COURT FILE NO.: CV-13-0248
DATE: 2014-07-14
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
G.C. Rentals & Enterprises Limited,
Brian A. Babcock, for the Plaintiffs
Plaintiff
- and -
Advanced Precast Inc., Plenary Justice Thunder Bay LP, and Bird Design-Build Construction Inc.,
Dan Matson, for the Defendants
Defendants
HEARD: April 16, 2014,
at Thunder Bay, Ontario
Mr. Justice D. C. Shaw
Decision On Motion
[1] This is a motion by the defendant, Advanced Precast Inc. (“Advanced”) for an order pursuant to s. 47 of the Construction Lien Act discharging and vacating the claim for lien of the plaintiff, G.C. Rentals & Enterprises Limited (“G.C.”) on the grounds that the lien was filed out of time.
Background
[2] Advanced is a manufacturer and supplier of precast concrete products. G.C. is a supplier of cranes and operating engineers for cranes. The defendant, Bird Design-Build Construction Inc. (“Bird”) is a general contractor responsible for the design and construction of a new courthouse in Thunder Bay (“the Project”). Bird is a party to the action with respect to its responsibility to retain and pay construction lien holdbacks.
[3] Advanced was awarded a contract by Bird for the supply and installation of precast concrete panels designed and manufactured specifically for the Project.
[4] Beginning in May 2012 and over the course of the next 12 months, Advanced ordered and G.C. supplied cranes and operators to hoist the panels that Advanced agreed to supply and install at the Project. The contract between G.C. and Advanced was made in part orally and in part by a series of correspondence and documents.
[5] As of April 16, 2013, Advanced was in arrears of payment to G.C. On that date, G.C. refused to continue to provide hoisting services to Advanced. As of that date, there remained approximately 30 precast panels to be installed by Advanced, pursuant to its contract with Bird.
[6] The contract between Advanced and Bird contained the following article:
“Article 17
(a) Bird may withhold payments from Advanced to such extent as may be necessary to protect it from loss on account of defective work, equipment and material not remedied under the Subcontract or any other subcontract or agreement; and
(b) Bird may withhold payments from Advanced or make payments directly to suppliers, employees or sub-contractors to protect it from loss resulting from any failure of Advanced to make payments for equipment, material or labour.”
[7] In an affidavit sworn by Bruce Carrier, the President of G.C., in support of G.C.’s position on this motion, Mr. Carrier stated:
“9. Commencing on or around the beginning of May, 2013, I was assured by Kelly Sundell an employee of Bird, that if the Plaintiff continued to provide Hoisting Services for Advanced’s Panels that Bird would:
a. assure payment for the remainder of the Hoisting Services required for the Advanced Panels, and
b. do what it could to assist the Plaintiff in collection of the Arrears.”
[8] Mr. Carrier said that he was instructed by Mr. Sundell, Bird’s project manager, to issue future invoices to Bird’s Purchase Order No. 890. Throughout the Project, G.C. had provided other hoisting services directly to Bird. Those hoisting services were, and continued to be, billed under Bird’s Purchase Order No. 893.
[9] Mr. Carrier said that he was told by Mr. Sundell that although payment for installation of the remaining 30 panels supplied by Advanced would be paid under a Bird invoice, the payments would be counted by Bird against the amounts that Bird would otherwise pay Advanced under the contract between Bird and Advanced. Mr. Carrier said that despite this arrangement, it remained his intention that the contract for hoisting services for Advanced’s precast panels was between G.C. and Advanced. Mr. Carrier said that G.C. continued to supply hoisting services for the panels under the supervision and direction of both Advanced and Bird. From April 16, 2013 to May 15, 2013, G.C. continued to supply the hoisting services to install the Advanced panels on the Project. Mr. Carrier said that the invoices sent by G.C. to Bird for hoisting services for the panels were paid.
[10] Mr. Carrier was not cross-examined on his affidavit.
[11] Adam Figueira, a project manager for Advanced, swore an affidavit in support of Advanced’s motion. In cross-examination, he said that the 30 panels that had yet to be installed as of April 16, 2013 were part of the work required to be completed by Advanced under its contract with Bird. He said that these panels were eventually hoisted by G.C.
