Court File No. 13-CV-475608
Date Heard: April 9, 2014
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE CONSTRUCTION LIEN ACT, R.S.O. 1990, C.c.30
B E T W E E N: )
21114 Ontario Inc. c.o.b. as ) M. Michael Title for the
GLASSTRADE ) plaintiff (moving party on cross-motion and responding party on main motion)
Plaintiff )
- AND - )
STADIA INDUSTRIES LTD., ) Michael Suria for the
KENAIDAN CONTRACTING LTD. ) defendant Stadia Industries Ltd.
and THE BOARD OF REGENTS OF ) (moving party on main motion, and
VICTORIA UNIVERSITY ) responding party on cross-motion)
Defendants )
Heard: April 9, 2014
MASTER SANDLER
[1] These Reasons deal with two motions. The first one is brought by the defendant Stadia Industries Ltd. (“Stadia”) to dismiss the plaintiff’s (“Glasstrade’s”) action against it by reason of the non-payment of a previous costs award of $9,000 ordered by Master Wiebe on June 13, 2013, and failing that relief, for a specific later date by which those costs must be paid, and if the action is allowed to continue, also for an order for $25,000 for security for costs. Stadia relies on Rule 57.03(2) dealing with the failure of a party to pay the costs of a motion ordered under Rule 57.03(1), and general Rule 60.12, and, for the alternative relief of security for costs, on Rule 56.01(i)(c) and (d).
[2] The second one is, actually, a cross-motion brought by Glasstrade for an order staying its own current action and further for an order “compelling Stadia...to proceed with arbitration pursuant to a Notice to Arbitrate delivered by …” Glasstrade and further for an order appointing a specifically named architect “as arbitrator”. There is no reference in this cross-notice of motion to any statutory provision or rule to be relied upon by Glasstrade, as required by Rule 37.06 (b), although the precise relief sought is set forth, as above-noted, as are the “grounds to be argued”, being mainly a reference to the arbitration provision in the construction sub-subcontract between Glasstrade and Stadia, (para. 21.4), and a reference to the said Notice to Arbitrate dated January 11, 2013 that was served on Stadia.
[3] This action, and a related Rule 14 and Rule 38 Application, court file # CV-13-479859, have had a rather convoluted procedural history, some of which must now be set out so as to understand how the two motions that are currently before me came to be before the court.
Early Dealings Between the Parties
[4] In September, 2011, Glasstrade entered into a written sub-subcontract with Stadia for the supply and installation of heritage windows for a renovation project at Victoria College, part of the University of Toronto. Stadia in turn had a sub-contract with the general contractor, Kenaidan Contracting Ltd., to supply and install all the doors, windows and glass products required for the renovation. Kenaidan had a construction contract with Victoria College for the entire project. Glasstrade got into several disputes with Stadia over the sub-subcontract, some of which were resolved after a first construction lien had been registered, by Minutes of Settlement dated October 23, 2012. Subsequently, more disputes arose between them and Glasstrade registered a second construction lien on December 20, 2012 for $188,710. This lien was subsequently perfected by the issuance of the statement of claim in the current action on March 6, 2013. This lien had been “bonded off” in the usual way by Stadia paying $235,887.50 into court as security for the lien and costs.
[5] The next procedural step was a motion by Stadia, started in late April, 2013, and originally returnable on May 13, 2013, seeking to discharge this lien, firstly, because it was said to be “grossly excessive”, and, secondly, because the appropriate representative of Glasstrade, its principal, Paul Bezodis, had failed or refused to attend for the permitted cross-examination on the claim for lien, and, failing that relief, for an order compelling Bezodis to attend for such cross-examination.
[6] The motion came before Master Wiebe on May 13, 2013 at which time Glasstrade sought an adjournment on various grounds. An affidavit of a law clerk in Glasstrade’s lawyers’ office, one Georgina Cairns, sworn May 8, 2013, was filed wherein she deposes that an adjournment of Stadia’s motion was required because Bezodis was out of town on business and wasn’t able to give his counsel, Mr. Title, timely instructions to respond to the motion, and also because Mr. Title, who was handling the file, was tied up in a public inquiry and his junior, Mr. Fulton, wasn’t ready to argue the motion, and further, because Glasstrade had just commenced an Application to judges’ motion court for a stay of the lien action and for an order compelling Stadia to participate in what was said to be a contractually-required arbitration and for the appointment of a particular arbitrator. Because of the pending Application, it was to be argued that Master Wiebe was without jurisdiction to hear Stadia’s motion or, failing that argument, that Stadia’s motion be heard after Glasstrade’s Application had been dealt with, if unsuccessful, which Application was scheduled to be heard on August 22, 2013. Master Wiebe ordered Stadia’s motion adjourned, but only to June 20, 2013, when he would hear argument on all the issues raised. He also made interim orders for the delivery of any further affidavits in support of, or in opposition to, the motion and for the conduct of any cross-examinations on any of the affidavits by specific dates prior to June 20.
[7] As noted above, Glasstrade had commenced a Rule 14 and 38 “Application”, court file # CV-13-479859, on May 7, 2013, returnable August 22, 2013, for the relief above-noted. This Application was motivated by reason of the refusal of Stadia’s counsel to agree to mediate and/or arbitrate the current disputes between Glasstrade and Stadia in accordance with the dispute resolution provisions in the sub-subcontract. During several days in August, 2013, prior to the original return date of this Application, counsel for Glasstrade and Stadia exchanged e-mails about having the Glasstrade Application “transferred” to what they called the “Construction Lien Masters' Court”, to be heard by a construction lien master in the construction lien action, file # CV-13-475608, and, from the material filed before me, there seems to have been agreement that this was to be done by Mr. Title’s office, and there seems to have been some sort of “Confirmation of Application” document filed by Mr. Title’s law clerk with the judges’ motion court office in an attempt to effect this “transfer”.
[8] Returning to Stadia’s original discharge/dismissal motion, Master Wiebe on June 13th had before him Stadia’s original motion record with a supporting affidavit of Stanley Citrin, one of Stadia’s project managers for the Victoria College project, sworn April 26, 2013, a second Citrin affidavit sworn June 4, 2013, an affidavit of Sean Kelly of Kelly Construction Services, another sub-trade of Stadia, sworn May 31, 2013, supporting what Citrin had sworn to about Glasstrade’s claim, and a responding affidavit of Paul Bezodis, sworn, May 24, 2013, recalculating Glasstrade’s lien claim, and agreeing to a reduction of $65,495.93 in the security posted by Stadia for part of its claim and part of its costs, but asking that the remainder of the posted security for its lien claim and costs remain in court pending the final resolution of the lien action following the conclusion of the sought-after arbitration and depending on the result thereof. Both Glasstrade and Stadia were represented at the June 20th hearing before Master Wiebe by Messrs. Fulton and Binavince, respectively. Master Wiebe noted in his written endorsement on the motion record that the motion was then “unopposed” and that the order that he was being asked to sign and did sign was to provide that the plaintiff’s lien was ordered discharged and that the entire posted security of $235,887.50 was to be returned to Stadia, and that Glasstrade was ordered to pay Stadia its costs of the motion fixed at $9,000. The formal order to that effect was signed by Master Wiebe that day and was entered on June 21, 2013.
