COURT FILE NO.: CV-16-556828 DATE: August 26, 2016
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Diamond Drywall Contracting Inc. and Danyal Ikram et al
BEFORE: Master C. Albert
COUNSEL: L. J. Levine, for the defendant (moving party) R. A. Gosbee, for the plaintiff (responding party)
MASTER C. ALBERT
ENDORSEMENT
The defendant owners (“Ikram”) ask the court to discharge the construction lien registered by the plaintiff (“Diamond”) on May 20, 2016 for $201,253.00 as instrument AT4223739 and to vacate the corresponding certificate of action. The motion is brought pursuant to section 47 of the Construction Lien Act, R.S.O. 1990, c.C.30.
Diamond resists the motion on the basis that there are genuine issues of fact and credibility that require a trial.
The Issues
- The issues are:
a) What is the applicable test under rule 47?
b) Has Ikram satisfied the burden of proving that there are no genuine issues requiring a trial in respect of all or a portion of the lien claim?
The Scope of Inquiry Under Rule 47
Rule 47 of the Act provides that the court may discharge a construction lien on any proper ground. It is well settled law that a motion brought pursuant to section 47 of the Act is akin to a motion for summary judgment (see: Beaver Materials Handling Co. v Hejna [1] citing Dominion Bridge Inc. v Noell Stahl [2]). Both of those cases were decided prior to the shift in the court’s approach to summary judgment proceedings brought about by the decision of the Supreme Court of Canada in Hryniak v Mauldin [3].
In addressing the delay and expense of protracted litigation the Supreme Court of Canada provided guidance on the expanded use of summary proceedings when the trier of fact is able to reach a fair and just determination on the merits of the motion. The Supreme Court opined that this will be the case when the summary process allows the trier of fact to:
a) Make the necessary findings of fact,
b) Apply the law to the facts, and
c) The motion process is a more proportionate, more expeditious and less expensive means to achieve a just result.
After the Hryniak decision Rule 20, the summary judgment rule, was amended to grant expended powers to judges on summary judgment motions. Those expanded powers were not extended to masters hearing rule 20 motions. Diamond argues that as a master I do not have the expanded powers prescribed by rule 20 because those powers do not extend to masters hearing summary judgment motions.
I disagree. A motion brought pursuant to rule 47 is not an actual motion for summary judgment. At most, it is a motion “akin” to a motion for summary judgment, quoting Justice Ferrier in Dominion Bridge. A motion under section 47 is made to “the court”. The Act does not require such motions to be heard by a judge. Moreover, section 67 of the Act requires the court to adopt procedures in an action that are “as far as possible of a summary character, having regard to the amount and nature of the liens in question”.
Reading section 47 and 67 together, I find that as a master hearing a motion under section 47 of the Act I am entitled to import all of the powers available on a motion for summary judgment, the motion being akin to a motion for summary judgment. This is particularly important in Toronto Region where the Superior Court of Justice has delegated much of the construction lien work of the court to two masters whose work is devoted in one case exclusively and in the other case partially to construction lien matters.
Consequently, to the extent necessary, I conclude that on a motion pursuant to section 47 of the Act I have the jurisdiction to weigh evidence, make findings of fact and apply the law to the facts.
Does the Motion Raise Genuine Issues Requiring a Trial?
The test is whether the issues raised on the motion require a trial or whether the court is able to make findings of fact necessary to reach a fair and just determination of the motion.
Ikram asks the court to discharge the claim for lien in its entirety on the basis that the lien claim expired prior to registration.
As a direct contractor with the owner, Diamond’s lien claim must be registered within 45 days following completion or abandonment of the contract (section 31(2) of the Act). It is well settled law that repair work does not extend lien rights. Similarly, a trivial amount of work performed after a lien has expired does not revive lien rights.
Abandonment requires a cessation of work with an intention not to return to complete the work. That is not the case here. Diamond performed work in April, May and possibly June 2015 but then a fire in July 2015 destroyed all of the work they had carried out. Diamond’s evidence is that it intended to return to the project once the insurance had paid out the insurance claim arising from the fire and Ikram had paid for the work completed to that date.