[12] On advice of counsel, Mr. Figueira refused to answer any questions dealing with arrears of payments owing from Advanced to G.C. for hoisting services for the panels and any questions relating to payments under Advanced’s Contract with Bird. Mr. Figueria acknowledged in cross-examination that although he had said in his affidavit that Bird agreed to retain G.C. directly for all future crane services, in fact he did not personally know what Bird and G.C. had agreed to. He agreed that all he really knew was that G.C. continued to erect the Advanced panels after a gap of about two weeks, but invoiced Bird for them after May 1, 2013. He agreed that he had no information to contradict what Mr. Carrier said were his arrangements with Bird.
[13] On June 3, 2013, G.C. issued a claim for lien against holdbacks with respect to work done under its contract with Advanced. Bird posted security by way of a lien bond for $338,897.47. Under the Construction Lien Act, G.C.’s claim for lien was required to be preserved within 45 days from the last date of the supply of services under its contract with Advanced.
Issue
[14] Advanced contends that the claim for lien should have been preserved by May 31, 2013, which was 45 days from April 16, 2013, the date which Advanced claims was the last date of supply by G.C. to Advanced. Advanced submits that G.C.’s claim for lien was not preserved on time and should be vacated and discharged and that the lien bond should be cancelled.
[15] G.C. contends that the hoisting services that it provided to the Project from April 16, 2013 to May 15, 2013, were a continuation of the contract that it had with Advanced, with Bird assuming payment obligations on behalf of Advanced, pursuant to the contract between Bird and Advanced. G.C. contends that because it last supplied hoisting services to the Project on May 15, 2013 under its contract with Advanced, it perfected its claim for lien within the 45 day time limit prescribed by the Act.
[16] The issue is whether the hoisting services which G.C. provided after April 16, 2013 were supplied under a single continuing contract between G.C. and Advanced or whether they were supplied under a separate contract between G.C. and Bird.
[17] Advanced submits that this issue should be determined on this motion under s. 47 of the Act. G.C. submits that there are genuine issues of fact in dispute which are better left for determination at trial and that this motion should be dismissed. G.C. does not seek a determination on this motion that there is, in fact, one continuing contract. Rather, it submits the issue should be determined at trial. G.C. notes that the trial will proceed on a breach of contract claim by G.C. against Advanced, regardless of the outcome of this motion.
Section 47(1) of the Construction Lien Act
[18] Section 47(1) of the Construction Lien Act provides:
General power to discharge lien
47.(1) Upon motion, the court may,
(a) order the discharge of a lien;
(b) order that the registration of,
(i) a claim for lien, or
(ii) a certificate of action
or both, be vacated;
(c) a declaration, where written notice of a lien has been given, that the lien has expired, or that the written notice of the lien shall no longer bind the person to whom it was given; or
(d) dismiss an action,
upon any proper ground and subject to any terms and conditions that the court considers appropriate in the circumstances.
[19] In 1246798 Ontario Inc. v. Sterling (2000), 2000 CanLII 29031 (ON SCDC), 51 O.R. (3d) 220 (Div. Ct.), at para. 12, the Divisional Court held that a motion to discharge a lien under s. 47 is analogous to a motion for summary judgment under Rule 20. As such, if there are genuine issues of fact, the matter should be left to the trial judge.
[20] In Beaver Materials Handling Co. v. Hejna, 2005 CanLII 23127 (ON SC), [2005] O.J. No. 2733, at para. 24, Shaughnessy R.S.J. summarized the test to be followed under s. 47 as follows:
“(1) Section 47 of the Construction Lien Act, R.S.O. 1990, c. C.30 gives the Court authority to vacate the registration of the Construction Lien and Certificate of Action; declare that the lien has expired, or that written notice of the lien shall no longer bind the person to whom it was given and/or dismiss the action.
(2) The motion under s. 47 of the Construction Lien Act is akin to a motion for summary judgment and therefore Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 applies.
