Court File and Parties

Brockville Court File No.: 14-1011 Date: 2016-04-27 Superior Court of Justice - Ontario

Re: Ziggy Pflanzer as Trustee of the Ontario Provincial Council of Carpenters Benefit Trust Funds and as agent for all affected Members of the United Brotherhood of Carpenters and Joiners of America and its Locals, Plaintiff

And:

RES Canada Construction (Ontario) L.P. and RES Canada Construction (Ontario) Inc. and Laari Construction Ltd. and 2309360 Ontario Limited a/o Helios Developments, Defendants

Before: Madam Justice A.C. Trousdale

Counsel: Michael Mazzuca, Counsel for the Plaintiff and Aaron Rousseau, Co-Counsel for the Plaintiff Marc A.J. Huneault, Counsel for the Defendant Laari Construction Ltd. William Ribeiro, Counsel for the Lien Claimant SMS Rents, a Division of SMS Construction and Mining Systems Inc.

Heard: January 26, 2016

Endorsement on Motion

[1] This is a motion brought jointly by the Defendant, Laari Construction Ltd. (herein “Laari”) and by the lien claimant, SMS Construction and Mining Systems Inc. (herein “SMS Rents”) pursuant to Section 45.(1) and Section 47.(1) of the Construction Lien Act, R.S.O. 1990, c. C.30 (herein “the Act”) for:

(a) An Order declaring that the Plaintiff’s claim for lien has expired;

(b) An Order dismissing the Plaintiff’s action as against Laari together with costs of the action on a substantial indemnity basis; and

(c) Costs of this motion on a substantial indemnity basis together with HST thereon.

[2] Laari and SMS Rents seek a finding that the claim for lien registered by the Plaintiff, Ziggy Pflanzer as Trustee of the Ontario Provincial Council of Carpenters Benefit Trust Funds and as Agent for all affected members of the United Brotherhood of Carpenters and Joiners of America and its Locals (herein “the Carpenters Union”) has expired because Laari and SMS Rents claim the lien was improperly registered as the claim for lien does not comply with the requirements of Section 34(5) of the Act.

[3] Laari and SMS Rents argue that the claim for lien did not comply with the requirements of Section 34(5) of the Act because the claim for lien did not contain the names and addresses of the Carpenters Union members who actually did the work.

[4] The Carpenters Union disputes that the claim for lien was improperly registered and seeks that the motion be dismissed.

[5] In the alternative, if Laari and SMS Rents are successful on the motion in full or in part, the Carpenters Union seeks leave that the Court exercise the curative provisions of Section 6 of the Act and that the Carpenters Union be permitted to amend the Carpenters Union’s Statement of Claim accordingly. Further, the Carpenters Union requests a declaration that Section 34(5) of the Act is invalid to the extent of its applicability to workers whose lien arises out of a breach of a collective agreement. Alternatively, the Carpenters Union requests a declaration that an exception be read in to Section 34(5) to allow a union to claim a lien on behalf of its members for breaches of the collective agreement. The Carpenters Union gave a Notice of Constitutional Question to The Attorney General of Ontario and to The Attorney General of Canada, neither of whom appeared at the hearing.

[6] There was insufficient time set for the hearing of this motion and cross-motion. Accordingly, only the motion of the Defendant Laari and SMS Rents was heard. The Plaintiff’s cross-motion including the constitutional question was adjourned to a further date to be set if necessary.

Background

[7] Laari entered into a subcontract with the Defendant, RES Canada Construction for the delivery of pile racking and panel installation for the Newboro Solar Farm (herein “the Newboro Project”) located on County Road 42, Rideau Lakes, Ontario.

[8] Laari subcontracted some portion of its work, being the racking and module installation on the Newboro Project to the Defendant 2309360 Ontario Limited o/a Helios Developments (herein “Helios”).

[9] The Broader Electrical Powers Systems Sector Collective Agreement (“BEPS Agreement”) enables the Carpenters Union to contract with employers that perform work in the renewable energy sector, including solar energy installation.