[9] Stadia’s current dismissal-for-non-payment-of-costs motion was prepared in very early November, 2013 and served on November 4 and – (a motion record and then an amended notice of motion) – returnable November 13, 2013. The affidavit in support of this motion was sworn by an associate lawyer in the new law firm, Levy Zavet, that Mr. Binavince had recently joined, (one Maheen Merchant, sworn November 4, 2013), which sets out the history of Glasstrade’s lien proceedings, (all as above-noted), and the failure of Glasstrade, since June 20, 2013, to pay the awarded costs notwithstanding many demands, and how on the day of the original return date of Glasstrade’s Application, on August 22, 2013, the Glasstrade’s law firm apparently took some steps administratively to try and transfer the Application, returnable before a judge, to a construction lien master, to an agreed date of October 16, 2013. This misguided attempt to transfer, not surprisingly, failed – (the exact details as to what occurred are not clear) – but Mr. Binavince found out on October 17, 2013 about this failure and advised Mr. Fulton, who was assisting Mr. Title, that he would be launching a “motion in the Application seeking an order that the plaintiff pay the $9,000 costs award, and that the Application be dismissed without prejudice to [the plaintiff] bringing a motion in the lien action for an order that the parties be required to attend at mediation”. He also again raised the idea that the pending Application be adjourned to a construction lien master,(Master Wiebe was named in particular—why, I don’t know), to be heard “by way of motion in the lien action”. Stadia’s dismissal-for-non-payment-of-costs motion, following its filing in early November, was scheduled by the construction lien office staff to be heard, in accordance with the normal procedure in contested construction lien motions court, for Wednesday, November 13th, and it came before me that day.
[10] Both Mr. Title, and Mr. Suria, a junior lawyer in Mr. Binavince’s office, appeared before me that day. Mr. Title was seeking an adjournment as the motion had only been served on his firm the previous Wednesday and he wanted to file response material to oppose the Stadia’s dismissal motion.
[11] Mr. Title also advised that he now wanted to commence a “motion”, ( not an “application”), for a stay of his lien action under s. 106 of the Courts of Justice Act and/or s. 7(1) of the Arbitration Act, 1991. I reminded Mr. Title that this action was no longer a lien action by reason of the order of Master Wiebe but because there was a direct contract between Glasstrade and Stadia, the contract claim was still alive but, on June 20th, neither counsel had asked Master Wiebe for directions on how the contract claim was to continue, and Master Wiebe did not, unfortunately, address this issue and I pointed out that I would address this remaining issue when I finally heard Stadia’s motion and Glasstrade’s intended cross-motion.
[12] I was informed by Mr. Suria that if and when Glasstrade brought on its stay motion, he would argue that Glasstrade, having started this action, could not thereafter seek to proceed by way of arbitration under the arbitration clause in the sub-subcontract, and that, in any event, Glasstrade did not have the legal right, under the provisions of section 7(1) of the said Act, to seek to stay its own proceeding. Further, Glasstrade wanted to proceed with its own counterclaim, (more about this counterclaim later), in this present action. These would all be issues to be decided once Glasstrade’s proposed cross-motion was properly brought before the court.
[13] Mr. Title alerted me to what his response was going to be to Stadia’s dismissal-for-non-payment-of-costs motion, namely, Glasstrade’s, and its principal’s, impecuniosity, but, of course, there was no evidence about this then before me. Since this action was no longer a lien action so that the time limits in sections 37, 45 and 46 no longer applied, I saw no urgency to deal with the Stadia’s motion or the Glasstrade’s proposed cross-motion. I was willing to give the Glasstrade some more time to arrange payment of the $9,000 costs award and, failing payment, I would hear the merits of the Stadia’s dismissal motion, and if successful, I would then give directions with respect to what was said in the material to be the Stadia’s counterclaim, pursuant to Rule 57.03(2), which directs the court to “make such other order as is just”. I expressed the preliminary view that Rule 24.03, (dealing with the effect on a counterclaim of a dismissal of an action for delay might apply by analogy, (Rule 1.04 (2)), if the entire main action was dismissed.
[14] I thus adjourned Stadia’s motion to April 9, 2014 back before me which was my earliest available date, with a further order that any response affidavit by Glasstrade about the non-payment of the $9,000 costs, and any new “stay” cross-motion by Glasstrade, with supporting evidence, had to be properly served and filed, as well as any further material to be relied on by Stadia, well before April 9, 2014, so that I would have all the material for both motions that day.
[15] Stadia, in February, 2014, delivered a Supplementary Motion Record containing an affidavit of Julian Binavince sworn, served and filed on February 14, 2014, dealing with the history of the lien action from October 12, 2012 to June 20, 2013, ( as above-described), and with the history of the Glasstrade’s Application, (above-described), and with the history of Stadia’s dismissal-for-non-payment-of-costs motion, from October 18, 2013 up to the hearing date before me on November 13, 2013. The last paragraph of this affidavit says it is in support of Stadia’s motion to dismiss the plaintiff’s claim and “to contest the plaintiff’s adjournment request”. It is important to note that this affidavit was sworn February 13, 2014, well after the November 13, 2013 first hearing date of the Stadia’s motion by me and about two months before the fixed future hearing date of April 9, so I assume that Mr. Title had, sometime prior to February 14, 2014, told Mr. Binavince that he would, on April 9, be seeking a further adjournment of Stadia’s dismissal motion.
[16] A further affidavit of Bezodis on behalf of Glasstrade, sworn April 3, 2014, and served and filed on April 3, 2014, is in the material before me. In it, Bezodis refers to Stadia’s motion, and Glasstrade’s cross-motion for a stay and for an order to compel Stadia to participate in the sought-after arbitration. (He deposes that both motions came before me on December 13, 2013 but this is wrong; the correct date was November 13, 2013 and there was then only one motion as above-noted.) He further deposes that his current affidavit is made in support of Glasstrade’s request for yet another adjournment of both motions currently returnable April 9. He then describes his wife’s illness and hospitalization and says he cannot attend to these motions because he needs to attend to his wife’s care. He further deposes that he needs more time to try and raise the money to pay the $9,000 costs. He deposes that his wife hasn’t worked for a year and he has had to take time off work to attend to the needs of his family and there is no family income available to pay the costs award. He wanted Stadia’s dismissal motion, and Glasstrade’s stay/arbitration cross-motion, adjourned indefinitely.
[17] Stadia filed a Factum and Brief of Authorities on April 4 in support of its dismissal motion.
[18] A further volume in the court file before me is a motion record of Glasstrade, returnable April 9, 2014, marked “Re Arbitration”. This motion record, on the front cover, shows a preparation date of “November 14, 2013”. The preparation date shown on p.4 of the formal Notice of Motion in this motion record is “November 12, 2013”. The motion is supported by yet another affidavit of Bezodis sworn “May 3, 2013”, about one year earlier. This twenty-two paragraph affidavit sets out, inter alia, a brief history of the dealings between, and the dispute between, Glasstrade and Stadia from September, 2011 to December of 2012, and how Glasstrade had been trying, unsuccessfully, since January, 2013, to get Stadia to deal with their dispute by way of arbitration, and how it served a Notice to Arbitrate on January 11, 2013 in accordance with paragraph 21 of their sub-subcontract, and how it was always Glasstrade’s intention to take their dispute to arbitration but, to preserve its statutory right to a lien, a claim for lien was registered on title on December 20, 2012, and how it was later necessary to start its lien action to perfect its lien. Bezodis then deposes that his lawyers had not demanded a statement of defence from any party but that Stadia had delivered what he called a “Statement of Defence and Counterclaim” but Glasstrade has not delivered a reply and defence to counterclaim because of its request to have the dispute arbitrated.
