2015 ONSC 3923
COURT FILE NO.: CV-15-0132
DATE: 2015-06-17
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Coastal Steel Construction Limited,
Jordan R.B. Lester, for the Plaintiff
Plaintiff
- and -
Man-Shield (NWO) Construction Inc., 1876030 Ontario Inc. and T.B. Properties LP,
Daniel Matson, for the Defendants
Defendants
HEARD: May 14, 2015,
at Thunder Bay, Ontario
Platana J.
REASONS ON MOTION
[1] The Plaintiff, a subcontractor, brings this motion for an order that the Defendant, Man-Shield (NWO) Construction, the contractor, comply with a request by the Plaintiff for information made under s. 39(1)(2) of the Construction Lien Act, R.S.O. 1990, c. C.30.
[2] The relevant sections of the Act are:
- (1) Any person having a lien or who is the beneficiary of a trust under Part II or who is a mortgagee may, at any time, by written request, require information to be provided within a reasonable time, not to exceed twenty-one days, as follows:
from owner or contractor
- By the owner or contractor, with,
i. the names of the parties to the contract,
ii. the contract price,
iii. the state of accounts between the owner and the contractor,
iv. a copy of any labour and material payment bond in respect of the contract posted by the contractor with the owner, and
v. a statement of whether the contract provides in writing that liens shall arise and expire on a lot-by-lot basis.
from contractor or subcontractor
- By the contractor or a subcontractor, with,
i. the names of the parties to a subcontract,
ii. the state of accounts between the contractor and a subcontractor or between a subcontractor and another subcontractor,
iii. a statement of whether there is a provision in a subcontract providing for certification of the subcontract,
iv. a statement of whether a subcontract has been certified as complete, and
v. a copy of any labour and material payment bond posted by a subcontractor with the contractor or by a subcontractor with another subcontractor.
Background
[3] The affidavit filed notes that on February 26, 2015, the Plaintiff’s solicitors wrote to the Defendant advising that a construction lien had been registered against the title to the Delta Hotel property in Thunder Bay. The letter also served as notice that the Plaintiff is a trust fund claimant entitled to share in both the trusts established by ss. 7 and 8 of the Act, and requested the following information:
the names of the parties to a subcontract,
the state of accounts between the contractor and a subcontractor or between a subcontractor and another subcontractor,
a statement of whether there is a provision in a subcontract providing for certification of the subcontract,
a statement of whether a subcontract has been certified as complete, and
a copy of any labour and material payment bond posted by a subcontractor with the contractor or by a subcontractor with another subcontractor.
[4] This is a request for information pursuant to s. 39(1)(2). No response was received within the statutory 21 day time period for a response.
[5] In a second letter dated April 9, 2015, the Plaintiff wrote seeking the following information:
the names of the parties to a subcontract;
the contract price, including any Change Orders and extras;
the state of accounts between the owner and the contractor;
a copy of any labour and material payment bond in respect of the contract posted by the contractor with the owner;
a statement of whether the contract provides in writing that liens shall arise and expire on a lot-by-lot basis.
[6] This second request by the Plaintiff’s is a request for information pursuant to s. 39(1)(1), with the exception of the first point (i.e. asking for names of parties to a subcontract rather than the names of the parties to a contract).
[7] On April 29, the Defendants responded to the April 9 letter as follows:
The parties to the contract are Man-Shield (NWO) construction Inc. and Coastal Steel Construction Limited;
The contract price was for $496,053.00 plus HST;
The state of accounts between the Owner and Man-Shield is as follows:
a) Original contract price: $3,073,737.11 + HST
b) Paid to date: $1,783,519.94 + HST
There is no labour and material bond provided by Man-Shield to the Owner in relation to subcontract issued to Coastal;
There is no contractual provision that liens shall arise and expire on a lot by lot basis.
[8] That response included answers to items in the April 9, 2015. In so replying, the Defendants complied with a request for information pursuant to s. 39(1)(1), with the exception of providing the names of the parties to the contract. Due to the misnomer of asking for parties to the subcontract, that information was not requested.