[10] Helios signed a BEPS Agreement with the Carpenters Union. Laari also signed the identical BEPS Agreement with the Carpenters Union.

[11] It is recognized in the BEPS Agreement with Helios that the Carpenters Union is the exclusive bargaining agent on behalf of all Helios employees who performed bargaining unit work under the BEPS Agreement. Individual employees, being members of the Carpenters Union, are not parties to the collective agreement with Helios. Helios cannot employ or contract out bargaining unit work except to members of the Carpenters Union. The BEPS Agreement sets out hours of work, rates of pay which vary depending on the employee’s classification with the Carpenters Union, holidays, and other such matters.

[12] Helios employed over 60 members of the Carpenters Union to work on the Newboro Project. Helios abandoned the Newboro Project near the end of July, 2014 without completing its work. Shortly thereafter, Helios made an assignment in bankruptcy.

[13] Helios failed to pay the Carpenters Union employees on the Newboro Project for the workweek of July 20 to July 26, 2014.

[14] Helios had failed to file monthly reports regarding hours of work and supplemental benefits for the employees with the Carpenters Union for the months of June and July, 2014 as required pursuant to the BEPS Agreement. Helios failed to pay monetary supplemental benefits owing to the Carpenters Union for June and July, 2014 with respect to the Carpenters Union employees who worked for Helios during those months.

[15] Subsequent to the workweek of July 20 to 26, 2014, Laari immediately employed most of Helios’ former employees who were members of the Carpenters Union to complete Helios’ work at the Newboro Project and Laari paid those employees under the BEPS Agreement. The Carpenters Union assisted Laari in transitioning their members to Laari so that Laari could complete Helios’ work at the Newboro Project.

[16] As Helios had not filed the report for hours of work of the employees and the monetary supplemental benefits, and as Carpenter Union employees were working on other solar farm projects in Ontario for Helios at the same time, the Carpenters Union did not know exactly which employees were working the workweek of July 20 to 26, 2014 at the Newboro Project nor how much monetary supplemental benefits were owing by Helios for the months of June and July, 2014.

[17] The Carpenters Union requested the time sheets from Helios for the Newboro Project for the week of July 20 to 26, 2014, but they were never forthcoming. Helios did not issue any paystubs to Carpenters Union employees for that week.

[18] On August 11, 2014, SMS Rents registered a construction lien for $23,884.41.

[19] On August 21, 2014, the Carpenters Union registered a construction lien. The following gives details of some of the information contained in the lien:

Name of person claiming the lien: Ziggy Pflanzer as Trustee of the Ontario Provincial Council of Carpenters Benefit Trust Funds and as Agent for all affected members of the Carpenters Union and its locals;

Time which services or materials were supplied: May 1, 2014 to July 26, 2014

Short description of the services or materials: Unionized Carpenters’ Labour

Contract Price or Subcontract Price: Collective Agreement for Hourly Wages and Benefits

Amount Claimed: $200,000.00

[20] Two other companies also registered liens but subsequently agreed to discharge their liens and consented to a dismissal of their actions without costs.

[21] On October 7, 2014, the Carpenters Union issued the Statement of Claim in this matter.

[22] The remaining lien claimants are SMS Rents and the Carpenters Union. Laari does not dispute the timeliness or quantum of SMS Rents’ claim for lien.

Issues

[23] Initially Laari and SMS Rents claimed that the Carpenters Union claim for lien did not comply with Section 34(5) of the Act as it did not:

(a) identify the name and address of the person claiming the lien;

(b) provide a short description of the services or materials that were supplied;

(c) identify the contract price or subcontract price for each lien claimant;

(d) specify the amount claimed per person.

[24] In its Factum in Reply, however, Laari agrees with the Carpenters Union that the issue on this motion is whether the claim for lien of the Carpenters Union has expired pursuant to Section 31 of the Act as the claim for lien registered failed to comply with Section 34(5) of the Act because it failed to identify the names of the workers, their addresses and their contact details. In fact, Laari submits in paragraph 3 of its Factum in Reply that the Court need only focus on whether the names of the workers should be stated on the claim for lien.

