COURT FILE NO.: 82/13
DATE: 2018 05 24
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: JASON EDGCUMBE carrying on business as EDGEWOOD CONSTRUCTION v. CHRISTOPHER ROBERT VICARY also known as CHRIS VICARY, ROYAL BANK OF CANADA
BEFORE: LEMAY J.
COUNSEL: J. Gilbert, counsel for the Plaintiff
J. Fischer, counsel for the Defendant
ENDORSEMENT
[1] This is a motion brought by the personal Defendant, Christopher Vickery, for an Order dismissing this action under the Construction Lien Act. The action was originally started in 2013, and the lien expired in 2015, and was removed from the property in 2018.
The Background Facts
a) The Contract
[2] The Plaintiff, Jason Edgcumbe, carries on business as Edgewood Construction. The Defendant, Christopher Vickery owns a property in Arran-Elderslie Township in Bruce County. In 2012, the parties entered into a contract to construct a house on the property.
[3] There is also a claim by the Plaintiff that extras were ordered by the Defendant throughout the course of the contract.
[4] The total value of the contract, plus the extras, was well over $200,000.00. According to the Plaintiff’s claim, approximately $35,000.00 remains unpaid from the original claim. In addition, the Plaintiff’s claim for the extras that were allegedly not paid for is $25,000.00
[5] The Royal Bank was also added as a party to this action, solely because they hold a mortgage on the property. The Royal Bank has taken no part in the proceedings or in this motion.
b) The Litigation
[6] The Plaintiff registered a lien against title on September 12^th^, 2013, and a certificate of action was registered against title on October 29^th^, 2013, the same day that third action was commenced in Superior Court.
[7] The Plaintiff also started a Small Claims Court action on August 22^nd^, 2014. That Small Claims Court action seeks for the cost of the extras that were allegedly ordered throughout the course of the contract. This claim was not made part of the Superior Court action.
[8] The Small Claims Court action was stayed on February 12^th^, 2015. In staying that action, Deputy Judge Drury stated:
It is my belief that the parties in the Superior Court action bring [sic] this issue of the two actions before a Justice of the Superior Court, to review the matter and determine if they should be joined in some manner or if the Small Claims Court action should continue.
I would ask the parties to bring this by motion in Superior Court as soon as possible for a determination. Pending this, I would stay this action in Small Claims Court.
[9] Nothing further was done in this matter by either party until a trial record was served in November of 2017. Shortly after the trial record was served, the Defendant retained new counsel.
c) The Proceedings Leading to This Motion
[10] In March of 2018, the Defendant brought a motion, without notice, to set aside the Certificate of Action, and dismiss the Superior Court proceeding. The motion was returnable on March 21^st^, 2018. Counsel for the Plaintiff appeared, but had not filed responding motion materials. The motion proceeded before Petersen J. on Mach 21^st^, 2018.
[11] Petersen J. decided that the lien had expired pursuant to section 37(1) of the Construction Lien Act (“the CLA”). There was, and could be, no dispute on this point because the action had been set down more than two years after it was commenced. However, on the record before Petersen J., she could not determine whether the lien action should be permitted to continue as an ordinary action. The Plaintiff was given the opportunity to provide responding materials on this point.
[12] These responding materials were filed in accordance with a timetable set by Petersen J. Much of the material before me dealt with whether the March 21^st^, 2018 motion was properly brought without notice in light of communications that allegedly took place between counsel. Since there is no motion to set aside the March 21^st^, 2018 Order, I will proceed to address the remaining issues, which revolve around whether the action should be allowed to continue as a regular action.
[13] There was also a dispute between the parties about whether the matter was set down for trial. It is clear on the record that the Plaintiff served a trial record on December 8^th^, 2017, and that the matter was added to the running list for the Walkerton/Owen Sound joint civil and family sittings.
[14] Time was spent in argument over the issue of whether this matter was properly on the trial list prior to March 21^st^, 2018. In my view, it is not necessary to decide this issue in order for me to determine whether this court has discretion to permit this action to continue, or whether I should exercise this discretion.
Issues
[15] In reviewing the foregoing facts, the following issues present themselves:
a) Does the Court have discretion to allow the case to continue to trial? If so, should the Court exercise that discretion in this case?
b) If the case is allowed to continue, under what terms should it be allowed to continue?
[16] I will deal with each issue in turn.
Issue #1- Discretion. Does it Exist? If So, Should it be Exercised?
a) Does Discretion Exist
[17] Counsel for the Defendant argues that I am required to dismiss the action on the basis of the mandatory language in the CLA. In the alternative, she argues that I should exercise my discretion and dismiss the action in any event.
[18] The question of whether discretion exists arises from section 46 and 47 of the CLA. Those sections state:
46(1) Where a perfected lien that attaches to the premises has expired under section 37, the court, upon the motion of any person, shall declare that the lien has expired and shall make an order dismissing the action to enforce that lien and vacating the registration of a claim for lien and the certificate of action in respect of that action. R.S.O. 1990, c. C.30, s. 46 (1); 2017, c. 24, s. 63, 70.