[19] In this affidavit, there is yet more history of the disputes between Glasstrade and Stadia, and of the unsuccessful efforts to go to arbitration, and of the history of earlier contractual disputes between these parties in 2012 which generated an earlier claim for lien, and how that dispute was resolved by Minutes of Settlement dated October 23, 2012, and how paragraph 7 of these Minutes provided, inter alia, that with respect to Glasstrade’s other outstanding claims for change orders and extras in the amount of $63,651.19, the two parties would “cooperate in order to resolve the Glasstrade claims including, but not limited to, engaging the mediation/arbitration process under the dispute resolution provisions of their contract…”.
[20] Bezodis then deposes, in para. 14 of this affidavit, that Stadia has not abided by the terms of these Minutes of Settlement which contemplated that an arbitration process would follow. He further deposes that additional disputes have arisen since October, 2012, which led to the current lien claim and the current demand by Glasstrade to proceed to arbitration to resolve all these disputes.
[21] Mr. Title explained the mystery of the three dates that appear on this Motion Record, namely, April 9, 2014, November 14, 2013 and November 12, 2013, and the date that the Bezodis affidavit was sworn, namely, May 3, 2013, by indicating that the Bezodis affidavit was prepared in support of his initial judge’s Application returnable August 22, 2013.
[22] The original copy of this Notice of Application (that was not proceeded with) is in the material before me-(see Glasstrade’s Responding Motion Record dated May 8, 2013 responding to Stadia’s above-noted discharge-of-lien/dismissal-of-action motion originally returnable May 13, 2013, at Tab 1, pp. 22-28). This Notice of Application indicates that the evidence that would be used at the hearing of this Application was to be the “affidavit of Paul Bezodis sworn May 3, 2013”, the very same affidavit that is now again before me on Glasstrade’s current cross-motion. The dates of “November 14, 2013” and “November 12, 2013” on Mr. Title’s current cross-motion record may possibly be explained on the basis that he started to prepare the material for this cross-motion” the day following my original hearing of Stadia’s dismissal motion on November 13, 2013. On the other hand, maybe it is just another mistake.
[23] This current cross-motion seeks an order “staying action CV-13-475608”, the present action, and a further order “…compelling Stadia … to proceed with arbitration …” and “…an order appointing John G. Davies … as arbitrator”. This is the exact same relief that was requested in paragraphs 1 (a), (b) and (c) of Glasstrade’s original Notice of Application to judge’s motion court.
[24] At the opening of the hearing on April 9, Mr. Title decided, after hearing my preliminary views on some of the procedural problems that I saw with his cross-motion, to abandon his request to have both motions further adjourned and agreed to argue the merits of both motions. Since he was, as part of his submissions, asking for yet more time for his client to pay these costs, his original request for an adjournment of both motions for an unspecified “period of time”, (as it was described in his material), really amounted to a request for more time to pay so this is why he decided to argue against Stadia’s motion on the merits.
[25] I will now firstly deal with the Glasstrade’s cross-motion for a stay and for an order to compel Stadia to participate in the arbitration and to appoint a specifically-named arbitrator. I will secondly deal with Stadia’s above-described main motion.
Rulings on Glasstrade’s Cross-Motion
[26] The first problem I see with the “stay” part of Glasstrade’s cross-motion is whether or not a master has jurisdiction to make such an order. Glasstrade relies on s.106 of the Courts of Justice Act, and s. 7(1) of the Arbitration Act, 1991, S.O. 1991, c.17. In each statutory provision, there is reference to “a court” or to “the court in which the proceeding is commenced”, and both provisions provide that the power to stay can be exercised by “motion”. Thus, under Rule 37.02(2), a master has jurisdiction to hear such a motion as the master’s jurisdiction is not taken away by any of sub-rules (a) through (g) of Rule 37.02(2). No objection to my jurisdiction was raised by Mr. Suria but I felt there was a jurisdictional issue here that had to be considered. I also note that Master Short in the recent case of Advanced Construction Techniques Ltd. v. OHL Construction Canada (2014), 2013 ONSC 7505, 27 C.L.R. (4th) 213, at p. 279, para. 316(b) made an order staying the lien action there, although again, his jurisdiction as a master to hear such a motion was not raised by him or by counsel or argued.
[27] The next question is whether a stay ought to be granted in the circumstances here. It must be remembered that Glasstrade always wanted to proceed to arbitration and only commenced the lien action to protect its lien rights for future enforcement of any money award that it might be awarded in the arbitration if Stadia, after any such award, failed or refused to pay it.
[28] The relationship between arbitration proceedings and lien proceedings in Ontario has been considered, inter alia, in the cases of Automatic Systems Inc. v. Bracknell Corp. (1994), 1994 CarswellOnt. 226; 1994 1871 (ON CA), 13 C.L.R. (2d) 171; 18 O.R. (3d) 257 (Ont. C.A.), and by Master Short in the Advanced Construction case, supra, at pp. 261-262 and again at pp. 275-276 under the heading “Terms of the Stay”. See also Duncan Glaholt’s “Conduct of a Lien Action, 2013”, at pp. 509-510, beginning, at the last paragraph on p. 509, with the words “Lien claims can be arbitrated”. In summary, these authorities provide that where parties to a construction contract have agreed to arbitrate, the party claiming to be owed money can start a lien action to preserve its lien rights and then a court can, if requested, stay the lien action until the arbitration is completed, and then the lien claimant can return to the lien action, if necessary, to enforce any award. Further, the court hearing the stay motion can make whatever interim orders are required to preserve the lien from expiry under ss. 37, 45 or 46 of the Construction Lien Act such as allowing the action to be set down for trial or allowing a trial date to be fixed notwithstanding the stay. Accordingly, the relief requested by Glasstrade can, in theory, be granted, but would be subject to the next procedural problem which concerns me which is as follows.
[29] It is the question of who, under s. 7(1) of the Arbitration Act, is entitled to bring the stay motion. The section provides that if a “party to an arbitration agreement commences a proceeding” that is supposed to be submitted to arbitration, (and this will, in a lien action, always be the plaintiff), then “the court … shall, on the motion of another party to the arbitration agreement, (this will always be a defendant in the lien action), stay the proceeding.” (my emphasis) So the question arises as to whether a plaintiff in a lien action (here, Glasstrade) can move to stay its own action since it is not “another party” but rather, the party who commenced the proceeding. At the original hearing before me on November 13, 2013, when Mr. Title informed me that he would be bringing on his stay motion, Mr. Suria advised me that he would be arguing, inter alia, that s. 7 (1) did not permit Glasstrade to move to stay its own action. On April 9, when I finally heard that this cross-motion on its merits, both counsel never had an opportunity to argue this issue because I advised them during their early presentations, as set out herein, that I would be dismissing the plaintiff’s entire action pursuant to the discretion I had under s. 47 of the Construction Lien Act. But I feel it is necessary to set out my view on this issue in case of any appeal, and for the benefit of both counsel, since it was an issue that at least Stadia’s counsel wished to address.