Analysis

[25] Section 34(5) of the Act states:

(5) Every claim for lien shall set out,

(a) the name and address for service of the person claiming the lien and the name and address of the owner of the premises and of the person for whom the services or materials were supplied and the time within which those services or materials were supplied;

(b) a short description of the services or materials that were supplied;

(c) the contract price or subcontract price;

(d) the amount claimed in respect of services or materials that have been supplied; and

(e) a description of the premises,

(i) where the lien attaches to the premises, sufficient for registration under the Land Titles Act or the Registry Act, as the case may be, or

(ii) where the lien does not attach to the premises, being the address or other identification of the location of the premises. R.S.O. 1990, c. C.30, s. 34 (5) ; 2010, c. 16 , Sched. 2, s. 2 (8).

[26] Section 35(8) of the Act provides that any number of persons having liens upon the same premises may unite in a claim for lien.

[27] The Act does not define the term “person claiming the lien” nor does the Act define “person”.

[28] In section 1.(1) of the Act, the term “person having a lien” is defined as “includes both a lien claimant and a person with an unpreserved lien.” However, this term is not used in Section 34.(5)(a) of the Act.

[29] The Carpenters Union argues that if the legislative drafter had meant that the name of the individual worker needed to be used, Section 34(5) would refer to “person having a lien”, rather than “person claiming the lien”.

[30] Laari and SMS Rents argue that a “worker” as defined in Section 1(1) of the Act “means a person employed for wages in any kind of labour.”

[31] The term “wages” as defined in Section 1(1) of the Act ‘means the money earned by a worker for work done by time or as piece work, and includes all monetary supplementary benefits, whether provided for by statute, contract or collective bargaining agreement”.

[32] The term “workers’ trust fund” as defined in Section 1(1) of the Act “means any trust fund maintained in whole or in part on behalf of any worker on an improvement and into which any monetary supplementary benefit is payable as wages for work done by the worker in respect of the improvement”.

[33] Laari and SMS Rents submit that as “person” is not defined in the Act, resort should be had to Section 87 of the Legislation Act, 2006, c.21, Sch. F. which states that in every Act and regulation, “person” includes a corporation.

[34] Laari and SMS Rents argue that it is significant that the former act, the Interpretation Act, R.S.O. 1990, c.I.11 at Section 29, which was the predecessor to the Legislation Act, 2006 defined “person” in a more expansive fashion. It defined “person” as including “a corporation and the heirs, executors, administrator or other legal representatives of a person to whom the context can apply according to law”.

[35] It is the position of Laari and SMS Rents that because of the narrowing in the definition of “person” as set out above, the term “person claiming the lien” cannot include a union as a union does not come within the definition of “person”. They argue that the lien belongs to the worker who did the work and that the name of the person claiming the lien, must be the worker who actually did the work and to whom the lien belongs and the name of the worker, must be included on the lien.

[36] In the case before me, the person claiming the lien is Ziggy Pflanzer who identifies himself as Trustee of the Ontario Provincial Council of Carpenters Benefit Trust Funds and as agent for all affected members of the Carpenters Union and its Locals. The names of the workers who are members of the Carpenters Union and who actually did the work on the Newboro Project in respect of which wages and monetary supplemental benefits are owed, are not named on the claim for lien nor on a schedule to the claim for lien.

[37] Laari and SMS Rents argue that Ziggy Pflanzer is not a person who supplied services or materials to an improvement for an owner, contractor or subcontractor, nor does he purport to have done so, and therefore he does not have a lien pursuant to Section 14(1) of the Act.

[38] Similarly, Laari and SMS Rents submit that the Carpenters Union cannot be the lien claimant as the Carpenters Union is not a “person” and therefore cannot be the “person claiming the lien.”

