Court File and Parties
COURT FILE NO.: CV-15-531082 DATE: July 4, 2016
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: CV-15-531082 Limen Group Ltd. v Allform Group Limited and Burnac Holdings Limited
AND RE: CV-15-529283 Scott Forest Products Ltd. v. Allform Group Limited and Burnac Holdings Limited
AND RE: CV-15-537037 Aluma Systems Inc. v. Allform Group Limited and Burnac Holdings Limited
AND RE: CV-15-532198 Aluma Systems Inc. v. Allform Group Limited and Burnac Holdings Limited
BEFORE: Master C. Albert
COUNSEL: J. Armel, for the moving party Limen Group Ltd. R. Kennaley [1], for the responding parties Aluma Systems and Scott Forest P.E. DuVernet for Burnac Holdings Limited
MASTER C. ALBERT
ENDORSEMENT
Limen Group Ltd. (“Limen”), a subcontractor and lien claimant on the project referred to as 377 Madison Avenue (the “Project”), asks the court to strike out four lien claims registered by co-subcontractors Aluma Systems Inc. (“Aluma”) and Scott Forest Products Ltd. (“Scott”). Limen registered a lien claim for $386,649.00. The lien claims filed by Alluma and Scott total $273,181.52. Limen alleges that Aluma and Scott registered their lien claims against the wrong premises. If Limen succeeds on this motion then it would not be required to share the holdback funds of $157,000.00 posted by owner Burnac Holdings Limited (“Burnac”) with Alluma and Scott.
Limen’s position is that the improvement to which all three subcontractors supplied services and materials is confined to the lands described in the Ontario Land Titles registry system as PIN 21219-0161, and the only lien claim registered against that PIN is the Limen lien claim. Alluma and Scott registered their lien claims against PINS 21219-0159 and 21219-0160, being lands adjacent to PIN 21219-0161. Limen argues that the evidence is clear that the “improved” lands, as that term is defined by the Construction Lien Act, R.S.O. 1990, c.C.30 (the “Act”) are the lands described as PIN 21219-0161 and not PINS 21219-0159 and 21219-0160.
Alluma and Scott take the position that their lien claims are not fatally flawed because PINS 21219-0159 and 21219-0160 are included in the improvement and as such meet the definition of improved premises in the Act. Alternatively they argue that whether or not PINS 21219-0159 and 21219-0160 are included in the improved premises raises a genuine issue that requires a trial.
Relevant facts
The evidence before the court is based on affidavits from two individuals. The first deponent, Mr. Pasha, is an engineer and Burnac’s director of construction. He was on the Project site daily as construction manager. Limen tendered his affidavit in support of its motion. He was not cross-examined. The second deponent, Mr. Dolson, is a sales representative for Aluma. He deposed an affidavit on behalf of the responding parties and was cross-examined viva voce at the motion hearing. He did not attend at the site regularly or at all after arranging for the delivery of construction materials early on in the Project.
I find the evidence of Mr. Pasha more reliable than that that of Mr. Dolson, given Mr. Pasha’s daily attendance at the site and his supervisory function as construction manager. Burnac has nothing to gain from the evidence of Mr. Pasha, having posted security to be shared among the lien claimants and having no expectation of any refund from the holdback funds posted. Burnac is no longer an active participant in this lawsuit. Mr. Pasha’s evidence is more impartial than that of Mr. Dolson.
On the other hand, Mr. Dolson is a sales representative for Aluma, a party to the litigation claiming entitlement to a pro-rated share of the holdback funds. He has no firsthand knowledge of the how the Project was carried out. His only attendance at the site was at the outset in 2014 when materials were ordered. He has no knowledge of whether construction workers used PINS 21219-0159 and 21219-0160 for any purpose during construction. Most of his evidence is based on supposition and speculation.
Burnac contracted with Allform Group Limited (“Allform”) as its excavation and forming subcontractor. Allform, in turn, subcontracted with Aluma to supply shoring, forming and scaffold equipment, and with Scott to supply lumber. Allform abandoned the Project on or about April 10, 2015. Both Alluma and Scott were suppliers of materials only and not suppliers of installation or other services.
Between April and July 2015 Limen, Aluma and Scott registered five lien claims against the PINS indicated beside each lien claim listed in the following chart:
| Instrument/Date | Lien claimant | Amount | PIN(S) |
|---|---|---|---|
| AT3863583 April 22, 2015 | Limen | $386,649.00 | 21219-0161 |
| AT3856274 April 14, 2015 | Aluma | $80,778.00 | 21219-0159 & 21219-0160 |
| AT3943295 July 10, 2015 | Aluma | $44,979.65 | 21219-0160 |
| AT3949346 July 16, 2015 | Aluma | $104,598.87 | 21219-0159 & 21219-0160 |
| AT3857475 April 15, 2015 | Scott | $42,825.00 | 21219-0159 & 21219-0160 |
PIN MAP EXTRACT:
The Project includes a multilevel condominium building and several townhouses. It is bounded on the west by Madison Avenue and on the east by Huron Street. Site access is via Huron Street.