[30] There is nothing helpful on this issue in Mr. Suria’s Factum that he filed but I have discovered a few helpful cases that deal with this issue.
[31] The first helpful case is Penn-Co. Construction Canada (2003) Ltd. v. Constance Lake First Nation (2008), 66 C.L.R. (3d) 78, (Ont. S.C.J. - H.M. Pierce J.). This was a motion by the plaintiff “…for a mandatory order requiring the defendant to proceed with [the] contractual dispute resolution process.” There was a construction contract entered into between the parties, in June, 2003, for the building of a school. The work was supposed to be completed, by November, 2004, but there were delays. The parties got into disputes over the delays, and over payments and other issues, and construction stopped in February, 2006. Penn-Co. left the site and the owner purported to terminate the contract in September, 2006. The parties attempted to set up a mediation/arbitration process in the period December, 2005, through May, 2006, as the contract contemplated, but the process collapsed. In January, 2007, Penn-Co. started a $ 2 million action, claiming damages against the owner, plus other damages against other parties. Pierce J. held that “…the plain wording of s. 7 (1) precludes a party to an arbitration agreement that has commenced a proceeding from moving for a stay of the proceeding. The Act clearly limits such applications to an opposite party.” The rationale for this ruling is set out at p. 84, para. 25. The court ultimately ruled that Penn-Co. had no standing to apply for a stay of the proceeding because it had commenced the action.
[32] The court also went on to consider whether any of the factors set forth in s. 7 (2), especially s. 7 (2) 3, would justify a refusal of a stay and it found that there were. Accordingly, it dismissed Penn-Co.’s motion which, as I have noted above asked “…for a mandatory order requiring the…owner to proceed with contractual dispute resolution”. I observe that this is not what s. 7 (1) says a court is empowered to do but that issue was not discussed in this judgment, probably because the court found that Penn-Co. had no standing to apply for any relief under s. 7 (1).
[33] Penn-Co. appealed the denial of its motion to the Court of Appeal whose judgment is reported at (2008), 2008 ONCA 768, 76 C.L.R. (3d) 1, [2008] O.J. No. 4523. Before the Court of Appeal, Penn-Co. “conceded” that there is no authority in the Arbitration Act for the relief it sought. In that court, it invoked ss. 101 and 106 of the Courts of Justice Act. The Court of Appeal held that it saw “no error on the part of the motions judge that would entitle [the] court to intervene.” It held that even if the proper basis for Penn-Co.’s motion was ss. 101 and 106, as Penn-Co. now contended, the motions judge’s reasons for refusing to compel an arbitration were equally valid, her discretion had been properly exercised, and there was no error of principle that would justify the appellate court in interfering with that decision.
[34] The next somewhat helpful case on the proper procedure to be used is Brock University v. Stucor Construction Ltd., (2004), 33 C.L.R. (3d) 182 (Cavarzan J.). That case involved a construction dispute between Stucor as general contractor and Brock University as owner. Stucor had started a construction lien action in June, 2001. A year later, Brock launched a Rule 38 “application” for an order appointing a specified person to act as project mediator pursuant to the dispute resolution provisions in their contract and also, in that application, sought an order staying Stucor’s lien action pursuant to s. 7 (1) of the Arbitration Act. Stucor resisted Brock’s application mainly on the bases (a) of undue delay by Brock in moving to stay the action relying on s. 7 (2) 4 and (b) that Brock had waived its right under the contract to invoke the dispute resolutions provisions. Those issues do not relate to the procedural issues before me.
[35] But Stucor also raised some procedural issues, one of which was that it was an abuse of process to seek a stay of the lien action under s. 7 (1) by initiating a separate “application” under Rules 14.05(1), (2), and (3) and Rules 38.01(1), 38.04 and 38.05, and this request for a stay ought to have been brought as a “motion” in the existing construction lien action. Cavarzan J. seems to have ruled that the request for a stay can be brought either way. He noted that Ontario courts have regularly entertained “applications” under the Arbitration Act to stay lien actions and cited five cases at pp. 189-190 of his judgment as examples.
[36] He also quoted and relied on a passage from the text, Macklem and Bristow, Construction, Builders’ and Mechanics’ Liens in Canada, 6th Ed., at p. 10-43, which says that “The application to stay the mechanics’ lien proceeding must be brought before the ‘Court’ referred to in the Arbitration Act and not before the Mechanics’ Lien Court.” This quotation would seem to suggest that there is one “court” that is proper to be used and another “court” that is not. But the 6th edition of this text has now been superseded by the 7th edition called Construction, Builders’ and Mechanics’ Liens in Canada, by Bristow, Glaholt, Reynolds and Wise, first published in 2005, well after Cavarzon J.’s judgment. I have reviewed the contents of chapter 10 in this text, entitled “Jurisdiction”, at para.’s 10.14 and 10.14.1 to 10.14.4, dealing with the topic of “Arbitration Clauses” and there is no statement in this current edition about in which court, or to whom, or by what process, the power under s. 7 (1) is to be invoked.
[37] Cavarzon J. also noted that the applying party, Brock, was also relying on Rule 14.05 (3)(d) as a basis for its request and that the jurisdiction under this rule had to be invoked by an “application” under Rules 14 and 38 and that it would have been improper to require Brock to bring a motion in the construction lien action for a stay and a separate application under Rule 14.05 (3)(d) for the order appointing, in that case, the project mediator, or, as is more often the case, a specific arbitrator. I note that no reference was made by Cavarzon J. to s. 10 (1) of the Arbitration Act that I deal with later in these reasons.
[38] While the Brock case is somewhat helpful on some of the procedural issues that are raised by this case, it does not deal with one of the central questions, namely, who can invoke the jurisdiction under s. 7 (1), and, more particularly, whether Glasstrade as plaintiff can.
[39] The next case that deals with this issue is Master Short’s decision in the Advanced Construction case, supra. There, the defendant OHL was arguing that Advanced Construction, as a plaintiff, had no legal right to invoke the jurisdiction in s. 7 (1). Counsel for OHL argued that the section explicitly provides that the motion is to be brought by “another party” other than the party who commenced the proceeding.
[40] Master Short first held, at p. 253, para.’s 196-197, that Tricin Electric Ltd. v. York Region District School Board, 2009 CarswellOnt 2452 (Ont. S.C.J.), a case that was cited to him by OHL’s counsel, didn’t exactly rule on this issue.
[41] He next dealt with the Penn-Co case, supra, that was also cited to him by OHL’s counsel. He said he “disagreed” with that counsel’s submission which relied on the ruling in the Penn-Co case to argue that Advanced Construction, (ACT), did not meet the circumstances contemplated and permitted by s. 7(1) of the Arbitration Act and thus had no standing to bring its motion for a stay of its own action.. Since this submission was based directly on the ruling of the court in Penn-Co, it seems to me that Master Short was, indirectly, also disagreeing with that ruling, which I would have thought was binding on him. (It also does not appear that the appeal ruling, above-noted, of the Court of Appeal in the Penn-Co case, was brought to his attention.)
[42] Master Short expressed a different interpretation of s. 7 (1), namely, that the section “…does not say that the court cannot stay an action on a plaintiff’s motion but rather says that in the case of a defendant’s motion, the court shall stay the action to permit the arbitration to proceed”. (Master Short’s emphasis)
[43] But Master Short then goes on to consider s. 106 of the Courts of Justice Act which has no such limitation on who can seek a stay.
