2287376 Ontario Inc. v. PCL Constructors Canada Inc., 2017 ONSC 7149

COURT FILE NO.: CV-12-0381-0000A1 (Napanee)

DATE: 2017-11-30

SUPERIOR COURT OF JUSTICE – ONTARIO

(in the matter of the Construction Lien Act, R.S.O. 1990, c. C.30, as amended)

RE: 2287376 ONTARIO INC., c.o.b. as ROYAL-THOM CONSTRUCTION, Plaintiff

AND:

PCL CONSTRUCTORS CANADA INC., STRATHCONA PAPER GP INC. and CANADIAN SOLAR SOLUTIONS INC., Defendants

AND:

HELICAL PIER SYSTEMS LTD., Third Party

BEFORE: Mr. Justice Graeme Mew

COUNSEL: Todd Robinson, for the Third Party/Moving Party Ronald W. Price, for the Defendant, PCL Constructors Canada Inc.

HEARD: in writing

MOTION ENDORSEMENT

[1] The third party, Helical Pier Systems Ltd. (“HPS”), moves for dismissal of the main action and the third party proceedings due to the failure of the plaintiff, 2287376 Ontario Inc., cob as Royal-Thom Construction (“RTC”) to comply with the order of Scott J. dated 21 March 2017 requiring RTC to pay into court the sum of $250,000.00 as security for costs of this proceeding and further ordered RTC to pay HPS’s costs fixed in the amount of $8,000.00.

[2] This action, together with five related construction lien actions, arises from the construction of a substantial solar farm project in Lennox and Addington County.

[3] Scott J. rejected RTC’s defence that it was impecunious and that it should be permitted to continue with the action. No appeal was taken from that decision.

[4] RTC has failed to pay into court the amount ordered by way of security for costs. It has also failed to pay the costs ordered by Scott J. HPS, supported by PCL Constructors Canada Inc. (“PCL”), now moves to for the action brought by RTC to be dismissed with costs.

[5] The record discloses not only that RTC has not complied with the order of Scott J. but also, that RTC is no longer carrying on any business, has no assets, has no premises and that its sole director has, since 2013, been reliant on social assistance benefits.

[6] During the course of a case conference in this matter on 27 September 2017, the possibility was raised that one or more of RTC’s creditors might consider it in their best interests to pay the security for costs, on the theory that RTC’s claim in this litigation represents the best hope of those creditors of realizing some or all of their claims against RTC.

[7] In fact, no one has stepped into the breach on behalf RTC. Having provided the parties with a timetable for the bringing of any motions arising from RTC’s non-compliance with the order of Scott J., and all of the deadlines established for that motion having now passed, the court is prepared to address the issues raised on the motion without the need for a hearing.

[8] Rule 56.06 of the Rules of Civil Procedure provides:

Where a plaintiff or applicant defaults in giving the security required by an order, the court on motion may dismiss the proceeding against the defendant or respondent who obtained the order…

[9] It is suggested in Todd Archibald, Gordon Killen & James C. Morton, Ontario Superior Court Practice, 2017 edition (Toronto: LexisNexis, 2016) at p.1651 that the court must analyse the efforts made by the plaintiff to comply with the order and should always proceed with caution when faced with a motion to dismiss an action without any disposition of its merits.

[10] In the present case, the only evidence adduced is that no efforts have been made by RTC. Indeed, every indication is that RTC lacks the financial wherewithal to post the security ordered by Scott J.

[11] Accordingly, there appears to be no reason, in fact or principle, not to accede to HPS’s motion.

[12] An order shall therefore go granting leave to HPS to bring this motion and granting the relief sought in paragraphs (c) and (d) of the notice of motion, the effect of which is as follows:

a. That RTC’s claim will be automatically dismissed 30 days from today’s date unless RTC complies with the order of Scott J. by posting security as ordered, making payment of the outstanding costs award in favour of HPS and delivering a notice of compliance in accordance with rule 56.08 in respect of both the ordered security and the costs award; and

b. That the third party claim of PCL against HPS shall be deemed to be dismissed at the conclusion of 30 days following the dismissal of the main action unless the court orders otherwise during the 30 day period.

[13] HPS requests that the costs of the proceeding in the motion should be determined by way of assessment. HPS does not indicate against which parties it seeks costs.

[14] PCL, while generally supportive of HPS’s motion, submits that any determination as to the issue of costs should be deferred to another date in the event that HPS is seeking costs against PCL in connection with any dismissal of the third party claim.

[15] No compelling reason is provided for referring the issue of costs for assessment. There is a presumption that costs will be fixed by the court unless the court is satisfied that it has before it an exceptional case: Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 CanLII 14579 (ON CA), 71 O.R. (3d) 291 (C.A.) at para. 15. Furthermore, a determination of by whom, to whom and on what scale costs would be assessed is something a judge and not an assessment officer would decide.

[16] PCL also submits that there should be an order pursuant to which the security previously posted by PCL to vacant the construction lien of RTC should be returned to PCL’s lawyers. This would seem to be a logical consequence of the dismissal of RTC’s action. Accordingly, unless within 30 days of these reasons, any party raises a valid objection to the release of the security posted by PCL being returned, I would accede to PCL’s request. Counsel for PCL should provide a draft order to that effect for my consideration.

[17] I will ask the trial coordinator to schedule a telephone case conference at which directions can be given with respect to costs submissions arising from this motion and the further conduct of this proceeding and the related construction lien proceedings.

Graeme Mew J.

Date: 30 November 2017

Corrected, 1 December 2017

Paragraph 15

First sentence amended by changing “claim” to “reason”.