The site is protected by hoarding that surrounds lands described as PINS 21219-0159, 21219-0160 and 21219-0161. The PIN map (reproduced herein) illustrates that PINS 21219-0159 and 21219-0160 are at the northwesterly portion of the site and PIN 21219-0161 is included in a grouping of multiple PINS that make up a large portion of the hoarded site.
The hoarding was in place prior to the commencement of construction. According to Mr. Pasha the hoarding was erected to keep out trespassers. It is not in dispute that safety codes in Ontario require property owners to erect barriers around construction sites. Even though Mr. Pasha describes the purpose of the hoarding as a means of keeping out trespassers, it is obvious that it also serves as a safety barrier to keep unauthorized people, animals and vehicles from entering the construction site. There is not a separate construction safety fence around the lands identified as PIN21219-0161 separating it from the lands described as PINS 21219-0159 and 21219-0160. Nor is there any demarcation or internal separation of the lands described as PINS 21219-0159 and 21219-0160 from each other or from 21219-0161.
Affixed to the hoarding, including the portions of the hoarding on the street-side perimeter of PINS 21219-0159 and 21219-0160, is signage that advertises the condominium development called “Southhill on Madison”. The hoarding on the perimeter of PINS 21219-0159 and 21219-0160 is no different from the hoarding on the perimeter of 21219-0161.
The buildings constructed on the site of the Project are all sitting on PIN 21219-0161, including the multiple level condominium building and the townhouses. No structures have been erected on the lands described as PINS 21219-0159 and 21219-0160.
The municipal address of the condominium building is 377 Madison Avenue. A search of that address discloses PIN 21219-0161. But there is no evidence that the contracts between Allform and its subcontractors, Alluma and Scott, identified the Project by municipal address. Nor is there any evidence before the court as to whether PINS 21219-0159 and 21219-0160 have been assigned separate and distinct municipal addresses from PIN 21219-0161.
In response to speculation advanced by Mr. Dolson that portions of the construction would necessarily have required Burnac to use the lands at PINS 21219-0159 and 21219-0160 to facilitate construction, Mr. Pasha explains that the excavation, formwork and concrete work carried out on the west side of the foundation was accessed from inside PIN 21219-0161 and not via PINS 21219-0159 and 21219-0160. Mr. Dolson’s speculative evidence is of no probative value but it does raise the issue of the role of PINS 21219-0159 and 21219-0160 in the Project.
There is no evidence before the court of the municipal zoning and planning approvals obtained by the developer and whether the lands adjacent to the structures erected on PIN 21219-0161, namely PINS 21219-0159 and 21219-0160, were required to be retained as open space or amenity space for the benefit the condominium and townhouse development. Nor is there any evidence of a building permit and the description of lands to be improved as disclosed by the building permit.
Nor have any of the construction contracts, engineering drawings, legible architectural plans or foundation drawings been tendered in evidence to show the description of the lands to be improved and the relationship of the adjacent lands owned by Burnac at PINS 21219-0159 and 21219-0160 to the lands at PIN 21219-0161.
The foundation of the condominium building abuts PIN 21219-0160. It is not in dispute that at some point in the Project Burnac will be required to use PIN 21219-0160 for the purpose of installing masonry and cladding on the condominium building on PIN 21219-0161.
Limen admits that if PINS 21219-0159 and 21219-0160 have not been used for construction purposes in the past but are used in the future then these lands may fall within the definition of improved premises. But Limen argues that if the only use is for the purpose of encroaching to facilitate installation of masonry and cladding on the improvement on PIN 21219-0161 then it is no different from neighbour #1 encroaching on the lands of neighbour #2 (with permission, in the nature of a licence) to carry out an improvement to the lands of neighbour #1: such use would not create lien rights against the lands of neighbour #2.
The issue in this case, however, is whether Burnac as owner of all of the PINS in question, has treated the entire site as one Project or whether it has delineated and hived off the lands at PINS 21219-0159 or 21219-0160, ensuring that they are not used for purposes of the improvement.
The Law as applied to the facts in this case
The motion is brought pursuant to section 47 of the Act. It is well settled law that such motions are akin to summary judgment motions. If there are genuine issues of fact that require a trial then the motion fails and the case must proceed to trial.
The onus is on the moving party to prove that the lien claimants registered their claims for lien against the wrong lands and therefore there is no genuine issue requiring a trial.
I am not persuaded that the lien claims of Alluma and Scott were registered against the wrong lands.
First, the hoarding that surrounds the construction site encases PINS 21219-0159 and 21219-0160 as well as PIN 21219-0161. The signage on the hoarding describing the condominium and townhouse project is not confined to PIN 21219-0161. There is no separation between PINS 21219-0159 and 21219-0160 as lands not subject to the improvement and PIN 21219-0161 as lands subject to the improvement. A trial is required to determine whether PINS 21219-0159 and 21219-0160 are included in the improved lands.