[44] In the final result, Master Short held that the plaintiff there could move to have its own lien action stayed to permit a contractual arbitration to take place. It is not clear to me from his reasons whether he relied on s. 106 to do this or whether he simply “disagreed” with the ruling in the Penn-Co. case and relied on his own interpretation of s. 7 (1). Perhaps, I am not understanding the basis of his ruling.
[45] The last case to rule on this issue is the recent case of Bondfield Construction Co. v. London Police Services Board (2014), 26 C.L.R. (4th) 310 (Ont. S.C.J.). In that case, there was a construction contract between the parties, the contract had a mandatory arbitration provision for resolving disputes, Bondfield had tried to arrange an arbitration but was unsuccessful, and then started an action for damages for delay. The defendant Board delivered a statement of defence and counterclaim. Bondfield then moved for a stay of its own action with the objective of compelling the Board to return to the arbitral process to resolve its delay claim.
[46] Bondfield relied on both s. 7 (1) of the Arbitration Act and s. 106 of the Courts of Justice Act. Hockin J. ruled that because of the wording of s. 7 (1), the ability to move to stay was limited to “another party” to the agreement and could not be brought by the party who initiated or “commenced” the proceeding. He held that only the defendant Board could move under s. 7 (1) for a stay. However, he granted the stay, using the power granted to a court under s. 106.
[47] In fairness to Master Short, I note that this case was decided on July 12, 2013 while Master Short had his decision under reserve and that it is to be expected that it never came to his attention.
[48] Because I am ruling below, at para. 58 of these reasons, that there will be no remaining action, I do not have to decide this question of whether Glasstrade can use s. 7 (1) to seek to stay its own action. The weight of authority seems to be that it cannot. But other courts have gotten over this hurdle by referring to, and in some cases using, s.106 so, in the last analysis, this problem doesn’t seem, at least to me, to matter.
Should the Remaining Contract Action Be Allowed To Continue?
[49] Another problem that Mr. Title faces here is that the lien portion of this action no longer exists. That in lien actions between contracting parties, there is both a lien claim and an ordinary contract claim, was recognized by the Court of Appeal in Teepee Excavation & Grading Ltd. v. Niran Construction Ltd., (2000), 49 O.R. (3d) 612; 2000 3447 (ON CA), 4 C.L.R. (3d) 193 (C.A.) which approved the earlier cases of Eurocor Ltd. v. Vernich; Golden City Ceramic and Tile Co. v. Iona Corp.; Mast Construction (Ontario) Ltd. v. Appleton; and 612354 Ontario Ltd. v. Tonecraft Corp.; (all to the same effect and all of which are fully cited in the Teepee case).
[50] In the present case, there should have been a consideration by Master Wiebe of how the remaining contract claim was to proceed, i.e., how the court’s discretion under s.47, that was discussed in the Teepee case, was to be exercised. Unfortunately, neither counsel on the unopposed motion before Master Wiebe dealt with this issue so Master Wiebe, understandably, also did not deal with it. But the issue must be dealt with by some court and I rule that I have the obligation and the right to consider this question of the exercise of the discretion that exists under s.47 and to decide if, and if so how, the contract claim is to continue and how it is to be tried.
[51] I pause to note that the procedural regime has significantly changed since the Teepee case was decided. Now, in cases where the lien has been declared expired, well before trial, pursuant to a motion under ss. 37, and 46(1) of the Construction Lien Act because of the passage of the two-year time limit in s. 37, a court hearing such a motion must not, as one of its possible options, dismiss any remaining contract action. This is because the now shorter two-year limitation period under the Limitations Act, 2002, would, on such a motion, always have passed so the plaintiff would not be able to validly start a fresh action. This was made clear in 1339408 Ontario Inc. v. 1579138 Ontario Inc. (2007), 71 C.L.R. (3d) 13 (Ont. Div. Ct.). Later reported cases have shown that, in such a case, the court could transfer the contract action to the Small Claims Court if the claim was under $25,000, or it could direct that it proceed as an ordinary Superior Court action but possibly be governed by the Rule 76 Simplified Procedure if the claim was between $25,000 and $100,000, or it could direct that it proceed as an ordinary action and be governed by the general Rules of Civil Procedure without any reference to the Simplified Procedure if the claim was in excess of $100,000, or it could even direct that the contract claim would continue within the framework of the statement of claim in the now-dismissed lien action, with judgment to be given pursuant to s. 63, and still to be governed by the procedure under the Construction Lien Act, and, in particular, procedural sections 51-63, 67, and 71. If this last option were chosen by the court, then, outside of Toronto and Ottawa, the trial would be before a Superior Court judge. In Toronto and Ottawa, where there are masters who hear construction lien cases, the trial would be tried by a judge, unless a judgment of reference to a construction lien master was made under s. 58 of the Act, which would probably be the preferred forum for the trial. In the present case, the lien has been discharged and, accordingly, the lien claim has disappeared. But very importantly, the motion before Master Wiebe was not based on s.37 and 46(1). Rather, the motion was based on the proposition that the lien was “grossly excessive” and that the plaintiff’s representative had failed to attend for cross-examination on the lien. But Master Wiebe was not asked to rule on the merits of these issues as to whether an allegedly “excessive” lien could be a ground for “discharge”, or whether failure to attend for cross-examination, once, could be a ground for discharge. Rather, it seems to me that he must have exercised his jurisdiction to discharge, relying on s.47, namely, “upon any proper ground”, keeping in mind that counsel for the lien claimant advised Master Wiebe that he was not opposing Stadia’s motion. Since s.47 was the only possible basis for the order discharging the lien, there was then a residual discretion to be exercised, (as noted in the Teepee case), as to how the remaining contract claim was to be pursued.
[52] During argument, I particularly asked both counsel whether they thought the 2-year limitation period under the Limitation Act, 2002, had passed and both agreed that it had not. The lien was registered December 20, 2012, so two years from that date is December 20, 2014. The claim for lien (attached to the statement of claim) states that the last work done was December 18, 2012. The claim is for the balancing owing under the contract, and for the 10% holdback of $55,348.81, and for three major extras of $63,900, $47,460 and $22,001.19. It thus seems that the cause of action arose on or sometime after December 18, 2012 when the plaintiff last supplied services or materials and so this must be why counsel for Stadia, in particular, stated to me that the limitation period for Glasstrade to start a fresh contract action had not passed.
[53] This being the case, the question arises as to how I should exercise this discretion, before I deal with Glasstrade’s still-pursued request to stay its now non-lien contract action. In my view, this remaining contract action now serves no purpose. It was only started to preserve Glasstrade’s lien rights. Those lien rights no longer exist. Glasstrade wants to proceed with an arbitration to resolve the contract disputes, and the remaining parts of its current cross-motion are to compel Stadia to participate in the desired arbitration and to have the court appoint an arbitrator. If it is ultimately successful in this effort, then the arbitration will proceed. If it is unsuccessful, then it can always start a fresh Superior Court contract action claiming $188,710 provided that it starts such an action before the limitation expires.