[39] Laari and SMS Rents provided evidence of liens claimed by other unions which either named the affected workers on the face of the claim for lien or as a schedule to the claim for lien. Laari and SMS Rents maintain that this is the proper and required way to comply with Section 34(5) of the Act. Most of those examples had an agent for the union involved making the claim for lien with the actual workers named in a schedule. In some of the examples the agent said he was “agent for all affected workers, including the workers named below”, and then a list of workers. Only one of those schedules actually provided the amount which was owing to each of the individuals listed on the schedule. It is Laari and SMS Rents’ position that it is only the lawyer for the Carpenters Union who is preparing claims for liens without listing the actual workers involved.

[40] Laari and SMS Rents do not dispute that an agent may make the claim for the workers, but their position is that the workers’ names must be stated on the claim for lien or on a schedule attached to it.

[41] With respect to the claim for monetary supplementary benefits by the Carpenters Union Trust Fund, Laari and SMS Rents rely on Section 81(2) of the Act for their argument that where the monetary supplementary benefits are payable to the Carpenters Union rather than to the worker, the workers’ trust fund is subrogated to the rights of the worker under the Act with respect to those benefits. As a result, Laari and SMS Rents again argue that the claim is the workers’ claim and that the names of the workers must be stated on the claim for lien or on an attached schedule.

[42] Laari and SMS Rents rely on the case of IBEW Trust Fund, Local 353 v. 779857 Ontario Inc. (2004), 36 C.L.R. (3d) 48, as an example of where an agent for the Trustee of I.B.E.W. Trust Funds was named in the claim for lien as well as 77 workers were named in the claim for lien. In that case, the issue was whether the claim for lien was timely.

[43] The Carpenters Union submits that it is not required to name the individual members of the Carpenters Union who actually did the work and to whom wages are owed. The Carpenters Union relies on the fact that pursuant to the BEPS Agreement signed by Helios (and the identical BEPS Agreement signed by Laari), the Carpenters Union is recognized as the exclusive bargaining agent for all employees provided by the Carpenters Union to Helios, and that the Carpenters Union is entitled to claim wages and monetary supplementary benefits owing to Carpenters Union members. Further, the Carpenters Union relies on its Trust Agreement (Restated Declaration of Trust Continuing The Ontario Provincial Council of Carpenters Health Benefits Trust Fund dated January 1, 2007) which in Article 10.5 states that the Trustees are authorized to receive additional sums from Employers in addition to the Contributions (defined term in Article 2.08 which includes payments made by an Employer in accordance with the terms of a Collective Agreement) contemplated in the Trust Document, which sums are for purposes other than contemplated herein, and to redirect such sums to the appropriate person, body, or, trust fund.

[44] The Carpenters Union also relies on the case of IBEW Trust Fund, Local 353 v. 779857 Ontario Inc. as an example of where naming the 77 workers actually caused confusion for Master Sandler in terms of to whom monies were owing and to whom monies were to be paid.

[45] The Carpenters Union’s position is that the realities of the construction industry are that workers from the Carpenters Union may be working on several different projects for the same employer at the same time, such as was the case with Helios which was working on several different solar farm projects in Ontario at the same time, and employed Carpenters Union members at those different projects. The Carpenters Union argues that it is not always possible for the Carpenters Union to know exactly which employees were working where, particularly when an employer such as Helios is delinquent in providing time sheets or sign-in sheets, or the monthly reports for hours of work for each employee and monetary supplementary benefits. As a result of the employer not providing the information, it is not always possible for the Carpenters Union to know which members of the Carpenters Union are actually affected at the time the claim for lien is registered.

[46] As Laari hired most of the employees who had been working for Helios, it was Laari who ended up with the information as to which employee members of the Carpenters Union had worked the week of July 20 to July 26, 2016. Laari assisted the Carpenters Union in collecting information and provided the Carpenters Union with a spreadsheet listing of Carpenters Union employees and their hours of work at the Newboro Project. The Carpenters Union then had to investigate and verify these amounts with their members which took time to complete.