(3) Therefore the moving party must establish in a Section 47 motion that there is no genuine issue for trial.
(4) If there are genuine issues of fact the matter should be left to be determined by the Trial Judge.
(5) If it is not patently demonstrable on an interlocutory motion that a party has no right to a lien, or unless the court is satisfied that the cause of action could not possibly succeed at trial, then the matter should be left to the Trial Judge.
(6) Assessing credibility, weighing the evidence and drawing inferences are the function of the Trial Judge, not the Motions Judge.”
[21] In 1353025 Ontario Inc., v. Walden Group Canada Ltd. 2006 CarswellOnt. 2583 (S.C.J.), Gordon J. held that a s. 47 motion was analogous to a summary judgment motion. He stated, at para. 14:
“That being the case as per 1246798 Ontario Inc. v. Sterling (2000), 2000 CanLII 29031 (ON SCDC), 51 O.R. (3d) 220 (Ont. Div. Ct.), one must determine if there are triable factual issues involved. If there are genuine triable issues, that is answers are not clear and unequivocal, the issues are better dealt with at trial.”
[22] In Hryniak v. Mauldin, 2014 SCC 7, 2014 S.C.C.7, at para. 49, the Supreme Court of Canada established the criteria for deciding, under Rule 20, when there will be no genuine issue requiring a trial:
“There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.”
[23] At paras. 66 and 67 of the decision, the Supreme Court set out a roadmap/approach to a motion for summary judgment:
“[66] On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against she interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.
[67] Inquiring first as to whether the use of the powers under Rule 20.04(2.1) will allow the dispute to be resolved by way of summary judgment, before asking whether the interest of justice requires that those powers be exercised only at trial, emphasizes that these powers are presumptively available, rather than exceptional, in line with the goal of proportionate, cost-effective and timely dispute resolution. As well, by first determining the consequences of using the new powers, the benefit of their use is clearer. This will assist in determining whether it is in the interest of justice that they be exercised only at trial.”
[24] The question of whether, on a motion under s. 47 of the Construction Lien Act, the court by analogy may use the new discretionary powers under rules 20.04(2.1) and (2.2) given to a judge hearing a summary judgment motion was not addressed on the motion before me, other than by observation that there have been no reported cases under s. 47 since the release of Hyrniak. Although the case law prior to Hyrniak indicates that a s. 47 motion is analogous to a motion for summary judgment, I am not prepared, without submissions on the issue, to assume that on a s. 47 motion under the Construction Lien Act the court has the new, expanded powers expressly given to a summary judgment motions judge under rules 20.04(2.1) and (2.2), to weigh the evidence, evaluate credibility of a deponent, draw any reasonable inference from the evidence and order that oral evidence be presented by one or more parties. To exercise those powers would go well beyond what the case law to date has indicated should be the procedure on a s. 47 motion.
Submissions
(a) Submissions of Advanced
[25] Advanced submits that there is no genuine issue requiring trial on the issue of the timeliness of the filing of the lien.
[26] Advanced submits that there were two contracts and, because of that, the lien is out of time.
[27] Advanced submits that G.C. started its work on the Project by taking payment, direction and orders from Advanced. After April 16, 2013, when G.C. refused to provide further services to Advanced, Advanced submits that thereafter G.C. took payment, direction and orders from Bird. Advanced points to an invoice from G.C. for services on May 1 and 2, 2013 where the customer`s name is shown as Bird Construction and that Purchase Order #000890 was “ordered by Kelly”.
[28] Advanced acknowledges the existence of Article 17 of the contract between Advanced and Bird, but submits that the payments that Bird was making were payments with respect to orders from Bird to G.C. Advanced submits that after April 16, 2013 G.C. was no longer following the orders of Advanced.
[29] Advanced accepts that the contract between it and G.C. was a continuing contract or a prevenient arrangement but submits that the contract ended on April 16, 2013 when G.C. refused to provide further hoisting services to Advanced and, according to Advanced, from that date forward began to take orders, directions and payments from Bird. Advanced submits that there were now different parties - G.C. and Bird – to a new contract.