The Defendant’s Counterclaim as a Factor to be Considered in Exercising My Discretion
[54] In reading the various affidavits before me, including the attached e-mails between counsel from January, 2013 to October, 2013, it becomes clear that Stadia wants this action to continue so it can pursue its counterclaim against Glasstrade. But there is yet another procedural problem which I only discovered as I prepared these reasons after having reserved judgment on the motion. In Glasstrade’s Supplementary Responding Motion Record, responding to Stadia’s original motion to discharge Glasstrade’s lien, which is in the material before me as I have noted earlier, at Tab 4, p. 88, is Stadia’s “Statement of Defence and Counterclaim” which shows Mr. Binavince as the lawyer of record for Stadia. (This was before he joined Levy Zavet, the current lawyers of record for Stadia.) This pleading is dated March 21, 2013. This “counterclaim” claims “damages of … $350,000” for breach of contract and negligence in relation to the work performed, and not performed, by Glasstrade. If this counterclaim does, in fact, exist, and keeping in mind Stadia’s desire to have its “counterclaim” tried in the remaining part of this current action, (i.,e., in court file # CV-13-475608), this would normally be a factor to be taken into account in exercising my said discretion under s. 47.
[55] However, I have now retrieved and examined the entire court file from the court office. This examination reveals that the only response by Stadia that was filed, to Glasstrade’s Statement of Claim, is a Statement of Defence, without any counterclaim, also dated March 21, 2013, which shows Mr. Binavince as lawyer of record for Stadia. The affidavit of service attached to this pleading, sworn by Mr. Binavince on May 1, 2013 and filed, shows that he served Mr. Title, Glasstrade’s lawyer, with this document on March 22, 2013. Also attached to this affidavit of service as an exhibit is an e-mail from Mr. Binavince to Mr. Title of March 22, 2013, attaching what he calls his client’s “statement of defence and counterclaim”. Also attached as an exhibit to this affidavit of service is an e-mail from Mr. Title of April 3, 2013, acknowledging receipt of the “Statement of Defence and Counterclaim” and his planned intention to review it with a view to delivering a complete reply and defence to counterclaim. It seems clear from all of the above that Mr. Binavince served one document, a Statement of Defence and Counterclaim, and filed another different document, being just a Statement of Defence.
[56] Further, the Complete Case History Report concerning this court file, that I obtained on April 24, 2014, only shows a Statement of Defence being filed on May 2, 2013, and shows no other pleading having been filed. From May 2, 2013 onwards, this Case History Report just shows the various motions brought by the defendant and all the various motion records and other material filed, as above-noted. All of the above-referenced material demonstrates that there is, in fact, no counterclaim validly instituted in this action. Rule 27.04(1) makes it clear that a statement of defence and counterclaim must be “delivered” as prescribed by Rule 18.01 which again uses the term “delivered”. As is well known, the words “deliver” and “delivered” in the Rules means “served and filed with proof of service” – see Rule 1.03(1) where the word “deliver” is defined. (my emphasis)
[57] Thus I rule that there is no valid counterclaim that currently exists in this present action and thus, I do not have to take Stadia’s desire to have its “counterclaim” tried in this present action into account in exercising my discretion under s. 47 as to how to deal with Glasstrade’s remaining contract claim. Because this is such a serious procedural error, I would not, if asked, grant Stadia leave to fix this error under Rule 2.01(1).
Final Decision On Exercising The Discretion Under s.47
[58] So aside from this “counterclaim” issue, the above-noted history of this action shows that although the statement of claim was issued on March 6, 2013, almost no further progress has been made in this court file to have Glasstrade’s claim decided on the merits. Pleadings are not complete nor has there been any documentary or oral discovery. The action is still at its very earliest stage. Taking into account all the existing circumstances of this action, and also the law as set forth in the decision in Teepee, supra, and the other cases cited therein, I have decided to exercise my discretion to order that the remaining current contract action be dismissed but, of course, this will be without prejudice to Glasstrade starting a fresh contract action if so advised, if its effort to compel arbitration fails, or is such effort is undetermined as of the nearing of the expiry of the limitation period, or if it decides to abandon its effort to compel an arbitration because of my observations about other hurdles to this effort, set out below.
[59] Glasstrade must also keep in mind that there is an outstanding $9,000 costs award in this action that cannot be avoided by simply starting a fresh action. To do so would, in my view, constitute an abuse of process. (I believe there are cases on the point.) Such new action would also likely trigger Stadia’s right to move for a security for costs order under Rule 56.01(1) (c).
That Part of Glasstrade’s Motion to Compel Arbitration and to have Mr. Davies Appointed as Arbitrator
[60] I now turn to the second and third parts of Glasstrade’s cross-motion. As noted earlier, Glasstrade’s current cross-notice of motion for the above-specified relief fails to refer to any statutory provision or rule to be relied on, as required by Rule 37.06 (b). As I was also concerned about my jurisdiction to hear this part of Glasstrade’s motion and to make the requested orders, I reviewed the provisions of the Arbitration Act prior to the hearing of these motions. (As to Glasstrade’s first request, that I order a stay of this action, I have already ruled that I could have ordered a stay, i.e., that I as a master had the jurisdiction to order a stay. if there had remained a continuing action and if the other requirements for a stay, as set forth in the applicable legislation and relevant case law, had existed.)
[61] But the court’s power to appoint an arbitrator is found, not in s. 7, but rather in s. 10, or perhaps, also in the dispute resolution provisions of the contract. (S. 10 only refers to a court’s power to “appoint the arbitral tribunal” and says nothing about ordering a party to participate in an arbitration as Glasstrade is asking for here. If a court were inclined to make any order, maybe all that would be necessary would be for it to issue an order appointing the arbitrator and if the opposite party then failed to attend the arbitration, the named arbitrator could and would likely proceed in its absence. Another possible basis of jurisdiction for a court to “require a party to participate in the arbitration”, as opposed to just appointing an arbitrator, is under Rule 14.05(3)(d) to determine rights that depend on the interpretation of a contract, or possibly, is to issue a mandatory injunction under s. 101, Courts of Justice Act.)
[62] It seems to me that in a case where the defendant in a lien and/or contract action wants to have a disputed arbitration proceed, pursuant to an existing arbitration agreement, its remedy is to apply for a stay of the plaintiff’s action under s. 7 (1). If the order is granted, this leaves the plaintiff with no option but to proceed to arbitration if it wishes to try and collect any money that it claims is owing to it.
[63] On the other hand, if it is the plaintiff who wants to proceed to arbitration, and who has started a lien and/or contract action, and where it is the defendant who is refusing to participate in the arbitration, (which is the case here), then a stay order under s. 7 (1) seems to me to be not good enough if the defendant is obstinate. In such a case, the plaintiff will also need to get an order under s. 10 (1) or possibly, under Rule 14.05 (3) (d), to appoint an arbitrator, and possibly, to get a further order, on one of the bases above-noted, requiring the defendant to participate in the arbitration. But the first question that arises on this motion is whether a master has the jurisdiction to entertain a motion asking for such relief and to make such an order.