[47] It was only some time much later that the Carpenters Union was able to verify that 61 members of the Carpenters Union had been working for Helios during the week of July 20 to July 26, 2014 and that Helios owed wages for that week for those employees in the sum of $72,213.25. The Carpenters Union was also subsequently able to determine that Helios owes monetary supplemental benefits for Carpenter Union employees from May to July 2014 in the sum of $71,942.21. This makes a total amount owed by Helios in the sum of $144,156.43.

[48] The Carpenters Union provided evidence of other claims for liens made by the Carpenters Union and other unions where the individual workers were not named in the claim for lien, and where the union representative made the claim for lien as agent for the affected members of the union without naming the individual workers. The Carpenters Union also provided evidence showing other lawyers, other than the lawyer for the Carpenters Union, prepared claims for liens without providing a list of the workers, although Laari’s counsel pointed out that many of these examples predated the change in the definition of “person” in the Legislation Act, 2006.

[49] The Carpenters Union presented evidence from a couple of long-time union trustees/union business agents as to the practice of registering construction liens involving union members in Ontario. The evidence was that it is the union as bargaining agent for the member who retains and instructs counsel to register and perfect liens on behalf of their members, and not the members themselves who do so. Both of these trustees/business agents stated that they had been involved in hundreds of construction liens involving members, and that this is the very first time that any party has challenged a union lien on the basis that the lien did not name the individual members and what each one was owed.

[50] Laari and SMS Rents were not able to provide any case law where a claim for lien was held not to comply with Section 34(5) of the Act because there was no list of the workers provided as part of or as a schedule to the claim for lien.

[51] I find on the evidence before me that there is varying practice in Ontario regarding claims for liens involving union members. Some lawyers list the actual names of the workers on the claim for lien or on an attached schedule. Other lawyers refer only to the person claiming the lien as “agent for the affected members” of the particular union.

[52] I note that none of the examples of claims for liens provided by Laari and SMS Rents which contained the names of the workers on the claim for lien or on an attached schedule, contained the address for service beside the name for each of those workers. If Laari and SMS Rents are correct that Section 34(5)(a) of the Act has not been complied with by the Carpenters Union in this case, then by extension none of the examples provided by Laari and SMS Rents would comply with Section 34(5) as each individual worker’s address for service was not provided.

[53] I find that “the person claiming the lien” in Section 34(5)(a) of the Act is not defined. I find that showing the person claiming the lien as Ziggy Pflanzer as Trustee of the Ontario Provincial Council of Carpenters Benefit Trust Funds and as agent for all affected members of the Carpenters Union and its locals adequately identified the group of workers involved for anyone reading this claim for lien and provided an address for service for the person claiming the lien.

[54] If there were any question or confusion regarding the claim for lien, there are provisions for requesting information in Section 39 of the Act. Further, Section 40 of the Act provides for the right of cross-examination of the lien claimant, an agent or assignee of the lien claimant, and a trustee of the workers’ trust fund.

Decision

[55] I find that the Carpenters Union complied with Section 34(5) of the Act. The person making the claim for lien identified himself as a Trustee of the Carpenters Union, and as agent for the affected workers of the Carpenters Union. I find that the workers were sufficiently identified.

[56] The motion brought by Laari and by SMS Rents is dismissed. The Plaintiff’s action may proceed.

[57] As the motion is dismissed, there is no need to hear the cross-motion of the Carpenters Union.

Costs

[58] If the parties are unable to agree on the issue of costs, the parties may submit written submissions as to costs limited to no more than four typewritten pages, plus a Bill of Costs. The Carpenters Union shall submit any written submissions regarding costs within 30 days of the release of this decision. Laari Construction Ltd. and Rents shall submit any written submissions regarding costs within 30 days of receipt of the Carpenters Union’s written submissions. The Carpenters Union shall have 15 days from receipt thereof to reply with written submissions of no more than two typewritten pages.

Madam Justice A.C. Trousdale Date: April 27, 2016 Released: April 27, 2016