COURT FILE NO.: 3443/16
DATE: 2018 12 19
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
BAEUMLER QUALITY CONSTRUCTION INC.
Plaintiff
– and –
CHARLES ANTHONY PIRRAGLIA, DONNA-LYNN PIRRAGLIA and CANADIAN IMPERIAL BANK OF COMMERCE
Defendants
J. Goode, for the Plaintiff
Z. Pringle and Kaush Paramesuaran, for the Defendants, the Pirraglias
HEARD: December 17, 2018
REASONS FOR DECISION ON MOTION
I. Introduction
[1] In November 2016, the Plaintiff, Baeumler Quality Construction Inc. (“Baeumler”), commenced a Statement of Claim related to the Construction Lien Act, R.S.O. 1990, c. C.30, as amended (“CLA”).
[2] Note that the CLA has now been replaced by other legislation, however, that fact is not relevant to the within decision.
[3] Baeumler’s Claim for Lien was dated September 22, 2016 and was registered on September 23, 2016.
[4] There are three Defendants in the action commenced by Baeumler: Charles Anthony Pirraglia, Donna-Lynn Pirraglia (the “Pirraglias”), and Canadian Imperial Bank of Commerce (“CIBC”).
[5] The Pirraglias are spouses of one another and the owners of the premises in question, located at 251 Colchester Drive in Oakville (the “Property”). CIBC holds a mortgage against the Property.
[6] The principal amount of the Claim is $34,066.64, which Baeumler alleges is the sum owed to it by the Pirraglias for labour and materials supplied by Baeumler for a basement and main bathroom renovation project at the Property.
[7] There was a contract between the parties, as admitted by both sides, dated February 26, 2016 (“Contract”). Only Mr. Pirraglia, not his spouse, and Baeumler were parties to the Contract.
[8] The Pirraglias have defended the Claim and have issued a Counterclaim in an amount far in excess of the $34,066.64. The Counterclaim has been defended by Baeumler.
[9] By Order of Master Mills made on September 13, 2018, the action was set down for trial.
[10] The Pirraglias have brought a Motion which was heard at Court in Milton on December 17, 2018. They seek a declaration that the Plaintiff’s lien expired before it was registered and, thus, an Order for its discharge, among other relief.
[11] The Pirraglias allege the following timeline: the last provision of labour or materials by Baeumler was July 25, 2016; the contract was abandoned or terminated on July 27, 2016; and the deadline for Baeumler to have preserved the lien was September 10, 2016. Thus, it expired before it was registered on September 23rd.
[12] In the Claim for Lien, Baeumler had indicated that work had commenced in late February 2016 and was still ongoing as of the date of the Claim for Lien (September 22, 2016). Clearly, that was incorrect. The work had ceased long before September 22nd, although that is not determinative of how this Motion ought to be resolved.
II. Analysis
The Law on the Expiration of a Lien
[13] Section 31(2) of the CLA deals with the expiration of a lien. There are two scenarios: 31(2)(a) applies where, by certification or declaration, there has been substantial performance of the contract; while 31(2)(b) applies where there is no such certification or declaration.
[14] There is no such certification or declaration in our case, thus, 31(2)(b) governs. The lien expires at the conclusion of the 45-day period after the date that the contract was completed or the date that the contract was abandoned, whichever is earlier.
[15] This Contract was not completed, thus, the lien expired at the conclusion of the 45-day period after abandonment.
[16] “Abandonment” is not defined in the CLA, thus, we look to the jurisprudence for assistance. The Pirraglias rely heavily on the recent decision of Justice de Sa of the Ontario Superior Court of Justice in Scepter Industries Ltd. v. Georgian Custom Renovations Inc., 2018 ONSC 988.
[17] The Pirraglias argue that abandonment occurred on July 27, 2016, when Mrs. Pirraglia allegedly terminated the Contract. September 23, 2016 is obviously more than 45 days after July 27th.
[18] I pause here to note that the contracting party, Mr. Pirraglia, clearly did not do anything, in July or August, 2016, that could have amounted to a termination of the Contract, but it is assumed for the purpose of this decision that the actions of Mrs. Pirraglia were done on behalf of and intended to bind the position of her husband. That assumption is clearly to the benefit of the Pirraglias.
[19] The key question, therefore, is whether the Contract was indeed terminated (abandoned) on July 27th.