[64] Section 10 (1) provides that “The court may appoint the arbitral tribunal, on a party’s application …”. It is important to note that whereas in s. 7 (1), the “court” is to proceed by way of a “motion”, in s.10 (1), the court is to proceed by “application”. Rule 14.05 (2) provides that “A proceeding may be commenced by an application to the Superior Court of Justice or to a judge of that court, if a statute so authorizes”. See also Rule 14.05 (3) (d) where the “application” procedure can be used where the determination of rights depends on the interpretation of a … contract or statute”. Then see Rule 38.01 which makes Rules 38.02 to 38.11 apply to all proceedings commenced by notice of application under Rule 14.05. Then see Rule 38.02 that provides that “an application shall be made to a judge”. Then see Rule 37.02 (2) (a) which only empowers masters to hear motions in a proceeding and does not permit a master to hear applications, which are governed by Rules 14 and 38. This limitation on a master’s jurisdiction is well-known.
[65] I note that in the Advanced Construction case, supra, the plaintiff was moving before Master Short for an order staying its own lien action, and for an order appointing a specifically-named arbitrator--see p. 225, para. 47 (b) and p.277, para. 307 of this judgment. (The defendant was also moving for certain relief but that motion has no bearing on the point I am now considering.) Master Short noted that there was, as yet, no judgment of reference to a construction lien master and that he was hearing the plaintiff’s motion just as an interlocutory motion within the action pending in the Superior Court. Apparently, as appears from the reasons, neither counsel raised the issue of the master’s jurisdiction to appoint an arbitrator and neither did Master Short. At p.277, para. 308, he did refer to the relevant statutory provision in the Arbitration Act which he called “Section 66” but which is, in fact, s. 10(1). I am sure of this because he goes on to quote the section which is, exactly, s.10 (1). The reference to “Section 66” is, obviously, a typographical error.
[66] Master Short then went on, at p. 277, para.310, to say that in his view “…it is, at least, premature for the Court to become involved in the choice of an arbitrator in this case.” He also hoped that “…the parties will use their best efforts to agree on a mutually acceptable arbitrator.”
[67] Accordingly, I think it is clear that Master Short did not expressly rule that he had the jurisdiction under s.10 (1), or on any other basis, to appoint an arbitrator so this case is not authority for the proposition that masters have such jurisdiction.
[68] Thus I conclude that I have no jurisdiction to make any order under s.10 (1) of the Arbitration Act, or, as some courts have suggested when considering ordering a defendant to participate in an arbitration, under Rule 14.05 (3) (d), or to issue any mandatory order under s. 101 of the Courts of Justice Act, and thus, have no jurisdiction as requested by Glasstrade to appoint an arbitrator or to compel Stadia to participate in an arbitration.
[69] The great irony in all this is that Mr. Title got this jurisdictional question right, initially, when he commenced his Application that was originally returnable August 22, 2013. But both Mr. Title and Mr. Binavince agreed to “transfer’ that Application to a construction lien master but that was never effectively done and Mr. Title then served the within “Notice of Motion” for that relief. Nonetheless, the law is clear that parties cannot agree to confer jurisdiction on a master to hear a matter where the law itself does not confer such jurisdiction. Further, even where the parties themselves do not raise a jurisdictional issue, as occurred in this case, it is the duty of the court to refuse to exercise a jurisdiction that it does not, in law, possess. So even though Stadia’s counsel did not raise this jurisdictional issue in response to Mr. Title’s opening submissions, I raised the issue with both counsel and, after some discussion between both counsel and myself, neither seemed to be willing to engage in any legal argument and make contrary submissions about whether I had, or did not have, jurisdiction to make the orders sought by Glasstrade. I have now set out above, in detail, for the benefit of counsel, my reasons for making this ruling declining jurisdiction.
Is the Obligation To Arbitrate In This Case Mandatory? If Not, Does It Matter?
[70] There is a further problem with Glasstrade’s effort to have an arbitrator appointed and to compel the defendant to proceed to arbitration that, in my view, at least deserves a comment that may in future be helpful even though I don’t have the jurisdiction to decide the point. The sub-subcontract between Glasstrade and Stadia is attached as ex.A to the supporting affidavit of Bezodis sworn May 3, 2013. It is an 8-page contract with 19 pages of additional schedules. Para. 21 contains the “Dispute Resolution” provisions and consists of paras. 21.1 to 21.6. I now set out those provisions as follows:
21.1 Differences between the parties related to any matter arising under or in respect of the Subcontract shall be resolved in accordance with this Article 20. (sic)
21.2 The parties will make reasonable efforts to resolve any disputes through amicable negotiations between senior executives.
21.3 If the parties are unable to resolve a dispute through negotiations, the dispute may be referred to mediation. Any such mediation shall be conducted in accordance with the latest edition of the Rules for Mediation for CCDC Construction Disputes.
21.4 If the parties do not choose to mediate the dispute, or if mediation fails to resolve the dispute, the dispute may be referred to arbitration for resolution by service of a notice of arbitration in accordance with the Rules for Arbitration of CCDC Construction Disputes which shall govern the arbitration. The parties hereby agree that they will consent to the addition of any party to the arbitration whose participation is reasonably necessary or desirable for a full, fair, or efficient resolution of the issues in dispute in the arbitration.
21.5 Should either party refuse to participate in an arbitration or should a party fail to respond to a notice of arbitration within ten (10) days of its service, then either party may refer the unresolved dispute to a court of competent jurisdiction. (my emphasis)
21.6 If neither party requires a dispute to be resolved immediately, such dispute may be held in abeyance until substantial performance of the Subcontract Work is achieved, the Subcontract is terminated, or the Subcontract is abandoned, whichever occurs earlier.
[71] It is important to note that if the parties are unable to resolve any dispute through negotiations, the dispute may be referred to mediation which shall be conducted in accordance with the latest edition of the Rules for Mediation of CCDC Construction Disputes. These Rules are not in the material before me but they have been discussed in several cases cited below. I note further that, in these particular contractual provisions, if the parties “do not choose” (my emphasis) to mediate the dispute, the dispute may be referred to arbitration for resolution by service of a notice of arbitration in accordance with the said Rules. I also note that, in para. 21.5 above-noted, either party is allowed to “refuse to participate in an arbitration” and, if this occurs, either party may “refer the unresolved dispute to a court of competent jurisdiction”. (again, my emphasis)
[72] Some arbitration provisions found in some construction contracts (and in some other types of contracts) contain mandatory arbitration provisions, or have been interpreted by a court to amount to a mandatory arbitrary scheme, and where such a provision exists, or is so found by a court to exist, courts will enforce such provision and require the parties to proceed to arbitration. See, for example, Automatic Systems Inc. v. Bracknell Corp, supra, applying and approving Art Plastering Co. v. Oliver, [1945] O.W.N. 41 (H.C.) and Sandbar Construction Ltd. v. Pacific Parkland Properties Inc. (1992), 50 C.L.R. 74; 66 B.C.L.R (2d) 225 (S.C.); and also see Cityscape Richmond Corp. v. Vanbots Construction Corp. (2001), 8 C.L.R. (3d) 196 (Trafford J.); and Brock University v. Stucor Construction Ltd., supra .(The Sandbar case was one of the cases cited in Mr. Title’s Book of Authorities dealing with the arbitration issue. The other five cases cited therein, dealing with the arbitration issue, are from the 1960’s and 1970’s, and one from 1981, none of which are helpful on any of the issues that I have had to consider. One of the other cases cited in this Brief does not even deal with the topic of arbitration but rather, deals with staying an action for non-payment of costs previously ordered to be paid. Aside from the Sandbar case, none of the other cases that I have cited throughout these reasons were cited by either counsel in their materials.)