[30] Advanced submits that the making of a second contract does not permit G.C. to tack on the services provided under the second contract to the original contract so as to extend the time for registration of the lien.
(b) Submissions of G.C.
[31] G.C. submits that because the trial will proceed on breach of contract issues, regardless of a decision on this motion as to whether the claim for lien was preserved within the time limits, there would be no efficiencies gained in dealing with vacating the claim for lien on this motion rather than at trial.
[32] G.C. submits that there is a genuine question of fact in dispute between the parties, the determination of which requires a trial, that is, whether the hoisting services provided by G.C. to the Project after April 16, 2013 were a continuation of the contract between G.C. and Advanced or a separate and distinct contract between G.C. and Bird.
[33] G.C. submits that the only thing that changed after April 16, 2013 was that Bird, as permitted by its contract with Advanced, paid G.C. for its hoisting services.
[34] G.C. submits that an adverse inference should be drawn against Advanced because of its refusals to answer questions and put forward evidence as to the state of accounts between it and G.C. and between it and Bird.
Discussion
[35] Advanced bears the evidentiary burden of showing that there is no genuine issue requiring trial. It must provide a level of proof that demonstrates that a trial is unnecessary to fairly and justly resolve the issues. Advanced must present its best case or risk losing. Each party must put “its best foot forward” as to the existence or non-existence of material issues to be tried.
[36] I have concluded that Advanced has failed to establish that there is no genuine issue of fact to be tried.
[37] Mr. Carrier, on behalf of G.C., has deposed that G.C. and Bird, through Mr. Sundell, agreed that G.C. would continue to provide hoisting services for the installation of Advanced’s panels on the Project and would be paid by Bird. These payments would be counted by Bird against the amounts that Bird would otherwise pay to Advanced under Bird’s contract with Advanced. These payments to G.C. were, according to Mr. Carrier, in effect Advanced’s monies. Mr. Carrier said that this was not an unusual arrangement for a general contractor to make when faced with a subcontractor not paying for supplies or services and the general contractor wants the project to continue. Mr. Carrier said that it always remained his intention that the hoisting services which G.C. was continuing to provide were under G.C.’s contract with Advanced.
[38] Advanced presented no evidence from Bird, as the other party to the alleged second contract.
[39] Mr. Figueira, on behalf of Advanced, accepted that when he deposed in his affidavit that Bird agreed to retain G.C. directly for all future crane services he was not part of those discussions and could not say what G.C. and Bird had agreed to. He agreed that he did not have information to dispute Mr. Carrier’s evidence that Mr. Sundell told Mr. Carrier that if G.C. continued to provide hoisting services for Advanced’s panels Bird would assure payment for the remainder of the hoisting services required for the Advanced panels and do what it could to assist G.C. in collection of arrears owed by Advanced.
[40] Mr. Figueira agreed that as of April 16, 2013, Advanced still had approximately 30 panels to be erected. He agreed that Advanced’s Sub Contract with Bird required Advanced to complete that work, and that the panels were erected by G.C.’s cranes. He stated that Advanced had completed its work for Bird.
[41] Mr. Figueroa, on the advice of counsel, refused to agree or disagree with Mr. Carrier’s affidavit that by April 16, 2013 Advanced was in substantial arrears in payment. He refused, on the advice of counsel, to answer questions as to what conversations or discussions he had with Mr. Carrier before G.C. stopped providing services on April 16, 2013.
[42] In my view, by failing to provide evidence from Bird as to the agreement between Bird and G.C. and by refusing to answer questions about conversations between Mr. Figueira and Mr. Carrier before April 16, 2013 and by refusing to answer questions about payments to G.C. and payments from Bird, Advanced has not “put its best foot forward”. The court is justified in drawing an adverse inference as to whether that evidence would assist the case for Advanced.