Second, there is no evidence that PINS 21219-0159 and 21219-0160 have separate municipal addresses from PIN 21219-0161. The municipal address of the condominium building is 377 Madison Avenue. Had the lien claimants searched that address they would have discovered that this address includes PIN 21219-0161 and they would not have made the mistake of omitting PIN 21219-0161 from the description of the improved lands in their lien claims.
However, there is no evidence that the contracts between Allform and each of its subcontractors, Alluma and Scott, identified the Project by municipal address. If the contracts did not refer to the Project by municipal address then there is no evidentiary foundation to make a finding that the lien claimants ought to have known the correct municipal address and the PINS attached to that address for purposes of registering a lien claim. This raises a genuine issue for trial, particularly since the construction site was fenced in by one large fence that cordoned off all three PINS into one large area that to the outside world appeared to be a construction site.
Third, the evidence is unclear as to the extent to which access to PINS 21219-0159 and 21219-0160 will be required or has been used to complete the masonry and other exterior work to the condominium building situated on PIN 21219-0160, and the arrangements made for access, if any. This raises a genuine issue for trial as to whether PINS 21219-0159 and 21219-0160 are included in the improved lands.
Fourth, the absence of any evidence regarding the municipal planning approval for the site, including the site plan approval, which would likely identify clearly the lands approved for development and the use permitted or required for the various portions of the site, is glaring. Section 34 of the Act provides that a lien is preserved by registering a claim for lien against the premises. “Premises” is a defined term and includes lands “enjoyed therewith”.
In [Phoenix Drywall v Mississauga Rest Home Two Inc.][2] Phoenix had registered a lien claim against vacant lands adjacent to the rest home. The actual structure to which Phoenix had supplied drywall services and materials was the rest home itself. But Phoenix had registered its claim for lien against the parking lot lands under the same ownership and adjacent to the rest home lands. The parking lot and the rest home were under common management. The court determined that the vacant parking lot lands were integrated with the rest home lands and enjoyed a common purpose. Justice Goodearle found that the parking lot lands fell within the definition of “premises” as lands enjoyed with the lands that were improved and on that basis the lien had not been registered against the wrong lands.
In the present case there is insufficient evidence before the court to make a finding of fact as to whether the lands described as PINS 21219-0159 and 21219-0160 are lands that are included in the premises on the basis that they are or are required to be “enjoyed therewith” in relation to PIN 21219-01601. There is no evidence as to whether the developer is required to retain the lands at PINS 21219-0159 and 21219-0160 as amenity space, parking space or open space in exchange for municipal approvals for the development of the multilevel condominium and townhouse Project. Whether PINS 21219-0159 and 21219-0160 are lands included in the improved “premises” raises a genuine issue for trial.
Fifth, the construction contracts, engineering drawings, architectural plans and foundation drawings would likely identify the lands subject to the improvement. Their absence in evidence tendered on the motion is significant and raises a genuine issue for trial.
Sixth, there is no evidence of the municipal address attached to PINS 21219-0159 and 21219-0160, and whether it is the same or different from 377 Madison Avenue, evidence that is relevant to a finding of fact as to whether PINS 21219-0159 and 21219-0160 are included in the improved lands. This raises a genuine issue for trial.
Finally, there is very little evidence as how Burnac as owner treated the lands identified by the three separate PINS. Did Burnac caution its workers to stay off of PINS 21219-0159 and 21219-0160, to ensure that no construction materials were left on PINS 21219-0159 and 21219-0160 and to ensure that no construction vehicles travel over PINS 21219-0159 and 21219-0160? If workers were so instructed and failed to adhere to the cautions did Burnac reprimand them? Or did Burnac treat all of the lands enclosed by the hoarding, including PINS 21219-0159 and 21219-0160, as the construction site? An inquiry into these facts is required to determine whether the lien claimants registered their claims for lien against lands that were not included in the improvement. This raises a genuine issue for trial.
Conclusion
For all of these reasons I find that the motion brought by Limen to discharge the lien claims of Scott and Aluma must fail. There are genuine issues of fact that require a trial.
Costs submission may be made at the return date of July 4, 2016 at 2:30 p.m.
Master C. Albert. DATE: July 4, 2016
COURT FILE NO.: CV-15-531082 DATE: July 4, 2016
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Limen Group Ltd. v Allform Group Limited
BEFORE: Master C. Albert
COUNSEL: J. Armel, for the moving party Limen Group Ltd. R. Kennaley, for the responding parties Aluma Systems and Scott Forest P.E. DuVernet for Burnac Holdings Limited
ENDORSEMENT
Master C. Albert
DATE: July 4, 2016
Footnotes
[1] The court notes that counsel for the responding parties appearing on the motion is not the same as the lawyer who acted for the lien claimants at the time the lien claims were registered by Alluma and Scott. [2] 1988 CarswellOnt 766