CITATION: Direct Equipment Ltd. v. Sundial Homes (Sharon) Limited, 2017 ONSC 5133
COURT FILE NO.: CV-15-124526
DATE: 20170914
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Direct Equipment Ltd.
Plaintiff
– and –
Sundial Homes (Sharon) Limited, B. Gottardo Construction Ltd. and BDO Canada Limited in its Capacity as Court Appointed Receiver of B. Gottardo Construction Ltd.
Defendants
Derek A. Schmuck, for the Plaintiff
Karey A. Dhirani, for the Defendants
HEARD: June 9, 2017
REASONS FOR JUDGMENT
MULLINS J.:
[1] The plaintiff moves for summary judgment in the sum of $52,811.15. It brought a claim brought pursuant to the Construction Lien Act, R.S.O. 1990, c. C.30, alleging that the defendant owes this sum in rental charges for construction equipment. Though not pleaded in the Statement of Claim, in argument advanced at the hearing of the motion, the plaintiff also sought judgment on the basis of unjust enrichment, quantum meruit and conversion.
[2] Direct Equipment Ltd. (Direct Equipment) is in the business of renting construction equipment, including trench boxes, spreader pipe, hanger plates, panels with hanger sheeting and other related materials. It entered into a rental agreement with B. Gottardo Construction Ltd. (Gottardo) pursuant to which it provided such items to it. On the face of the contract, the equipment was to be used on a project for Tribute Homes in Nobelton at Highway 27, south of King Road.
[3] Gottardo was the general contractor engaged by Sundial Homes (Sharon) Limited in respect of a project called Creekside and located at Sharon Village in the Town of East Gwillimbury.
[4] Unbeknownst to Direct Equipment, the equipment it rented to Gottardo was delivered to and used by Gottardo at Sundial’s project in East Gwillimbury, not for Tribute in Nobleton.
[5] On July 29, 2015, B. Gottardo Construction Ltd. abandoned Sundial’s project.
[6] On August 4, 2015 the defendant Sundial’s consultant delivered a notice of default to Gottardo because of it having abandoned the worksite. There was no response. Sundial terminated its agreement with Gottardo and requested that Gottardo remove all of its machinery and equipment from the site.
[7] On August 14, 2015 Sundial was advised that a receiver for Gottardo had been appointed pursuant to the Order of the Honourable Justice Newbould.
[8] On August 28, 2015 Gottardo was adjudged a bankrupt. Meanwhile, construction liens were registered against the Sundial project by eight contractors, claiming a total sum of $2,864,263.28. (See admissions by the plaintiff in its reply and defence to counterclaim of the defendant).
[9] The sales manager of the plaintiff, Mr. Jeff Samek, deposed that the plaintiff is in the business of renting equipment and neither installs nor removes its equipment from job sites. Mr. Sanick complains that despite the clear markings of the company name on its equipment, Direct Equipment received no knowledge of termination of the agreement between B. Gottardo Construction Ltd. and Sundial Homes (Sharon) Limited. Direct Equipment had difficulty, as events unfolded, in retaining a company to remove its equipment.
[10] As a result of the circumstances of the plaintiff’s equipment remaining at the defendant’s construction site after Gottardo left, the plaintiff claims an entitlement to be paid rental fees from the defendant for which it has invoiced the sum of $47,950.65. The plaintiff claims too, that equipment was damaged. It seeks the cost for repair, estimated to be $4,860.50.
[11] The plaintiff asserts that its equipment was ‘used’ by the defendant in the interregnum between Gottardo’s departure and the eventual removal of the equipment from the worksite, on November 2, 2015. The defendant contends that though the equipment may have been in place on its worksite, no ‘use’ was made of it.
[12] Following the appointment of the receiver on August 31, 2015, swears the defendant’s representative, the defendant repeatedly and appropriately addressed itself to the receiver’s counsel. It demanded that immediate arrangements be made to have all of Gottardo’s equipment removed from the premises. Particulars of its requests are set out in letters of September 4, 28, and October 1, 2015.
