CITATION: Burmet Northern Ltd. v. Kashechewan First Nation et al, 2016 ONSC 7289
COURT FILE NO.: CV-14-0253
DATE: 2016-11-22
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
BURMET NORTHERN LTD.,
Michael Harris, for the Plaintiff
Plaintiff
- and -
KASHECHEWAN FIRST NATION (formerly Fort Albany Indian Reserve No. 67) and HER MAJESTY THE QUEEN IN RIGHT OF CANADA
Gannon Beaulne, for the Defendant Kashechewan First Nation
Julie Greenspoon, for the Defendant Her
Majesty the Queen in Right of Canada
Defendants
HEARD: October 6, 2016,
at Thunder Bay, Ontario
Regional Senior Justice D. C. Shaw
Decision On Motion
Introduction
[1] The plaintiff, Burmet Northern Ltd., is a construction company. It brings an action against Kashechewan First Nation and the federal Crown for payment of $3,342,109.52 pursuant to a contract that Burmet entered into with the First Nation for the supply of labour, materials and equipment for demolition, site work and reconstruction of residences damaged by flooding on lands owned by the Crown and reserved for and occupied by the First Nation.
[2] The plaintiff further claims that in default of payment of the sum claimed, it seeks a sale of the lands in question pursuant to the Construction Lien Act, R.S.O. 1990, c.C.30, as amended.
[3] The Crown moves to strike the plaintiff’s claim on the grounds that the Construction Lien Act does not apply to the federal Crown nor does the Construction Lien Act apply in respect of lands reserved for the First Nation.
[4] Further, the Crown submits that the Crown is not party to the contract between Burmet and the First Nation, so that the statement of claim discloses no reasonable cause of action against the Crown.
[5] The Crown seeks an order amending the name of the defendant, “Her Majesty the Queen in Right of Canada,” to “the Attorney General of Canada”, pursuant to s. 23(1) of the Crown Liability and Proceedings Act, R.S.C. 1985, Chapter c-50.
[6] On the hearing of the motion, counsel for Burmet conceded that the Construction Lien Act did not apply to the federal Crown nor to the lands in question that are reserved for the First Nation.
[7] Counsel for Burmet also acknowledged that the correct name for the Crown as a defendant in this case is “the Attorney General of Canada.”
[8] In light of the concession that the Construction Lien Act is not applicable in this case, Burmet seeks leave to amend its statement of claim to claim unjust enrichment and quantum meruit.
[9] Burmet refers to its claim for payment as against both the First Nation and the Crown in its prayer for relief which it submits is a claim separate from its claim under the Construction Lien Act. Burmet submits that a claim for unjust enrichment and quantum meruit is supported by the allegations at paragraph 13 of its statement of claim:
- The property was improved by the Plaintiff on behalf of, with the consent of, and for the direct benefit of the Defendants who were, at all material times, an owner within the meaning of the Construction Lien Act, R.S.O. 1990, c.C.30., and any amendments thereto.
[10] Burmet submits that this claim is not dependant on privity of contract between itself and the Crown. Rather, Burmet submits that the Crown is responsible on grounds of unjust enrichment and quantum meruit for the debts incurred in the improvement of the lands because of the relationship that the Crown has with the First Nation pursuant to the Indian Act, R.S.C. 1985 Chapter I-5, s. 18(1), and because of the Crown’s ownership of the lands.
[11] The Crown opposes Burmet’s request for leave to amend. The Crown notes that although Burmet has requested leave to amend in its Factum and orally, in submissions, it has not brought a formal motion to amend, with a draft amended statement of claim. Further, the Crown submits that no facts have been alleged which would allow an amendment as sought to be made and that the plaintiff is barred under the Limitations Act, 2002, S.O. 2002, c.24, Sched. B from advancing a claim that arose more than two years ago. In particular, the Crown submits that no facts are pleaded regarding any privity of contract between Burmet and the Crown.
Discussion
[12] Rule 21.01(1) (a) and (b) provide:
21.01 (1) A party may move before a judge,
(a) for the determination, before trial, of a question of law raised by a pleading in an action where the determination of the question may dispose of all or part of the action, substantially shorten the trial or result in a substantial saving of costs; or
(b) to strike out a pleading on the ground that it discloses no reasonable cause of action or defence, and the judge may make an order or grant judgment accordingly.
[13] Based on the acknowledgment of Burmet that the Construction Lien Act does not apply to the federal Crown and to lands reserved for the First Nation under the Indian Act, an order shall go striking those parts of the statement of claim that pertain only to the claim under the Construction Lien Act namely, paragraphs 1(b), 10, 11 and 12, the last sentence in paragraph 3 and the last clause of paragraph 13, namely, “…an owner within the meaning of the Construction Lien Act, R.S.O. 1990, c.C.30, and any amendments thereto.”