Diamond had issued three invoices prior to the fire on the dates and in the amounts shown:
a) April 14, 2015 $ 86,445
b) April 29, 2015 $ 33,674
c) June 15, 2015 $ 73,450
$193,569
The evidence of payment is unclear. Copies of a bank draft and some receipts filled out improperly were tendered as evidence but there is no evidence from the person signing the receipt on behalf of the alleged payor, Ikram. On this motion I am unable to make any findings of fact as to whether any or all of the amounts invoiced were paid. However, I need not make such findings of fact to reach a determination on this motion.
The next question is whether the 2015 contract had been completed. Comparing the amount invoiced and the items listed in the invoices with the contract relied on by Diamond on this motion it is clear to me that all of the work in the contract relied on by Diamond had been completed prior to the final invoice.
Ikram’s conduct is consistent with a finding that the contract with Diamond was at an end. It obtained a quote from another drywall contractor, Marel, on June 3, 2016. There are text messages in the motion records showing communications regarding payment for earlier work but no texts, emails, letters or other communications about Diamond returning to the project to complete the original contract work.
On a motion under section 47 of the Act the responding party must put its best evidence forward to prove that the contract remains ongoing.
Much of the evidence is disputed and raises issues of credibility. However, on the issue of whether the original contract had been completed I do not need to rely on any of that contradictory evidence. I rely instead on the fact that Diamond had invoiced for all of the work completed in 2015. By June 15, 2015 Diamond had invoiced Ikram for the entire contract price reflected in the contract relied on by Diamond on this motion and attached as exhibit “F” to the affidavit of Mr. Seferovic. By June 15, 2015 the contract had been completed.
I also rely on the fact that the only communications between the parties produced on this motion pertain to getting paid for the 2015 work and not to the return by Diamond to complete the work in the original contract, and that the most controversial issue goes to whether Diamond carried out any work on May 4, 5 and 6, 2016, the dates on which Diamond relies as the last work for purposes of registering a claim for lien.
As to the latter point, as already stated, as a direct contractor Diamond’s claim for lien runs from completion or abandonment of the contract. For purposes of determining whether the 2015 work was part of the same contract that Diamond relies on for the work it claims to have performed in May 2016, I need not make findings of fact as to:
a) Whether the contract in Diamond’s motion record at Tab F is bona fides,
b) Whether any work was performed on May 4, 5and 6, 2016.
I am satisfied that Diamond treated the original contract as at an end. That contract work had been completed. After the fire new permits were required. The house had to be reconstructed and there is no evidence that the original contract continued. If it did it would have continued as a new contract for the same scope of work, but I need not decide that issue.
The amounts that Diamond invoiced in 2015 pertain to the contract completed by that date and the last date to preserve a claim for lien in respect of that work expired 45 days thereafter. That lien claim could not be revived by new work after the fire in May 2016.
There is conflicting evidence as to whether Diamond carried out specified work on May 4, 5 and 6, 2016. Diamond’s own evidence conflicts: in the claim for lien Diamond asserts that it completed its work on April 29, 2016 but in its affidavit evidence on this motion Diamond claims to have carried out its work on May 4, 5 and 6, 2016. Diamond’s evidence is corroborated by a worker.
Ikram’s evidence, on the other hand, corroborated by the engineer and the carpenter, is that Diamond did not carry out any work on May 4, 5 and 6, 2016 and the house was not sufficiently advanced by May 4, 2016 for Diamond to have been able to carry out the work it claims to have performed on these dates.
I find that the issue of fact of whether Diamond performed any work on May 4, 5 and 6, 2016 raises significant issues of credibility that cannot be resolved on a motion. The disputed facts raise genuine issues as to the date of supply of services and materials such that a trial is required.
The work performed on those dates, if indeed it is found to have been performed, is reflected in Diamond’s invoice of May 10, 2016 for $7,684.
Conclusion
For the reasons expressed I find that there is no genuine issue for trial as to $193,569.00 of the amount claimed in Diamond’s claim for lien. The lien claim is reduced from $201,253.00 to $7,684.00. Upon the posting of security in the amount of $7,684.00 plus 25 percent for costs (total $9,605) the lien claim and certificate of action may be vacated from title.
Diamond’s claim for the $193,569.00 invoiced in 2015 may continue as a claim in contract.
Costs: It is appropriate for costs to follow the event. Having heard the submissions of counsel, and taking into account the relevant factors set out in rule 57.01, rule 1.04, rule 49 and section 86 of the Act costs are fixed at $10,000.00 payable by the plaintiff to the defendant in the cause.
Master C. Albert.
DATE: August 26, 2016