Idem
(2) Where a perfected lien that does not attach to the premises has expired under section 37, the court, upon the motion of any person, shall declare that the lien has expired and shall make an order dismissing the action to realize upon that lien. R.S.O. 1990, c. C.30, s. 46 (2); 2017, c. 24, s. 70.
Costs
(3) A motion under subsection (1) or (2) may be brought without notice, but no order as to costs in the action may be made upon the motion unless notice of that motion was given to the person against whom the order for costs is sought. R.S.O. 1990, c. C.30, s. 46 (3).
Order returning money paid into court or cancelling security
(4) Where an action is dismissed under subsection (1) or (2), the court shall order that,
(a) any amount that has been paid into court under section 44 in respect of that action be returned to the person who paid the amount into court; and
(b) any security that has been posted under section 44 in respect of that action be cancelled. R.S.O. 1990, c. C.30, s. 46 (4).
General power to discharge lien
47 (1) Upon motion, the court may,
(a) order the discharge of a lien;
(b) order that the registration of,
(i) a claim for lien, or
(ii) a certificate of action,
or both, be vacated;
(c) declare, where written notice of a lien has been given, that the lien has expired, or that the written notice of the lien shall no longer bind the person to whom it was given; or
(d) dismiss an action,
upon any proper ground and subject to any terms and conditions
(2) Where a certificate of action is vacated under subsection (1), and there remain liens which may be enforced in the action to which that certificate relates, the court shall give any directions that are necessary in the circumstances in respect of the continuation of that action subject to paragraph 4 of subsection 44 (9).
[19] Counsel for the Defendant argues that there is a debate in the case law about whether a Court has discretion not to dismiss the whole action under s.46. of the CJA. For the reasons that follow, I reject this assertion. The existence of discretion is clear from the case law.
[20] Counsel argued that there were two conflicting Court of Appeal decisions interpreting these sections. In Teepee Excavating and Grading Ltd. V. Niran Construction Ltd. (2000 CanLII 3447 (ON CA), [2000] O.J. No. 2554), the Court of Appeal analyzed sections 46 and 47, addressed conflicting Divisional Court decisions, and stated (at paragraph 24):
The broad purpose of the legislation is to provide an efficient means of dealing with trade claimants that would otherwise be left behind without security if unpaid on a building project where payments typically flow from above and follow performance. On a failing or failed project, there may be many such claimants. In setting down the rules, the Act does not go so far as to restrict claims thereunder to lien claims. Contract claims by the plaintiff and counterclaims of any kind are permitted, presumably to avoid duplication of proceedings. In my view, avoidance of multiplicity of proceedings is the element of the Act that provides the direction for the interpretation of s.46(1) and s. 47(1)(d). Howland J.A., in A.J. (Archie) Goodale Ltd., set the tone for interpretation by observing that the Act should not be available as a subterfuge for pursuing an ordinary action by summary procedure; but where all of the steps have been taken and a conclusion reached at a hearing, the court should not dismiss the action for lack of a lien claim and thus compel a further proceeding concerning the same issue. The same reasoning suggests that the court has available the discretion to dismiss or permit the action to proceed without the lien claim, as the circumstances dictate.
[21] An allegedly contrary approach was adopted by the Court of Appeal in 310 Waste Ltd. v. Casboro Industries Ltd. (2006 CanLII 32747 (ON CA), [2006] O.J. No. 3817). In that case, the Court of Appeal simply stated that the provisions of section 46 of the CLA were mandatory. In 310 Waste Ltd., the Court of Appeal does not consider the reasoning in Teepee, supra, although Teepee was decided before 310 Waste.
[22] In K.H. Custom Homes Ltd. v. Smiley (2015 ONSC 6037), Corbett J., sitting as a single judge of the Divisional Court, found that the Teepee, supra line of reasoning was the law. While Corbett J. did not specifically address the 310 Waste decision, he sets out the reasons for adopting the approach in Teepee, supra. at paragraph 21 of his reasons as follows:
I conclude from these indications, and the language of the provision itself, that the legislature never intended that s. 46(1) be used for mandatory summary dismissal of contract claims without notice. We also note that the purpose of the CLA is to provide a balanced yet enhanced set of remedies and a special procedure for construction claims. There is no reasons to read into the CLA an intention to derogate from contract claims, and the clear language of s. 38 stipulates otherwise.
[23] I adopt the reasoning of Corbett J. I would add that, in my view, the 310 Waste decision did not intend to preclude the exercise of judicial discretion in all cases. Instead, the mandatory dismissal determined by the Court in 310 Waste was limited to the “lien action”, and did not purport to overturn the Teepee decision, which recognized a general judicial discretion to allow the contractual claim to continue regardless of what happened to the lien claim.
[24] In addition, the findings in 310 Waste have been explained by the Court of Appeal. As noted by MacFarlane J.A. in 1475707 Ontario Inc. O/A Action Electric Construction and Maintenance v. Foran (2014 ONCA 830) (at paragraph 40):
310 Waste did not in any way concern the Rules or procedural irregularities. Unlike the present case, the plaintiff had made no attempt to set the action down for trial. The issue before the court was whether or not there might be judicial authority to extend the mandatory time requirements of ss. 37 and 46 of the CLA. The court found it unnecessary to decide that issue, saying instead that even if such a discretion existed, the circumstances of that case would not warrant the exercise of it. 310 Waste was not concerned with “imperfect” compliance with the Rules – it was simply a case where the lien claimant failed to make any effort to set the action down for trial within the two-year period prescribed by s. 37(1) of the CLA.
