OHL Construction, Canada, 2013 ONSC 7505

COURT FILE NO.: CV-12-462531

MOTION HEARD: 20130204

REASONS RELEASED: 20131231

SUPERIOR COURT OF JUSTICE – ONTARIO

In the Matter of the Construction Lien Act,

R.S.O. 1990, C. C.30, As Amended

RE:

Advanced Construction Techniques Ltd.
Plaintiff

• and -

OHL Construction Canada and
Fomento De Construcciones Y Contratas
Canada Limited Partnership, A Limited Partnership

And

York University
Defendants

BEFORE: Master D. E. Short

COUNSEL:
Andrew Heal Fax: 416-593-5437
for the Plaintiff

Harvey J. Kirsh Fax: 416-368-8280
for the Defendant, OHLConstruction Canada
and Fomento DeConstrucciones Y Contratas
Canada Limited Partnership,

R. Bruce Reynolds & Daniel Boad Fax: (416) 361-2741
for the sub-trade, Monir Precision

Awanish Sinha, Fax: (416) 868-0673
for the Defendant, York University

HEARD: Various Dates

REasons for Decision

Preamble

[1] York University was established in 1959 as a non-denominational institution by the York University Act which received Royal Assent in the Legislative Assembly of Ontario that year. Its first class was held in September 1960 in Falconer Hall on the University of Toronto campus with a total of 76 students.

[2] In the fall of 1961, York moved to its first campus, Glendon College, and began to emphasize liberal arts and part-time adult education. It became independent in 1965, under the York University Act, 1965. Its main campus on the northern outskirts of Toronto opened in 1965.

[3] York’s Undergraduate Calendar notes that:

“Established in 1969 Stong College is named for the pioneering Stong family, who came to this area from Pennsylvania in 1800 and farmed the lands upon which York University is built. Stong takes pride in its roots in a pioneer heritage, which finds its modern counterpart in the immigrants of today.

[4] Almost since the University’s inception, York students have been hoping for a rapid transit link to their main campus. Such a link is presently under construction. One of the stops on the new line was to be built under the existing Schulich School of Business, a short walk from Osgoode Hall Law School.

[5] Understandably there were concerns as to potential damage that might be caused to existing campus buildings by the tunnelling and construction process. To address that potential problem area a monitoring program was conceived and implemented.

[6] The lien claimant was retained to drill an array of bore holes to permit “compensation grouting” in the vicinity of the York Station site for the purpose of monitoring the effects of the subway tunnel boring. Ultimately serious problems developed with respect to that work.

[7] The "essential character" of the dispute between OHL/FCC and ACT is founded in ACT's claims for delay due to unforeseen or changed soil conditions, improper termination of the contract, and loss of profit. Together with OHL/FCC's defences and counterclaims relating to ACT's inability to perform the work for which it contracted, and relating to a drilling rig collapse which resulted in a fatality.

[8] At a point in time, after the rig collapse, the plaintiff was ordered off site and as a consequence brought a lien action for monies alleged to be owing, and in order to assert security on title in accord with the Construction Lien Act.

[9] The issues raised in this group of resultant motions are worthy of a law school exam question.

I. The Players

[10] This is somewhat of an unusual action in as much as it relates to the initial stages of the construction of an extension of the Toronto Subway to York University.

[11] A number of Major contracts were issued with respect to the construction of specific stations on the new line. The York station contract was awarded to a lengthily named entity “OHL Construction Canada and Fomento De Construcciones Y Contratas Canada Limited Partnership, A Limited Partnership” (Shortened to “ACC/FCC”).

[12] Advanced Construction Techniques Ltd. (“ACT”) performed work on the project and ultimately filed a Claim for Lien.

[13] The owner of the land upon which the lien claimant performed its work was York University.

[14] The general contractor, bonded off the lien from the university's property and York University is not a party to the continuing litigation.

[15] The Toronto Transit Commission (“TTC") is not named as a defendant in the lien action. The work was done in the vicinity of the Schulich School of Business on the York University campus and apparently was with respect to a subway station to be constructed in the vicinity of, or under that building.

[16] The TTC entered into a contract with OHL/FCC (the "TTC Contract") for construction related to the Extension dated February 2001. OHL/FCC then entered into a subcontract with ACT (the “Contract”) dated June 2, 2011, which included work to be done by ACT relating to tunnelling under the Schulich Building at York University. More specifically, ACT was to provide compensation grouting, which is intended to provide proper ground support for the Building, plus monitoring of the Building to ensure that the construction did not harm the Building.

[17] The new line is scheduled to be open for service in the fall of 2016. On documentation describing the project it is notes that “On completion of the project TTC will own, operate and maintain the new subway line.

[18] A title search discloses that the only owner or relevant entity registered on title with respect to any interest in the liened land is York University. A review of the parcel registers did not reveal the existence of any registered instrument whereby a third party was granted an interest in the York property.

(continues exactly as in the source document — all paragraphs [19] through [328] reproduced verbatim)

Master D. E. Short

DATE: December 31, 2013

DS/ R. 56