[73] In the Brock University v. Stucor Construction case, the court found that Part 8 of the General Conditions of the contract there constituted an arbitration agreement within the meaning of that expression in the Arbitration Act, and that it was the intention of the parties that contractual disputes would ultimately be resolved by what was found to be “binding arbitration”. The court there cited the cases of Automatic Systems Inc. v. E.S. Fox Ltd. (1995), 19 C.L.R. (2d) 35; Merit Sinclair Developments v. Or Haemet Sephardic School (1998), 43 C.L.R. (2d) 266 (Ont. Gen. Div.) and Cityscape Richmond Corporation v. Vanbots Construction Corporation, supra, in support of its order to stay the action and appoint a specific arbitrator.
[74] But if the dispute resolution contractual provisions do not amount to an agreement for mandatory binding arbitration, then any application to appoint an arbitrator or compel arbitration seems to me to be highly problematic. The few cases that I have looked at seem to hold that for a court to stay a plaintiff’s action or force an arbitration on a party to a construction contract that has an arbitration clause, who is resisting arbitration, the clause must be mandatory: see, for example, A.G. Clark Holdings v. HOOPP Realy Inc. (2014), 2013 ABQB 402, 26 C.L.R. (4th) 154 (Alta. Q.B.), aff’d., 2014 ABCA 20, 2014 CarswellAlta 37 (Alta. C. A.); Hopkins v. Ventura Custom Homes Ltd. (2013), 22 C.L R. (4th) 101 (Man. C.A.); Sandbar Construction v. Pacific Parkland, supra, and finally, Bondfield Construction Co. v. London Police Services (2014), 26 C.L.R. (4th) 310 (Ont. S.C.J.), all of which held that the arbitration provision in those cases was mandatory.
Final Ruling On The Arbitration Issue
[75] Accordingly, I dismiss Glasstrade’s motion seeking an order that Stadia participate in the arbitration process and for the appointment of Mr. Davies as the arbitrator. An application to a judge under Rules 14 and 38 is required. This dismissal is, of course, without prejudice to its right to seek such relief either by resurrecting its original Application if possible, or by starting a new application to a judge. Of course, when and if it does this, it may be faced with the argument that the arbitration clause in this particular contract is to be interpreted as one that is optional rather than mandatory.
Stadia’s Motion to Dismiss the Glasstrade’s Action by Reason of Non-Payment of The $9000 Costs Award
[76] These unopposed costs were awarded by Master Wiebe on June 20, 2013. Almost eleven months have passed since then with no payment. Glasstrade received a further five month extension for payment from me on November 13, 2013, to April 9, 2014, and then to the date of these reasons. The most recent affidavit of Bezodis, sworn April 3, 2014, shows that there is no hope of payment in the near or even mid-to-distant future. If I had not already decided to dismiss this entire action for the reasons set forth earlier in these reasons, (execising my discretion under s.47), I would nevertheless dismiss it relying on Rules 57.03(2) and 60.12 as I find Stadia entitled to this ultimate relief. In doing so, I have reviewed and considered all six cases in Mr. Title’s Brief of Authorities, and particularly, Starland Contracting Ltd. v. 1581518 Ontario Ltd. 2009 30444 (Ont. Div. Ct.) and Doherty and Collins v. Clarkson Manors Inc. et al (2012) ONSC 5193, Price J., and all the cases cited therein. The facts in the present case are quite different from the facts in all the cases cited by Mr. Title. I thus exercise my discretion under the said rules to dismiss this action also on the basis of the non-payment of the said costs.
[77] I again remind the plaintiff that if, at some point, it starts an fresh contract action, which would not, based on the Teepee Excavating case, supra, be barred by the concepts of res judicata or issue estoppel, it will still have to deal with the matter of these $9,000 in unpaid costs.
[78] Of course, Stadia could also start its own damages-for-breach-of-contract action against Glasstrade to claim the relief that it has tried to claim in its aforesaid invalid counterclaim but if it did that, it would not be able to get a security for cost order against Glasstrade for its own claim, and it is doubtful that it could get a security-for-costs order in respect of any counterclaim of Glasstrade. Also, from a practical point of view, based on the evidence before me, it seems unlikely that there could be any actual recovery of money under any judgment against Glasstrade. But, of course, these future decisions will have to be decided by the parties and their legal advisors.
The Costs of These Motions (Stadia’s Motion and Glasstrade’s Cross-Motion)
[79] Since Stadia was successful on its motion to dismiss this remaining action for the non-payment of the $9,000 costs award, and was also successful in resisting Glasstrade’s cross-motion for a stay, and for an order compelling Stadia to participate in an arbitration and for an order appointing Mr. Davies as arbitrator, it would generally be entitled to its costs for both its motion and for resisting Glasstrade’s unsuccessful cross-motion. However, Stadia did not raise any of the procedural issues surrounding either part of Glasstrade’s cross-motion, as I have set out above, and, in fact, agreed that Glasstrade’s original “Application” should be “transferred” to be heard by a construction lien master. If I had been asked, I would not have awarded it any costs in relation to the cross-motion. However, on reviewing its Costs Outline for its own motion, and its Bill of Costs for the defence of Glasstrade’s lien/contract action, no claim is being made for any costs relating to Stadia’s cross-motion.
[80] As to Stadia’s own motion to dismiss for non-payment of costs, which was started on November 4, 2013, Stadia claims $2,830.65 for all the work done up to and including the November 13th hearing and $450 for the hearing on April 9th and I find these amounts to be reasonable. I allow two disbursements at $70.50, for a total of $3,315.15 inclusive of H.S.T.
[81] As to the costs to Stadia for the action, excluding its motion and the cross-motion, it claims $1,700 for its motion to vacate the lien, $1275 for all work done in reviewing its client’s documents and in reviewing the statement of claim and preparing the statement of defence (and counterclaim that was served but never filed). I allow $1,750 for these items. Disbursements were claimed at $362.93 but I allow only $269.93 for a total of $1,952.93 inclusive of H.S.T. Thus, the total costs awarded to Stadia are $5,268.08 inclusive of H.S.T.
The Formal Order
[82] There will be one order taken out reciting both Stadia’s motion and Glasstrade’s cross-motion, and describing all the motion material that was before me, and providing that the motion and cross-motion are both dismissed, and that the action herein is dismissed, with costs fixed at $5,268.08 payable by the plaintiff 211417 Ontario Inc. c.o.b. as Glasstrade to the defendant Stadia Industries Ltd. forthwith. (I do not have to make any order about the earlier $9,000 costs award as this has already been finally dealt with by Master Wiebe as above-noted.).
Dated: __May 28, 2014 (original signed)
Master D.H. Sandler
DHS/rn
Court File No. 13-CV-475608
SUPERIOR COURT OF JUSTICE
IN THE MATTER OF THE CONSTRUCTION LIEN ACT R.S.O. 1990
B E T W E E N
21114 ONTARIO INC. C.O.B. as
GLASSTRADE
Plaintiff
- and –
STADIA INDUSTRIES LTD., KENAIDAN
CONTRACTING LTD. and THE BOARD OF REGENTS OF VICTORIA UNIVERSITY
Defendants
Heard April 9, 2014
MASTER SANDLER