Court File and Parties
COURT FILE NO.: 15-66495 DATE: 20170419
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: G.M. French Construction Co., Plaintiff/Applicant -and- Michel Robert Lemay and Judy Ann Lemay, Defendants/Respondents
BEFORE: Mr. Justice Robert N. Beaudoin
COUNSEL: Christopher Spiteri, for the Plaintiff Stephane P. Bond, for the Defendants
HEARD: April 6, 2017
Endorsement
[1] This action arises out of a cost plus contract to build a new home in Ottawa Ontario with a guaranteed maximum price of $2,139,728. The parties agreed that an Architect, Linda Chapman, would be the consultant under the contract. The contract specifications required construction work to “exceed minimum standards” and called for “first class workmanship.” [1]
[2] The Plaintiff seeks leave to bring a summary judgment motion pursuant to s. 67 of the Construction Lien Act, R.S.O. 1990, c. C.30 (the “Act”) and for summary judgment for the payment of the sum of $74,454.79 less $4500 for accessing the amount set out by the Ontario New Home Warranty Program (“Tarion”) to resolve any defects in work and materials. The Plaintiff further seeks summary judgment dismissing or staying the counterclaim of the Defendants. In the alternative, the Plaintiff seeks an order for direction with respect to the outstanding payments certified by the payment certifier on July 20, 2015.
[3] Section 67 of the Act provides:
Summary procedure
- (1) The procedure in an action shall be as far as possible of a summary character, having regard to the amount and nature of the liens in question. R.S.O. 1990, c. C.30, s. 67 (1).
Interlocutory steps
(2) Interlocutory steps, other than those provided for in this Act, shall not be taken without the consent of the court obtained upon proof that the steps are necessary or would expedite the resolution of the issues in dispute. R.S.O. 1990, c. C.30, s. 67 (2).
[4] Leave requires evidence of necessity and that the summary judgment motion would expedite the resolution of the issues in dispute. In this case, there is little evidence of necessity beyond the non-payment of the final invoices. As to the requirement that the motion would expedite the resolution of the issues; this mirrors the test for summary judgment as set out by the Supreme Court of Canada in Hryniak v. Mauldin, [2014] 1 S.C.R. 87, 2014 SCC 7 at para 49:
- There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.
[5] There are three outstanding invoices that are the subject of this motion:
Invoice 13003 – 20 in the amount of $35,256.14 Invoice 13003 – 21 in the amount of $30,933.83 Invoice 13003 – 22 in the amount of $8,264.82
[6] The consultant certified the first invoice. She did not have an opportunity to certify the next two invoices since her employment was terminated before she could do so. The Plaintiff placed a lien on the property and then commenced this action. The lien has not been vacated. The parties did not seek recourse under the Dispute Resolution provisions of the contract.
[7] The Plaintiff relies on the fact that the first invoice was certified by the consultant and argues that the Defendants should not be able to rely on the consultant’s failure to certify the remaining invoices as they unilaterally terminated her contract despite its failure to plead that the Defendants have frustrated any term of the contract. The Defendants do not admit that they terminated Ms. Chapman’s services.
[8] I cannot conclude that the consultant’s certificate is as determinative as the Plaintiff alleges. In issuing the certificate for invoice No. 20 on July 20, 2015, Ms. Chapman advised: “that the accounting mistakes or disagreements be resolved before the next certificate issue… The outstanding amounts can be deducted off that total prior to payment.” What’s more, this e-mail is evidence of set-offs being claimed at that time.
[9] The Plaintiff also relies on the fact that the Tarion Warranty Program representative has inspected the property and has reported that the Plaintiff has rectified all but one of the deficiencies listed in the Plaintiff’s Tarion’s 30 day Warranty Form.
[10] The Plaintiff submits that the Defendants are now occupying the property and have been able to obtain a mortgage notwithstanding its lien; essentially arguing that it is somehow unfair that the Defendants have had the benefit of the contract while the Plaintiff remains unpaid. This argument ignores the fact that the Plaintiff has received payments in excess of the contract price as well as the outstanding holdback in the amount of $85,091.37.
[11] The Plaintiff places particular reliance on paragraph 2.2.4 of the contract that describes the role of the consultant and which provides:
Based on the Consultant’s review of the Contractor’s applications for payment, the Consultant will determine the amount owing to the Contractor under the Contract and will issue certificates for payment as provided in article A – 7 of the Agreement…
[12] Paragraph. 2.2.13 adds however:
All certificates issued by the Consultant shall be to the best of the Consultant’s knowledge, information and belief. By issuing any certificate, the Consultant does not guarantee the Work is correct or complete.
[13] The Ontario New Home Warranty Plan Legislation contains no express prohibition against a civil action and the Court of Appeal has found that Tarion’s decisions do not prevent a civil action for damages against a Tarion vendor. [2] The contract between the parties contained its own warranty provisions. [3]
[14] I am not satisfied that leave to bring the summary judgment motion should be granted for the same reason that I am not satisfied that summary judgment should be granted for any amount as claimed by the Plaintiff. I am satisfied on the record before me that there are issues requiring a trial;
- whether the Defendants agreed to all the changes in change orders as alleged by the Plaintiff;
- the value of any unapproved changes;
- whether all of the work contracted for was performed by the Plaintiff;
- whether the delays on the project were caused by the Plaintiff or by the changes requested by the Defendants;
- what are the damages to the Defendants caused by the Plaintiff’s delays, if any; and
- whether the consultant approved payment for work which was not contracted for or agreed to.
[15] While the Plaintiff refers to the requirement that the Defendants put “their best foot forward”, the primary onus is on the Plaintiff to establish that there is no genuine issue requiring a trial. [4] There is insufficient evidence before me at this time to make the necessary findings of fact to resolve these issues.
[16] This case can be distinguished from the decision relied upon by the Plaintiff in 4 Star Drywall (99) Ltd. v. Nank Homes Inc.. In this case, there was a clear date for the completion of the contract (September 30, 2014) and the evidence put forward by the Defendants raises triable issues of delay as well as other issues identified in the claim for set-off and counterclaim. In effect, Plaintiff’s counsel conceded that the supplementary motion materials filed by the Defendants provide a sufficient evidentiary basis to require a trial of those claims.
[17] If the parties are unable to agree otherwise, they are to provide me with their brief costs submissions (not exceeding 5 pages) within 20 days of the release of this endorsement.
Mr. Justice Robert N. Beaudoin Date: April 19, 2017
Footnotes
[1] New House Specifications; paras. 1.5.5 and 1.5.2
[3] At para. 12.3.2
[4] Hi-tech Group Inc. v. Sears Canada Inc. (2001), 52 O.R. (3d) 97 (C.A.)