[25] In the result, there is no conflict in the case-law over whether the Court has discretion to allow an action to continue as a regular action. The Court has discretion to allow the contractual actions to continue, and in 310 Waste, the Court merely decided to exercise that discretion in a particular manner. I therefore decline to read the 310 Waste decision as finding that s.46 of the CLA is mandatory.
b) Should Discretion be exercised?
[26] In exercising my discretion under these provisions, the most important factors are the prejudice that would be suffered by each party, and the Court’s preference to have disputes resolved on their merits. Both factors strongly favour allowing the contractual claim to proceed as a normal action.
[27] I note that the Plaintiff alleged prejudice as a result of the alleged communications between counsel. I do not need to consider that issue, as my consideration of prejudice must focus on the prejudice in advancing or defending the claim. There is no motion to reconsider the March 21^st^, 2018 decision of Petersen J. before me, and the Plaintiff was able to provide materials on this motion. As a result, there is no prejudice that flows from any of these alleged conversations.
[28] This brings me to the consideration of prejudice. Mr. Gilbert argues that his client would suffer prejudice if this matter was not dealt with because of the inadvertence of counsel. The problem with this argument is that there is no evidence before the Court of that prejudice, in spite of the fact that Mr. Gilbert’s client was given an adjournment of the motion to prepare materials to address these types of questions.
[29] The Defendant argues that he would be prejudiced if the action is not terminated because there is still a certificate of action registered against his property. While I agree that the continued existence of the Certificate of Action is prejudicial to the Defendant, it is also prejudice that can easily be remedied, and should have been dealt with when the lien was vacated.
[30] The Defendant also argues that he is prejudiced because he has to defend himself twice over the same facts. I also reject this argument. This prejudice, which would be of concern, has been managed by the Deputy Judge. The small claims court action is stayed, pending either a consolidation motion or a motion to have the two actions heard together. As a result, there is no prejudice that cannot be addressed by the Defendant seeking a consolidation Order, or an order to have the two actions heard together. This is something that is not before me, but that the parties will address as a requirement for continuing this action.
[31] I exercise my discretion to permit the Plaintiff’s action in contract to continue on terms. In my view, there is no prejudice to the Defendant that cannot be easily remedied, and there is a strong preference to have the dispute resolved on the merits at a trial.
[32] I also note that exercising my discretion in favour of the Defendant with respect to this claim would not dispose of the Small Claims Court matter. Although they are two separate actions, some of the underlying facts will be the same. As a result, the prejudice to the Defendant in having to proceed to a trial is lessened.
Issue #3- What Terms Should be Applied?
[33] The terms under which this action is permitted to continue are as follows:
a) The parties will forthwith either agree to an order to have the small claims court matter and the Superior Court of Justice matter heard together, or one after the other, as the trial judge may direct, or a motion to that effect will be brought returnable before me.
b) This action shall proceed as an ordinary action in accordance with the Rules of Civil Procedure.
c) The Certificate of Action that the Plaintiff has registered against the Defendant’s property is to be removed forthwith upon release of these reasons. This was before Petersen J. and appears to have been dealt with as a consequence of her dismissal of the lien action. The removal is to be effected by the Plaintiff, at the Plaintiff’s expense.
d) The parties are to file, within seven (7) calendar days of the release of these reasons, an agreed-upon timetable of the steps that are to be completed in this matter. The timetable must be designed to ensure that the matter can be placed on the trial list for the March 2019 Joint Civil and Family sittings. A copy is to be filed with my judicial assistant for my approval.
[34] If there are any disagreements about what should be in the timetable, my judicial assistant may be contacted to arrange a time for an in-court conference call.
Conclusion
[35] For the foregoing reasons, the Defendant’s motion to dismiss the action in its entirety is dismissed. However, the action will only continue on the terms set out in the previous section.
[36] Costs submissions are due from each party fourteen (14) days after the release of these reasons. They are not to exceed two (2) single-spaced pages, exclusive of offers to settle, case-law and bills of costs.
[37] Reply costs submissions are due seven (7) days thereafter, and are not to exceed one (1) single-spaced page.
[38] All costs submissions are to be filed both with the Walkerton Court Office and electronically with my judicial assistant in Brampton.
LeMay J.
DATE: May 24, 2018
COURT FILE NO.: 82/13
DATE: 2018 05 24
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: JASON EDGCUMBE carrying on business as EDGEWOOD CONSTRUCTION v. CHRISTOPHER ROBERT VICARY also known as CHRIS VICARY, ROYAL BANK OF CANADA
BEFORE: LEMAY J.
COUNSEL: R. McClean, counsel for the Plaintiff
J. Fischer, counsel for the Defendant
ENDORSEMENT
LeMay J.
DATE: May 24, 2018