[43] Article 17 of the Sub Contract between Bird and Advanced is significant. Bird was entitled under its contract with Advanced to make payments directly to G.C. to protect Bird from losses as a result of Advanced’s failure to pay G.C. In my opinion, that does not necessarily mean that the contract between Advanced and G.C. came to an end when Bird became the paymaster. If Bird was offsetting these payments against payments owed to Advanced, then, in effect, as claimed by Mr. Carrier, G.C. was being paid with Advanced’s monies, with an intermediate step added. Article 17 authorized Bird to make payments directly to Advanced’s suppliers. Would there be a need for this provision if Bird wanted to enter into a new contract on its own with G.C.? There is an arguable case on the evidence before me that it was the intent of both G.C. and Bird that G.C. would continue to provide the same services on the same terms under the contract between G.C. and Advanced, with Advanced’s payments being made out of Advanced’s monies, albeit the mechanics of payment were altered.
[44] On the basis of Mr. Figueira’s testimony that Advanced was obligated to complete its contract with Bird, that is, to install the remaining 30 panels and that Advanced had in fact completed the Sub Contract, it would seem to follow that G.C. would have had to complete its hoisting services for Advanced under its contact with Advanced, not under a new contract with Bird. Under its contract with Bird, Advanced agreed to:
“… furnish all labour, materials, installations, cartage, supplies, equipment, scaffolding, tools and other facilities of every kind and description required for the prompt and efficient execution and performance of the Subcontract work.”
[45] Advanced could not have complied with its obligations under its contract with Bird and completed its work if in fact G.C. was doing part of that work under a separate contract with Bird. To complete its contract with Bird, Advanced would have been responsible, vis-à-vis Bird, for providing the hoisting services necessary for installation of the panels, which it would have had to do through its contract with G.C. If it is Advanced’s position that it completed its contract with Bird, it could only have done so if G.C. had continued to supply the necessary hoisting services under its contract with Advanced.
[46] Advanced submits that after April 16, 2013, G.C. took its orders and directions from Bird. However, Mr. Carrier deposes that after April 16, 2013, hoisting services continued on the Project under the supervision and direction of both Advanced and Bird. Although the fact that there was a purchase order from Bird rather than Advanced is a consideration in determining whether there are two separate contracts or one continuing contract, it is not determinative. The issue requires a finding of fact upon a consideration of all of the evidence.
[47] Advanced points to the invoice from G.C. to Bird for a 90 ton crane, for May 1 and 2, 2013, described therein as related to Purchase Order #890 ordered by “Kelly”. However, the materials filed on the motion also include a Purchase Order from Bird dated May 1, 2013 for “Crane Rental – 90 ton on behalf of Advanced Precast as per Bill Zister”. This document is consistent with the position of G.C. that it continued to provide services under its contract with Advanced. There is no evidence as to the identity of “Bill Zister” or as to details of his involvement in the rental of the G.C. crane.
[48] Although, as noted above, I make no determination as to whether the court on this s. 47 motion has the new discretionary powers under Rule 20.04(2.1) and (2.2), in view of the fact that the trial will proceed in any event on the issue of breach of contract, with the same witnesses who are involved in this motion, the goals of timeliness, affordability and proportionality in the context of the litigation as a whole would not be furthered by expanding this motion to hear oral evidence on the facts in dispute, evaluate credibility and draw inferences, even if the court has the discretion to do so by analogy to Rule 20.
[49] In conclusion, it is my opinion that the issue of whether there is one continuing contract or two separate contracts, is a genuine issue of fact that requires a trial for its fair and just determination on the merits.
[50] This motion is dismissed.
Costs
[51] If the parties are unable to agree upon costs, they shall contact the Trial Co-ordinator within 30 days to arrange a date to speak to the issue, failing which costs shall be deemed to have been settled.
___”original signed by”
The Hon. Mr. Justice D. C. Shaw
Released: July 14, 2014
COURT FILE NO.: CV-13-0248
DATE: 2014-07-14
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
G.C. Rentals & Enterprises Limited,
Plaintiff
- and -
Advanced Precast Inc., Plenary Justice Thunder Bay LP, and Bird Design-Build Construction Inc.,
Defendants
DECISION ON MOTION
Shaw J.
Released: July 14, 2014
/mls