SUPERIOR COURT OF JUSTICE - ONTARIO
Court File No.: CV-12-470476
Date: November 25, 2013
RE: WEBB & LASHBROOK INC. v GINGER SORBARA and VALLICAN INVESTMENTS INC.
BEFORE: MASTER C. ALBERT
COUNSEL:
S. P. Valleau, for the plaintiff (defendant by counterclaim)
T: 416-365-7135, ext 30; F: 416-365-2189
M. Handler, for the defendants (plaintiffs by counterclaim)
T: 905-265-2252; F: 905-265-2235
ENDORSEMENT
This construction lien claim arises from Webb & Lashbrook Inc. (“Webb”)’s renovation of Ginger Sorbara’s property at 176 Glenn Road, Toronto. Webb also renovated another of Ms Sorbara’s properties at 53 Indian Grove, Toronto. In her counterclaim Ms Sorbara asks for an accounting of all amounts charged, paid and owing in respect of the renovation of both properties.
Two motions are before the court. In one motion Ms Sorbara asks the court for leave to add her spouse, Douglas Birkenshaw, as a plaintiff by counterclaim to this construction lien action and to amend her pleadings accordingly. The basis of the motion is that Mr. Birkenshaw is an owner of 53 Indian Grove and the accounting required in the 176 Glen Road construction lien action should include an accounting of the 53 Indian Grove renovation project. She argues that Mr. Birkenshaw is a necessary party to the 176 Glen Road litigation because of his involvement in 53 Indian Grove.
Webb’s motion, somewhat cumbersome in its wording, asks the court for an order “requiring the defendant, Ginger Sorbara, to assert her counterclaim insofar as it relates to an unrelated property at 53 Indian Grove, Toronto, in a separate action”. In essence, Webb asks the court to sever those portions of the counterclaim that pertain to 53 Indian Grove.
Webb asks in the alternative to amend its pleading and add a claim for the $7,900.00 owing for the 53 Indian Grove renovation, and to add Douglas Birkenshaw as a defendant in the construction lien action. Webb did not register a construction lien against 53 Indian Road.
The Construction Lien Act (the “Act”) is remedial legislation designed to provide for the summary resolution of construction lien disputes. Where the Act is inconsistent with the rules of civil practice, the Act prevails. Matters are intended to proceed expeditiously and in a summary manner. Interlocutory motions are not permitted without leave of the court and one of two tests must be met: the motion must be either necessary or must tend to expedite resolution of the issues in dispute. I am satisfied that these motions are necessary to expedite resolution of the issues in dispute. Leave is granted to bring the motions.
Webb’s motion to add a party and amend its claim
Subsection 55(1) of the Act provides that “A plaintiff in an action may join with a lien claim a claim for breach of contract or subcontract”. This section is a clear restriction on joinder of claims by the lien claimant. The meaning of “contract” and “subcontract” must be interpreted in a manner consistent with the purpose of the Act. To hold otherwise would lead to joinder of unrelated claims that have no essential connection to the lien claim that is the subject of the action.
Section 1(1) of the Act defines contract to mean: “the contract between the owner and the contractor” emphasis added. The issue is whether the contract in respect of the renovation of 176 Glen Grove, upon which the lien claim is based, includes the earlier contract in respect of 53 Indian Grove. There is insufficient evidence to support such a finding. I find that there is no jurisdiction under the Act for Webb to amend its claim to join with it a claim for breach of the 53 Indian Grove contract.
Mr. Birkenshaw, having no connection to the 176 Glen Road project, is not a necessary party to the action. Webb’s motion to add Mr. Birkenshaw as a defendant must fail. Webb’s recourse to collect amounts owing in respect of the 53 Indian Grove contract is to issue a separate action.
Ms Sorbara’s motion to add Mr. Birkenshaw as a plaintiff by counterclaim
Ms Sorbara asks for leave to add Mr. Birkenshaw as a plaintiff by counterclaim to assert a claim against Webb for overpayments in respect of the 53 Indian Grove contract. The parties agree that Mr. Birkenshaw is not an owner of 176 Glen Road and not a party to that contract.
Subsection 55(2) of the Act provides that:
“A defendant in an action may
(a) Counterclaim against the person who named the defendant as a defendant in respect of any claim that the defendant may be entitled to make against that person, whether or not that claim is related to the making of the improvement”
Webb did not name Mr. Birkenshaw as a party. Section 55(1) of the Act precludes Webb from adding Mr. Birkenshaw as a party for the purpose of joining a claim for monies owing in respect of the 53 Indian Grove renovation.
Because Mr. Birkenshaw is not named as a defendant in the construction lien action, and because the restrictions on joinder prevent Webb from adding him as a defendant, subsection 55(2) of the Act precludes him from being added as a plaintiff by counterclaim.
The rationale for these rules is that construction lien proceedings are summary in nature and streamlined to provide for the expeditious resolution of construction lien claims. The rules of civil procedure are supplanted by the summary procedures of the Act, interlocutory motions and appeal rights are curtailed and the ordinary rights and protection afforded the parties in civil actions are reduced or removed. Claims in construction lien proceedings may be expanded only where specifically permitted by the Act.
For these reasons Ms Sorbara’s motion to add Mr. Birkenshaw as a plaintiff by counterclaim is refused.
Webb’s motion to strike the portions of the Sorbara counterclaim pertaining to 53 Indian Grove
The remaining issue is whether Ms Sorbara’s counterclaim against Webb seeking an accounting of the 53 Indian Grove renovation project should be severed from the 176 Glen Road construction lien action.
Ms Sorbara argues that Webb is estopped from challenging the counterclaim because pleadings are closed and fresh steps have been taken, including obtaining a judgment of reference and order for trial. I disagree. Pleadings can be challenged at any stage of an action.
