Court File and Parties

COURT FILE NO.: 216/11 and 501/12 DATE: 2016-04-27 ONTARIO SUPERIOR COURT OF JUSTICE

B E T W E E N:

GREAT LAKES COPPER INC. Plaintiff

• and -

1623242 ONTARIO INC. and 3072453 NOVA SCOTIA COMPANY Defendants

COUNSEL: Milton Davis, for the plaintiff and for the defendant, 3072453 Nova Scotia Company Gregory Govedaris, for the defendant, 1623242 Ontario Inc.

HEARD: April 26, 2016, at Brampton, Ontario

Price J.

Endorsement

NATURE OF PROCEEDING

[1] Counsel attended on April 26, 2016, for the resumption of a case conference begun on January 22, 2015, and continued on January 28 and February 17, 2016. As I noted in my endorsement on February 18, 2016, the conference was adjourned on January 28, 2016, to permit 1623242 Ontario Inc. to discontinue its fraud action and to redeem its mortgage, which it subsequently did. This disposed of its fraud action (Court File No. 571/12) and the mortgage foreclosure action by 3072453 Nova Scotia Company (court file no. 640/13), which leaves the remaining two constructive lien actions (Court File No. 216/11 and 501/12) to be tried.

[2] On February 17, 2016, 162 applied, pursuant to s. 67(2) of the Construction Lien Act, for leave to move for summary judgment dismissing the construction lien actions against it. GLC indicated that if 162 was granted leave to make such a motion, GLC would seek leave to make a cross-motion for summary judgment against 162.

[3] In reasons released February 18, 2016, this court ordered that:

1. 1628242 Ontario Inc. (“162”) was, by March 30, 2016, to produce to Great Lakes Copper Inc. (“GLC”) a draft of the issues of law that could be determined in these actions, and a draft agreed statement of facts upon which a trial of those issues could be based.
2. GLC was, by April 18, 2016, to produce its response to 162’s draft of the issues and proposed agreed statement of facts.

[4] The parties were unable to arrive at an agreed statement of facts. Indeed, GLC opposed the court’s even reviewing the draft agreed statement of facts that 162 had prepared, on the ground that the facts which it contained were disputed and should not form the basis of a ruling on 162’s motion for leave to bring a motion for summary judgment.

ISSUES

[5] The issue that needs to be determined, as set out in my endorsement dated February 18, 2016, is what procedure will secure the just, most expeditious and least expensive determination of these actions on their merits.

POSITION OF THE PARTIES

[6] 162 submits that a determination of the following issues of law, which it says it could argue in one hour, and which GLC says it would require longer to respond to, would likely dispose of, or substantially shorten, a trial of the construction lien actions:

1. Whether GLC can succeed in its construction lien claims in the absence of a contract with 162;
2. Whether the Agreement of Purchase and Sale which 162 entered into for the purchase of the property at 865 Gartshore Street, Fergus, Ontario (the “Fergus Property”), constitutes a “contract” within the meaning of the Construction Lien Act, so as to render 162 liable on a lien for the cost of “improvements” of the property, being the cost of work performed by GLC in removing contaminants from the property pursuant to orders made by the Ministry of the Environment (“MOE”) of Ontario, based on the following term contained in the Agreement: The Buyer further agrees and acknowledges herewith that any and all environmental matters, liabilities and/or contingent liabilities pertaining to the subject property, whether already in existence or whether arising following completion of this transaction, shzlal remain the responsibility of the Buyer [Emphasis added]
3. Whether the work performed by GLC in removing the contaminants from the property was an improvement made at 162’s implied “request” in such a way as to render 162 liable to a claim for lien? (Citing Phoenix Assurance Co. of Canada v. Bird Construction, Pinehurst Woodworking Co. v. Rocco, Lincoln Mechanical Contractors, a Division of Lincoln Plumbing & Heating Ltd. v. Cardillo, 1276761 Ontario Ltd. (c.o.b. GRM Contracting) v. 2748355 Canada Inc., Sanderson Pearcy & Co. Ltd. v. Foster, Bird Construction v. Ownix, Haas Homes Ltd. v. March Road Gym and Health Club Inc., Gearing v. Robinson, City of Hamilton v. Cipriani, Grecor Engineering Inc. v. Kingston 2000 Developments Ltd., Advanced Construction Techniques Ltd. v. OHL Construction Canada, Roni Excavating v. Sedona Development Group (Lorne Park) Inc., Parkland Plumbing & Heating Ltd. v. Minaki Lodge Resort 2002 Inc., Muzzo Brothers Ltd. v. Cadillac Fairview Corp. Ltd.)
4. Whether GLC’s removal of the contaminants from the property entitles it to recover the cost from 162, either pursuant to s. 14 of the Construction Lien Act or at common law, based on unjust enrichment and quantum meruit.

[7] GLC opposes a bifurcation of the trial, or the granting of leave to 162 to bring a motion to discharge the liens, or for summary judgment, on the ground that the determination of those issues would not be possible without a determination of disputed facts, and would not substantially shorten the trial.

ANALYSIS AND LAW

[8] I adopt the analysis set out in my earlier endorsement dated February 18, 2016. For the reasons that follow, I have reluctantly concluded that bifurcating the trial, or granting leave to 162 to bring a motion for a summary judgment or to discharge the liens, would not be in the interests of justice.

[9] In 1246798 Ontario Inc. v. Sterling, in 2000, 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 of the Rules of Civil Procedure. As such, if there are genuine issues of fact, the matter should be left to the trial judge.

