SUPERIOR COURT OF JUSTICE - ONTARIO
COURT FILE NO.: 13-58932
MOTION HEARD: March 27, 2014
RE: Petrelli Construction & Renovation Inc. and Mary Alberta Howitt Phillips et al
BEFORE: Master Pierre Roger
COUNSEL:
Martin Diegel, for the Plaintiff
Ph.: (613) 567-0235 Fax: (613) 567-1264
Ian McBride, for the Defendants
Ph.: (613) 233-4474 Fax: (613) 233-8868
REASONS FOR DECISION
This motion was not opposed by the plaintiff who filed no materials and did not appear at the motion. In addition, counsel for the defendants indicated that he spoke with counsel for the plaintiff, yesterday, and understood from that conversation that the plaintiff would not appear to oppose this motion. The plaintiff was paged at the outset of this motion.
After reviewing all of the documentation filed by the defendants and hearing the submissions of counsel for the defendants, this court agrees with most of the relief sought and signed an order: allowing the defendants’ leave to bring this motion; vacating the construction lien and certificate of action from title to the premises; ordering security for costs in the amount of $17,500.00 payable within the next 60 days with leave to bring an additional motion on this topic if and when this action is set down for trial; requiring the plaintiff to produce its financial records relating to the project and to answer all outstanding undertakings within the next 30 days, and for costs of this motion in the amount of $4,000.00 payable by the plaintiff to the moving parties within the next 30 days.
I am satisfied that this motion is necessary or will expedite the resolution of the issues in dispute such that leave to bring this motion should be granted. This motion certainly appears necessary to do procedural justice to both parties.
Subsection 44 (2) of the Construction Lien Act, R.S.O. 1990, c. C.30 provides that upon the motion of any person, the court may make an order vacating the registration of a claim for lien, and any certificate of action in respect of that lien, upon the payment into court or the posting of security of an amount that the court determines to be reasonable in the circumstances to satisfy the lien (emphasis added). It is clear that the court has discretion to determine an amount reasonable in the circumstances to satisfy the lien.
As indicated in the decision of Boehmers v. B.E. Project Managers Inc. (1993) 8 C.L.R. (2d) 51, the court can look not only at the gross amounts claimed as owing under the contract, but also at any proper setoffs which the owner might prove. Further, as indicated in Ledcor Construction Limited v. Canalfa Liberty Village Homes Inc. 2008 87009, the analysis on such a motion is quite similar to that on a motion for summary judgment.
The evidence submitted by the defendants on this motion is quite convincing regarding their defenses and setoffs. In fact, from that evidence, it appears that the plaintiff owes the defendants over $40,000.00. As indicated at the outset, the plaintiff did not file any evidence and did not attend at this motion.
The moving party has certainly satisfied this court, for purposes of this motion, that there is no genuine issue requiring a trial based on the evidence presented on this motion at least as it relates to the plaintiff’s claims. Consequently, it appears unlikely that there is any amount that could be claimed as a lien such that the appropriate amount, in the circumstances to satisfy the lien, on the evidence, is zero. As a result (no other liens are sheltering), the lien and claim for lien can be vacated with no payment into court or no amount posted as security.
On a motion by defendants seeking security for costs, the court may make such order for security for costs as is just where it appears that the plaintiff is a corporation and there is good reason to believe that the plaintiff has insufficient assets in Ontario to pay the costs of the defendants.
Rule 56.01(d) of the Rules of Civil Procedure establishes a two-step inquiry. First, the defendant must show that it appears that the plaintiff is a corporation and there is good reason to believe that the plaintiff has insufficient assets in Ontario to pay the costs of the defendant.
Then, under the second step of the inquiry, the burden shifts to the plaintiff to show that it has sufficient assets to satisfy an award for costs. Where the plaintiff fails to discharge this burden, the Court must still exercise its discretion, on a principled basis, and decide whether an order for security for costs would in the circumstances be “just.”
On the first step of the inquiry, the moving party is not required to establish with certainty that the plaintiff has insufficient assets – only that it appears so. To require more would not be fair, because the defendant would then have to prove something that is uniquely within the plaintiff’s knowledge. On the evidence presented, I am satisfied that the defendants have met in their onus.
In this case, the plaintiff did not file any materials and did not seek to rely on impecuniosity.
The amount and form of security and the time for payment into court is to be determined by the Court.
The Ontario Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.) at para. 26 explained some of the fundamental principles with respect to fixing costs as follows:
[T]he fixing of costs does not begin and end with a calculation of hours times rates. [T]he objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant.
In exercising its discretion, the court is mindful that it is fundamental to our justice system that, when appropriate and depending on the circumstances of each case, everyone should be able to have their day in court.
Considering all of the above, this is an appropriate case to order security for costs. Having considered the amount sought by the defendants and the principles outlined above, an appropriate amount is hereby established to be $17,500.00 to be posted by the plaintiff with this court within the next 60 days. These costs should cover the period up to when this action is set down for trial. Consequently, I have indicated on the order that leave is granted to return a motion on the issue of security for costs if and when this action is set down for trial.
Financial records sought and outstanding undertakings are relevant and must by answered within the next 30 days.
The defendants have been successful on this motion and I see no reason why they should not be entitled to their costs of this motion, which are fixed in the amount of $4,000.00 payable by the plaintiff to the moving parties within the next 30 days.
Master Pierre Roger
DATE: March 27, 2014