumstances indicate the same is not viable. Any advice and direction process may be done in the month of January, 2013 on prior arrangement at either a 9:00am appearance or, if circumstances allow, a 9:00am teleconference with materials, if necessary, delivered in advance. In the event of such a teleconference or appearance becoming necessary, I would ask counsel on a timely basis to contact my assistant, Ms. Sopana Selvachandran, at (905) 456-4835 to make appropriate arrangements.
MacKenzie J.
DATE: October 29, 2012
COURT FILE NO.: CV-10-1977-00
DATE: 20121029
SUPERIOR COURT OF JUSTICE - ONTARIO RE: Eurodale Developments Inc. v. Rimgate Holdings Ltd. BEFORE: MacKenzie J. COUNSEL: Mr. Skazushner , for the plaintiff Ms. S. Wu , for the defendant ENDORSEMENT No. 2 REASONS MacKenzie J.
DATE: October 29, 2012