[10] In Beaver Materials Handling Co. v. Hejna, in 2005, Shaughnessy R.S.J. summarized the test to be followed under s. 47. Among other principles, he noted that 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.

[11] Shaw, J. held in G.C. Rentals Enterprises Ltd. v. Advanced Precast Inc., in 2014, that a motion to discharge a lien should be granted in only the clearest of cases. This is not such a case. The parties agree that the court is being asked to determine issues of law, or mixed fact and law, that are novel, including the significance to be ascribed to the obligation to remove environmental contaminants in the context of an owner’s liability for the cost of improvements to property under the Construction Lien Act.

[12] The parties have been unable to agree on the facts that would form the basis of a determination of the issues of law. It is unlikely, in my view, that the court could determine the issues of law without determining the underlying facts after hearing a significant portion of the evidence that would be called at trial. Without agreement on the facts, the disputed issues of value involved in the quantification of GLC’s claim would almost certainly intrude upon the issues of 162’s liability. For example:

1. The knowledge possessed by 162’s owner, Krishan Judge, at the time he purchased the property, as to the extent of environmental contamination, and the value the property had, if contaminated and if not contaminated, may have to be determined before a finding can be made as to what 162 and the vendor intended by the wording used in the Agreement of Purchase and Sale, and as to whether GLC performed the work it did, in effect, as 162’s agent and at its implied request.
2. The value of the property at the time of the purchase, with and without the contamination, and the extent, if at all, to which the purchase price of the property was discounted based on the contamination, may have to be determined before a finding can be made as to whether 162 was unjustly enriched.
3. The cost of the clean-up, and the amount paid to GLC by Wolverine Tube, may have to be determined before a finding can be made as to whether GLC was compensated for its work, and whether the enrichment of 162 was at GLC’s expense, and as to the extent of any uncompensated work on the principle of quantum meruit.

[13] The inter-dependence of the issues of fact and law is underlined by the fact that 162 is seeking an order requiring GLC to comply with undertakings given at the examination of Kevin Grosbeck on January 26, 2015, regarding evidence of payments made to contractors in respect of the liens.

[14] GLC estimates that at least a day would be required for the hearing of a motion(s). The estimated time for trial is between four and five days. Based on these estimates, judicial economy would not be served by the hearing of the motion(s), especially having regard to the risk that, depending on the outcome of the motion(s), a trial might still be required.

CONCLUSION AND ORDER

[15] For the foregoing reasons, it is ordered that:

1. The motion by 1623242 Ontario Inc. for leave to move to discharge the liens of Great Lakes Copper Inc., or for summary judgment, is dismissed;
2. Great Lakes Copper Inc. shall, by June 30, 2016, produce to 1623242 Ontario Inc. the evidence it requested in questions 293 and 356 at the examination of Kevin Grosbeck on January 26, 2015, consisting of the following: a) all documentation evidencing all payments to all contractors in respect of the first lien; b) A detailed summary in respect of all payments of expenses made in respect of the second lien.
3. If required by 1628242 Ontario Inc., Kevin Grosbeck shall re-attend at the expense of Great Lakes Copper Inc., by July 31, 2016, to answer questions arising from answers given following the examination of Mr. Grosbeck on January 26, 2015.
4. 1623242 Ontario Inc. shall forthwith permit entry onto the property at 865 Gartshore Street in Fergus, on a date and time to be agreed upon, by an expert whom Great Lakes Copper Inc. shall designate, for the purpose of valuing or appraising the property, and shall allow such expert to take soil and/or water samples, if he/she requires, for the purpose of the valuation or appraisal;
5. Any motion arising from non-compliance with undertakings shall be brought before me for hearing by August 31, 2016;
6. Great Lakes Copper Inc. shall, by September 30, 2016, serve on 1623242, a list of the witnesses it will call at trial, with the time that it will require for the examination-in-chief of each of them, and will-say statements for all witnesses other than: a) those examined prior to trial; and b) experts whose reports have been served.
7. Great Lakes Copper Inc. shall by September 30, 2016, deliver the following in respect of both court file no. 216/11 and 501/12: a) Its Trial Record; b) A document brief containing all documents upon which it will rely at trial; c) A factum; and d) A case book in hard copy and electronic form.
8. 1623242 Ontario Inc. shall, by October 31, 2016, serve on 1623242 a list of the witnesses it will call at trial, with the time that it will require for the examination-in-chief of each of them, and will-say statements for all witnesses other than: a) those examined prior to trial; and b) experts whose reports have been served.
9. 1623242 Ontario Inc. shall, by October 31, 2016, deliver the following in respect of both court file no. 216/11 and 501/12: a) Its Supplementary Trial Record, if any; b) A document brief containing all documents upon which it will rely at trial; c) A factum; and d) A case book in hard copy and electronic form.
10. The parties shall return for a pre-trial conference before me between 9 and 10 a.m. on a date in November 2016, when I am presiding, which GLC shall, in consultation with 1623242 Ontario Inc., arrange with my judicial secretary.
11. These actions shall be tried at the blitz sittings beginning May 8, 2017, for an estimated 5 days.
12. If any disputes arise in the implementation of this order, either party may move for directions, by motion to be heard by me between 9 and 10 a.m. on a date when I am presiding, to be arranged with my judicial secretary.
13. Each party shall pay its own costs of this conference, and of the motion by 1623242 Ontario Inc. for leave to bring a motion to discharge the liens or for summary judgment.

Price J. Released: April 27, 2016