[14] The question then is whether the remainder of the statement of claim, after the impugned parts of the pleading are struck, provides a core cause of action against the Crown that does not rest on the Construction Lien Act or on privity of contract. In my view, the facts pleaded, albeit imperfectly, support a cause of action of unjust enrichment and quantum meruit as against the Crown. The essential facts pleaded are that there was work done by the plaintiff on lands reserved for the First Nation which remain vested with the Crown as the rightful owner, that the work resulted in improvements to the lands, that the plaintiff has not been paid for the work and that the Crown has directly benefited from the work.
[15] In Conway v. Law Society of Upper Canada, 2016 ONCA 72, at para. 7, the Court of Appeal held:
[7] Before a statement of claim is struck out under Rule 21.01(1)(b) of the Rules of Civil Procedure, it must be plain and obvious, on a generous reading of the pleading, and taking the factual allegations as true or capable of proof, that it discloses no reasonable cause of action. [Citations omitted]
[16] As observed by Quinlan J. in McGillvray v. Penman, 2016 ONSC 1271, at para. 9, after citing the above quote from Conway:
As a general principle, courts are hesitant to strike out a statement of claim as disclosing no reasonable cause of action. A claim should only be struck out where it is certain to fail because it contains a radical defect: Hunt v. Carey Canada Inc., 1990 CanLII 90 (S.C.C.), [1990] 2 S.C.R. 959, at p. 975.
[17] Rule 26.01 provides:
26.01 On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.
[18] Rule 26.01 does not permit amendments to add a statute – barred claim. The expiry of a limitation period is presumed to cause prejudice that cannot be compensated by an adjournment or costs. In this case, because the facts pleaded in the first instance support a cause of action for unjust enrichment or quantum meruit, the plaintiff is not asserting a new cause of action. The Limitations Act does not come into play. As observed in 110097 Ontario Limited v. North Elgin Centre Inc., 2016 ONCA 848, at para. 21, there is a distinction between pleading a new cause of action and pleading a new or alternative remedy based on the facts originally pleaded.
[19] In submissions on the motion, counsel for the First Nation supported the position of the Crown that relief under the Construction Lien Act was precluded as against the Crown and the First Nation. Counsel for the First Nation took no positions on the balance of the issues.
[20] In striking out those aspects of the statement of claim that refer to the Construction Lien Act, the facts alleged against the First Nation for breach of contract remains, as do facts supporting a claim of unjust enrichment and quantum meruit against both defendants.
[21] The case law indicates there is a distinction between contractual quantum meruit claims, where work is done under a contract that does not provide an express number for payment, and restitutionary quantum meruit claims, where some benefit is conferred in the absence of a contract. See Levine + Williams, “Restitutionary Quantum Meruit – The Crossroads” (1992) 8 Construction Law Journal 244.
[22] In Yorkwest Plumbing Supply Inc. v. Nortown Plumbing, 2014 ONSC 5655, at paras 49-50, the Divisional Court held that section 55(1) of the Construction Lien Act was a bar to a quantum meruit claims unrelated to a contract. Section 55(1) allows claims for breach of contract to be joined with claims for lien.
[23] Although there is no contract between Burmet and the Crown, this case is no longer a construction lien case because I have struck the plaintiff’s pleading as regards to the Construction Lien Act. Burmet is therefore not joining a non-contractual quantum meruit claim as against the Crown with a construction lien claim.
Conclusion
[24] For the reasons given, those aspects of the statement of claim which plead the Construction Lien Act, as particularized above, are struck as disclosing no reasonable cause of action.
[25] The plaintiff is granted leave to amend its statement of claim by filing and serving a fresh copy of the original statement of claim as amended, in accordance with Rule 26.03, within 30 days of this order. In the interests of efficiency and cost saving, I am not requiring the plaintiff to deliver a formal written motion to amend. The leave to amend is granted as a condition of striking out those parts of the statement of claim which plead the Construction Lien Act.
[26] The defendants shall deliver their respective statements of defence within 20 days of service upon them of the fresh statement of claim, as amended.
[27] The name of the defendant, “Her Majesty the Queen in Right of Canada,” shall be deleted and “the Attorney General of Canada” shall be substituted therefore.
Costs
[28] If the parties are unable to agree upon costs, they shall, within 20 days, contact the Trial Co-ordinator to arrange a date to speak to the issue, failing which, costs shall be deemed to be settled.
_____”original signed by”
Regional Senior Justice D. C. Shaw
Released: November 22, 2016
CITATION: Burmet Northern Ltd. v. Kashechewan First Nation et al, 2016 ONSC 7289
COURT FILE NO.: CV-14-0253
DATE: 2016-11-22
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
BURMET NORTHERN LTD.,
Plaintiff
- and -
KASHECHEWAN FIRST NATION (formerly Fort Albany Indian Reserve No. 67) and HER MAJESTY THE QUEEN IN RIGHT OF CANADA
DECISION ON MOTION
Shaw R.S.J.
Released: November 22, 2016
/sab