[13] The plaintiff and the defendant disputed whether it was the plaintiff’s responsibility or that of Sundial to remove the plaintiff’s equipment, until October 23, 2015, when counsel for the plaintiff confirmed that the plaintiff would make arrangements to remove its equipment.
[14] Both parties submit that the issues on this motion may be decided under Rule 20, or at least, by analogy to that rule. To the extent this is the plaintiff’s motion for judgment and not a motion under section 47 of the CLA, there seems no harm in applying the higher test, as it were, under the rules of Civil Procedure, but even under the broader discretion under the Act, it is appropriate in my view to decide the issues. For a discussion of the differences see Allcon Concrete & Haulage Ltd., v. Klein Rose Homes Inc. 2016 ONSC 1325, a decision of Sutherland, J.
[15] If the Court is satisfied there is no genuine issue requiring a trial with respect to a claim or defence, summary judgment should be granted.
[16] The defendant contends that s. 55(1) of the Construction Lien Act limits the claims a plaintiff may join with a lien claim to breach of contract. The plaintiff’s (unpleaded) claims for unjust enrichment and quantum meruit cannot be joined with a lien claim due to the wording of s. 55(1) of the Construction Lien Act. In support of this submission, the defendant relies upon the decision given in Yorkwest Plumbing Supply Inc. v. Nortown Plumbing (1998) Ltd., 2016 ONCA 305, 131 O.R. (3d) 149.
[17] Were the plaintiff entitled to make a claim for unjust enrichment, submits the defendant, it would be required to establish that the defendant had been enriched, the plaintiff had been deprived and, the absence of a juridical reason for the enrichment.
[18] There is no evidence submits the defendant, that it used or in any way benefited from the presence of the plaintiff’s equipment after Gottardo left the worksite. The plaintiff had a remedy available under the Construction Lien Act of which it has availed itself.
[19] Justice Sutherland made an order on September 15, 2016, pursuant to which the claims and relief sought by Direct Equipment were dismissed without costs with the explicit exception of Direct Equipment’s claim for conversion or unjust enrichment in the amount of $75,000. Sundial ought to have raised any objection to these claims then, says the plaintiff.
[20] If the evidence of the plaintiff is examined closely, the allegation that the contract entered into between Direct Equipment and Gottardo was ‘on behalf of Sundial’ is, in my view, not supported, nor does it probably matter. Gottardo entered into a written agreement for the rental of equipment from the plaintiff, with reference to another project at different premises. Pursuant to its obligations, the defendant Sundial paid the sums as and when due, retained and has remitted the requisite hold back.
[21] There is no evidence in the affidavit of Jeff Samek that Sundial ‘used’ the plaintiff’s equipment after it was abandoned by Gottardo on Sundial’s site. Likewise, there is no evidence that the defendant is responsible for any damage alleged to have been caused to the equipment.
[22] Whether or not the plaintiff may join a claim for unjust enrichment to a lien claim or not, there is no evidence as to how this defendant can have been enriched merely by the presence of the plaintiff’s equipment, especially in circumstances where the plaintiff was but one of several sub-contractors whose equipment and materials were abandoned on the work site as a result of the bankruptcy of B. Gottardo Construction Ltd. In the absence of any evidence the defendant made active use of the plaintiff’s equipment, say by having another contractor take up the work and using the equipment abandoned by Gottardo, there is no substance to claims for unjust enrichment, quantum meruit, or conversion.
[23] The plaintiff’s motion for summary judgment is dismissed. Should they not be able to agree, the parties may make brief written submissions as to costs within 90 days.
Madam Justice A.M. Mullins
Released: September 14, 2017
CITATION: Direct Equipment Ltd. v. Sundial Homes (Sharon) Limited, 2017 ONSC 5133
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Direct Equipment Ltd.
Plaintiff
– and –
Sundial Homes (Sharon) Limited, B. Gottardo Construction Ltd. and BDO Canada Limited in its Capacity as Court Appointed Receiver of B. Gottardo Construction Ltd.
Defendants
REASONS FOR JUDGMENT
Madam Justice A.M. Mullins
Released: September 14, 2017