Webb relies on Clarke’s Electrical Service Ltd. v Gottardo Construction Ltd.[^1] where Justice Seppi considered the scope of issues that can be raised in a construction lien action. In that case subcontractor Clarke, the construction lien claimant, had joined with its lien claim action against the general contractor Gottardo, claims in respect of four other contracts between the parties. Justice Seppi cited Bagshaw v Johnston[^2] for the proposition that to allow a lien claimant to join claims in respect of other contracts with the claim in respect of the lien contract would deprive a defendant of the right to trial in the ordinary forum. In other words, the defendant would be compelled to defend in the summary process under the Construction Lien Act and would not have the benefit of the rights and protections of the rules of civil procedure.
The learned judge concluded that the lien claimant could not piggyback its non-lien claims on the back of an unrelated lien claim. To do so would constitute a subterfuge for processing an ordinary action by summary procedure.
Justice Seppi acknowledged that multiplicity of proceedings must be avoided but concluded that it must be done without compromising procedural or substantive fairness. He disallowed joinder by the lien claimant of other contract claims with the lien claim.
The Clark case is distinguishable. It dealt specifically with subsection 55(1) of the Act and joinder by a lien claimant of non-lien claims in contracts between the same parties. By contrast, the present case raises the issue of whether a defendant, in the counterclaim to a lien claim action, can include a claim arising from another contract and anther property involving the same parties.
Section 55(1) of the Act, which deals with the types of claims that a lien claimant may join with a lien claim, is clearly restrictive. Subsection 55(2), which deals with the scope of permissible counterclaims in a lien claim action, is not. It provides:
“55(2) A defendant in an action may counterclaim against the person who named the defendant as a defendant in respect of any claim that the defendant may be entitled to make against that person, whether or not that claim is related to the making of the improvement” emphasis added
The limitation in a counterclaim to a lien claim action is that it is confined to claims made against the party who named the defendant as a party to the litigation.
Webb also relies on the decision of Master Sandler in Pineau v Kretscher Inc.[^3] in support of its position that Ms Sorbara cannot, in this lien action, assert a counterclaim arising from the 53 Indian Grove renovation. In Pineau the plaintiff sought to join claims in tort and restitution against the defendant, contrary to subsection 55(1) of the Act.
Pineau is distinguishable. Joining additional claims against the defendant in tort with a lien claim is not the issue in the present case. The issue on this motion is whether Ms Sorbarra can assert a counterclaim in contract against the party to this action that named her as a defendant where the two contracts in issue were between the same parties for the supply of renovation services and materials, but in respect of different properties. Subsection 55(1) of the Act does not apply in these circumstances. Subsection 55(2) applies.
Webb also relies on Progressive Drywall & Interior Systems Inc. v Lombardo.[^4] In that case Justice Logan found that it was an abuse of process for the defendant Lombardo to bring an “eve of trial” motion to amend its pleading and add a counterclaim for negligence, and then upon the lien claimant abandoning its lien claim before trial, permitting the defendant to proceed with its counterclaim as a separate action. That case does not apply.
The portions of the counterclaim that Webb seeks to sever do not raise a claim in tort, negligence or restitution. Counsel for Ms Sorbara asserts that the contracts for the two properties overlap in timeframe and terms.
I find that the counterclaim as framed is contemplated and permitted by subsection 55(2) of the Act. Webb has not abandoned its lien claim, as was the case in Progressive Drywall. If Webb were to abandon its lien claim then the Progressive Drywall case would apply and the court would have to consider whether it would be an abuse of process to permit Ms Sorbara to proceed with her counterclaim as a summary claim under the Act.
Webb also argues that the counterclaim in respect of 53 Indian Grove should not be allowed to proceed because Webb will not have an opportunity to counterclaim in response to Ms Sorbara’s counterclaim and would thereby be precluded from asserting its claim for $7,900.00 in unpaid accounts.
I reject Webb’s argument on the basis that Webb, in defending the counterclaim against it, can plead set-off for the two final unpaid accounts that total $7,608.96 and thereby recover any amounts owing to it up to the amount of the counterclaim, to the extent that Ms Sorbara is successful in her counterclaim to that extent.
Conclusion
- For all of these reasons I find that Webb’s motion to sever Ms Sorbara’s counterclaim in respect of 53 Indian Grove fails. I further find that Ms Sorbara’s motion to add Mr. Birkenshaw as a plaintiff by counterclaim fails. Webb’s motion in the alternative to add Mr. Birkenshaw as a defendant fails. Cost submissions may be made at the hearing for directions scheduled for November 25, 2013.
Master C. Albert .
DATE: November 25, 2013
COURT FILE NO.: CV-12-470476
DATE: November 25, 2013
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: WEBB & LASHBROOK INC. v GINGER SORBARA and VALLICAN INVESTMENTS INC.
BEFORE: Master C. Albert
COUNSEL:
S. P. Valleau, for the plaintiff (defendant by counterclaim),
M. Handler, for the defendants (plaintiffs by counterclaim)
ENDORSEMENT
Master C. Albert
DATE: November 25, 2013
[^1]: 2001 CarswellOnt 1389; 9 C.L.R. (3d) 14
[^2]: (1901), 3 O.L.R. 58 (Ont. H.C.) cited in the decision of Master Clark in Con-Drain Co. (1983) Ltd. v Ronto Development Corp. (1995), 26 C.L.R. (2d) 23 (Ont. Master)
[^3]: 2004 CarswellOnt 6072; 42 C.L.R. (3d) 56
[^4]: 1991 CarswellOnt 815; 49 C.L.R. 141