[20] I agree with counsel for the Pirraglias that the decision in Scepter, supra is instructive. I disagree, however, with any suggestion that it marks a significant change or shift in the law with regard to abandonment.
[21] The dispute in Scepter, supra was similar to that in our case – the moving party was arguing that the lien registered by Scepter had expired, and Scepter was arguing the opposite.
[22] The Court agreed with the moving party and held that the lien had expired because it was registered by Scepter more than 45 days following the date that the contract was abandoned.
[23] The Pirraglias focus on paragraph 34 of the decision in Scepter, supra, wherein the Court states that “[i]n my view, a payer terminating the contract constitutes ‘abandonment’ of the contract for the purposes of the Act”.
[24] With respect, that comment ought not to be read in isolation. And it ought not to be interpreted as being any marked departure from how the concept of abandonment has been traditionally viewed by the courts.
[25] Traditionally, cessation of work and abandonment have not been considered to be the same thing. Abandonment means cessation of work and a lack of intention to carry the project through to completion. Otherwise, any temporary stoppage of work could constitute abandonment, and that was likely not the intention of the legislators, nor is it good policy. To constitute abandonment, the cessation of work must be permanent. Dieleman Planer Co. v. Elizabeth Townhouses Ltd., 1974 CanLII 175 (SCC), [1975] 2 S.C.R. 449, at page 452.
[26] The Court in Scepter, supra, at paragraph 28, expressly refers, approvingly, to the decision (still binding, of course) of the Supreme Court of Canada in Dieleman, supra.
[27] In addition, the Court in Scepter, supra, at paragraph 31, refers explicitly and approvingly to the decision of Master Albert, a very experienced jurist in construction matters, in Homewood Development Inc. v. 2010999 Ontario Inc., [2013] O.J. No. 3018 (S.C.J.).
[28] Master Albert, in Homewood, supra, had applied that very same test for abandonment – “cessation of work coupled with an intention not to return” (paragraph 174).
[29] The only caveat offered by the Court in Scepter, supra is that the intention of the contractor is not determinative. Rather, there are circumstances where the contract may be objectively viewed as having come to an end despite the lien claimant’s assertion that it intended to carry on (paragraph 33).
[30] The facts in Scepter, supra offered one of those sets of circumstances. Crucial to the Court’s decision in that case, as evidenced by paragraph 33, was that the party resisting the lien had, through its solicitor, sent a letter of termination explicitly advising the lien claimant that the agreement was terminated and advising that it would correct the outstanding work itself or hire other professionals to do so (paragraph 15).
[31] In Scepter, supra, the Court held that the date of that unequivocal termination letter, April 18, 2016, was the date that the contract was abandoned. As the lien had been registered by Scepter more than 45 days after April 18th, infact well more than two months afterwards, it was determined to have expired (paragraphs 35 and 36).
[32] Interestingly, in Homewood, supra, the date of abandonment was also deemed to be the date of a written termination of contract letter from a lawyer acting on behalf of the party resisting the lien (paragraph 179).
The Law on the Nature of this Motion
[33] A declaration that Baeumler’s lien has expired and an Order for its discharge is akin to granting partial summary judgment in favour of the Pirraglias.
[34] Thus, this Court should have regard to both (i) Rule 20.04, clauses (2), (2.1) and (2.2), of Ontario’s Rules of Civil Procedure and (ii) the guidance of the Supreme Court of Canada in its decision in Hryniak v. Mauldin, 2014 SCC 7.
[35] In other words, to grant the Motion would mean that this Court is satisfied on balance that there is no genuine issue for trial as to whether this lien expired before it was registered.
The Law as Applied to our Case
[36] Unlike the facts in both Scepter, supra and Homewood, supra, the Pirraglias never hired a lawyer and never advised Baeumler expressly, through a lawyer or not, that the Contract was terminated.
[37] That is not necessarily fatal to their argument, but it is an important factual distinction between our case and the two cases focused on by both sides before this Court.
[38] In my view, the question of abandonment is one of fact. RSG Mechanical Inc. v. 1398796 Ontario Inc., [2013] O.J. No. 1222 (S.C.J., Master Polika), at paragraph 62; Gem in Niagara Homes Inc. v. Dewling et al, 2018 ONSC 3500, at paragraph 28.