[9] The response did not include the answers to the items requested in items 2, 3, 4, and 5 of the February 26, 2015, letter, and in that response the Defendants did not comply with a request for information pursuant to s. 39(1)(2). By reply on May 6, 2015, the Plaintiff requested a response to those items.
[10] In argument, the Defendants focused on the issue that there are two sets of questions in s. 39. The issue is which set applies. Mr. Matson argues that this is properly a request under s. 39(1)(1). He argues that the requests in the letter of February 26 were not all answered because they are all 39(1)(2), the answers to all of which are in the knowledge of the Plaintiff as sub-contractor. He argues that the April 9 letter was answered because it was a 39(1)(1) request.
Discussion
[11] In Urbacon Building Groups Corp. v. Guelph (City), 2009 CarswellOnt 8127, O.J. No. 5531, D.L. Corbett J. stated:
To facilitate paying something on account of subcontractor claims, the court required Guelph to advise of its position concerning the minimum amount it owes a holdback. This requirement is derived from Guelph’s obligation to provide information pursuant to s. 39(1) of the Act. Guelph has a statutory obligation to advise of “the state of the accounts between the owner and the contractor”. This “statement of accounts” includes, at minimum: (a) the value of the work done; (b) the amount paid; (c) the amount held back pursuant to the Act; (d) the balance owed.
The purpose of s. 39(1) of the Act is to enable lien claimants to obtain information “pertinent to the decision of whether or not to preserve a lien claim or to prosecute a lien action”. The “decision to prosecute” is a dynamic one, and continues throughout the action; the amount that is available for subcontractors is material to their decision as to whether to participate, and how to participate, in the ongoing proceedings. This is particularly important in a case such as this, where it seems that most or all of the contested issues at trial will be between Urbacon and Guelph. Subcontractors with established claims may well adopt a passive role at trial if the minimum Basic Holdback known. [Emphasis added].
[12] From interpreting the statute and the purpose of this Act, it appears that s. 39 allows for requests of information for different contracts at different levels and from different parties. Generally, the idea of seeking this information is to determine how much money is available from a holdback, and thus, determining if a lien is a viable option in the circumstances.
[13] A request pursuant to s. 39(1)(1) is to determine information about the initial contract between the owner and the contractor. They are privy to that contract and thus, either party would have knowledge of the information sought. Here, that is information that Defendant and the owners would have knowledge of, and the subcontractor is entitled to.
[14] A request pursuant to s. 39(1)(2) is to determine information about a subcontract between the contractor and the subcontractor. They are privy to that contract and thus, either party would have knowledge of the information sought. Here, that is information that Defendant and the subcontractor, the Plaintiff, would have knowledge of.
[15] Therefore, the Plaintiffs appear to be requesting information that they should have knowledge of. Although there appears to be nothing in s. 39 that prevents this request, there does not appear to be a reason why the Plaintiffs would not already have knowledge of this information.
[16] Although it was not specifically requested, when the Defendants provide the names of the parties to the contract, they will have fully complied with a request for information pursuant to s. 39(1)(1).
[17] Motion for request of information pursuant to s. 39(1)(2) is dismissed.
[18] If the parties are unable to agree on costs, they may file written submissions of no more than five pages, double-spaced, in addition to any pertinent offers and draft bills of costs, within 30 days. Such written submissions are to be forwarded to me at my chambers at 125 Brodie Street North, Thunder Bay, Ontario. If no submissions are received within 30 days, the parties will be deemed to have settled the issue of costs as between themselves.
“original signed by”_
Mr. Justice T. A. Platana
Released: June 17, 2015
2015 ONSC 3923
COURT FILE NO.: CV-15-0132
DATE: 2015-06-17
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Coastal Steel Construction Limited,
Plaintiff
- and -
Man-Shield (NWO) Construction Inc., 1876030 Ontario Inc. and T.B. Properties LP,
Defendants
REASONS ON MOTION
Platana J.
Released: June 17, 2015
cs