[39] I have reviewed carefully all of the correspondence between the parties contained in the materials filed by both sides, including but not limited to that between Mrs. Pirraglia and Baeumler’s CEO on July 26 and 27, 2016, which counsel for the moving parties focusses on as that which effectively terminated the Contract.
[40] I am not persuaded that there is anything that pre-dates August 9, 2016 (45 days before the lien was registered on September 23rd) that amounts to a clear termination of the Contract.
[41] More specifically, although work had certainly ceased before August 9th, I see evidence in that correspondence that Baeumler intended to carry on with the project, and I see no clear evidence that the Pirraglias did not.
[42] At the very least, the intention on the part of the Pirraglias was, on the evidence filed, uncertain.
[43] For example, Mrs. Pirraglia’s email to Bryan Baeumler sent sometime between 3:14 and 5:00 p.m. on July 27, 2016, at pages 76-77 of the Pirraglia’s Motion Record, states that “I do not wish Baeumler Quality Construction to perform any more work in my home…”, and that certainly supports a finding that the Pirraglias did not, as of that date, intend for any further work to be done by Baeumler.
[44] On the other hand, weeks later, and well after the August 9th date, on September 9th at 1:03 p.m., Mrs. Pirraglia sent an email to Bryan Baeumler which stated that “[i]n order for me to go forward with you in good faith, I will first require acknowledgement from you that our project was delayed due to a combination of the following factors…” (pages 86-87 of the Pirraglia’s Motion Record).
[45] On my review of the complete evidentiary record, it is unclear whether that latter type of message from Mrs. Pirraglia was a reference solely to finding a solution to the impasse of who was owed what by whom, as suggested by counsel for the Pirraglias. Maybe. Or maybe it was also an invitation for Baeumler to complete the work in an orderly fashion.
[46] Keep in mind that the exchange of correspondence between Mrs. Pirraglia and Bryan Baeumler continued for weeks and weeks after July 27th, the date of the alleged termination (abandonment) of the Contract. Never once does Mrs. Pirraglia ask why she is still being contacted by anyone on behalf of Baeumler, concerning work-related items, given the prior termination of the Contract. Never once does she state that the Contract is done or at an end or words to that effect, quite apart from saying that it has been “terminated”.
[47] It seems to me that it is not good policy to encourage the frantic filings of liens by contractors at the first sign of any trouble with their customers. Where the triggering event for the 45-day window for preservation of a construction lien is argued to be abandonment on the basis of termination of the contract, it is not too much to insist upon some solid evidence of abandonment.
[48] The onus here is on the Pirraglias. They have not met that onus to prove that there is no genuine issue regarding whether the Contract was abandoned before August 9, 2016.
[49] Considering the totality of the evidence, and even with resort, by analogy, to the expanded powers available on summary judgment motions, I am unable to find as a fact that the Contract was terminated (abandoned) on July 27, 2016, as alleged by the Pirraglias.
[50] In actuality, I find that position difficult to comprehend. It is undisputed that the Pirraglias themselves insisted on the involvement of Bryan Baeumler personally, the CEO of the Plaintiff. It is also undisputed that he had no prior familiarity with the matter and was only asked to become acquainted with it by written request of the Pirraglias tendered on July 26, 2016 (see page 70 of the Pirraglia’s Motion Record).
[51] To suggest that the said request was granted by Baeumler and then the Contract terminated by the Pirraglias the very next day would mean either that the Pirraglias are about the most unreasonable customers on earth or they did not really intend to end the Contract so soon after their request was granted. Being charitable to the Pirraglias, I choose the latter interpretation.
III. Conclusion
[52] For these reasons, the Motion is dismissed.
[53] If counsel cannot resolve the issue of costs, they may file written submissions. Each submission shall be limited to three pages in length, excluding attachments. Baeumler shall file within 60 days of the date of these Reasons. The Pirraglias shall file within 30 days of receipt of Baeumler’s submissions. Without leave of the Court, no reply is permitted.
Conlan J.
Date: December 19, 2018
COURT FILE NO.: 3443/16
DATE: 2018 12 19
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
BAEUMLER QUALITY CONSTRUCTION INC.
Plaintiff
– and –
CHARLES ANTHONY PIRRAGLIA, DONNA-LYNN PIRRAGLIA and CANADIAN IMPERIAL BANK OF COMMERCE
Defendants
reasons for decision on motion
Conlan J.
Released: December 19, 2018