COURT FILE NO.: 164/16
DATE: 2019 01 25
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SCO-TERRA CONSULTINIG GROUPS LIMITED
Plaintiff
R. Haas, Counsel for the Plaintiff
- and -
THE CORPORATION OF THE TOWN OF MONO
Defendant
C. Raphael, Counsel for the Defendants
-and between-
SCO-TERRA CONSULTING GROUP LIMITED
Plaintiff
R. Hass, Counsel for the Plaintiff
-and-
ARAGON (HOCKLEY) DEVELOPMENT (ONTARIO) CORPORATION cob as THE ARAGON GROUP
Defendant
C. Raphael, Counsel for the Defendants
HEARD: June 4th, 2018
REASONS FOR DECISION
LEMAY J.
[1] These actions flow from a development in the Town of Mono in the County of Dufferin where construction began in the early 2000’s. The Plaintiff, Sco-Terra Consulting Group Limited (“Sco-Terra”) provided engineering consulting services to the Defendant, Aragon (Hockley) Development (Ontario) Corporation (“Aragon”) for portions of a subdivision. The Defendant, the Town of Mono (“Mono”), approved the development.
[2] On October 25th, 2016, Sco-Terra registered two liens against portions of the subdivision. One lien was registered against the commercial lands that Aragon owns in the subdivision, and the second one was registered against Kingfisher Drive, a street in the subdivision that is owned by Mono, but was not assumed at the time this motion was heard.
[3] The Plaintiff, Sco-Terra subsequently brought separate claims against each of the Defendants. The action in Court File No. 168/16 was brought against Aragon, and the action in Court File No 167/16 was brought against Mono. Each action seeks lien rights under the Construction Lien Act (“CLA”) R.S.O. 1990 c. C 30, as well as the payment of unpaid invoices for engineering consulting services. It is common ground between the parties that the two claims involve the same work.
[4] The parties had resolved the issues relating to the lien against Kingfisher Drive, but have been unable to resolve the form of the Order. In addition, the Defendants move for summary judgment under sections 45 and 47 of the Construction Lien Act, arguing that the claims made by Sco-Terra are beyond the Limitations Act, 2002 and, in the alternative, that the liens should be removed from the property as they were not properly asserted.
[5] For the reasons that follow, I have determined that the issues relating to the Limitations Act, 2002, S.O. 2002 c. 24, Sched B. require a trial. In other words, the questions about whether Sco-Terra’s invoices should be paid will require a trial.
[6] However, I accept the Defendants’ position that the liens claimed by Sco-Terra were improperly placed on the lands. An Order discharging those liens and the certificates of action on the properties will issue.
[7] I note that, although this motion was brought on behalf of both Mono and Aragon, most of the materials from both parties reference Aragon as the moving party.
Background Facts
a) The Parties and the Properties
[8] Sco-Terra is an engineering consulting company. Its principal is Mr. Richard Pellerin. Sco-Terra holds a certificate of authorization under the Professional Engineers Act, and can offer professional engineering services to the public. Based on the record before me, Sco-Terra provided civil engineering services to Aragon.
[9] Aragon is a development company that, among other projects, developed the property that is the subject of this litigation.
[10] The property in question is located in Mono, to the west of Highway 10 and to the South of County Road 16. The land has been partially developed, and it includes the Watermark adult lifestyle community (“Watermark”), as well as some vacant commercial lands, some other roadways and improvements and other features.
[11] There is a dispute between the parties about the scope of the project. Sco-Terra argues that the work it performed was for the benefit of the entire parcel of land. Aragon argues that the work performed by Sco-Terra focused on three specific areas of the lands, as follows:
a) A project related to a roadway municipally known as Kingfisher Drive.
b) A project related to the Watermark Development, which is a residential development.
c) A project related to the waste water treatment plant and the residential lands. The waste water treatment plant is located on the residential lands.
[12] Ownership of the Watermark development was transferred from Aragon to the Dufferin Vacant Land Condominium Corporation #22 (the Condominium Corporation”) starting in May of 2009. Aragon no longer owns any of this portion of the lands.
[13] Kingfisher Drive is owned by the Town of Mono, and Aragon transferred this portion of the lands to the Town in 2008. This roadway is to the east of the Watermark development. The Roadway and the Watermark development (generally known as the residential lands) have separate Property Identification Numbers (“PINs”).
[14] There is also an area of land, with a separate PIN number that is zoned as commercial land. It is owned by Aaragon, and located immediately east of Kingfisher Drive. This portion of the lands is currently vacant. I will refer to this property as the Commercial Lands in these reasons.
b) The Contracts
[15] I was referenced to two different agreements that are relevant to this case. First, Mono and Aragon have entered into a detailed subdivision agreement on this property. Second, there is a contract between Sco-Terra and Aragon.
[16] The subdivision agreement is lengthy, and covers a significant number of topics. One of those topics is the hiring of a Consulting Engineer, whose responsibilities are to perform all of the engineering services related to the development of the “subject lands”. The “subject lands” include the Commercial Lands.
[17] The contract between Sco-Terra and Aragon is identified in Mr. Pellerin’s Affidavit of November 3rd, 2017. In his Affidavit, Mr. Pellerin asserts that the contract between Sco-Terra and Aragon derives primarily from the obligations that Aragon has in its subdivision agreement with Mono. Mr. Pellerin also asserts that much of the work that was done in this case was performed in relation to all of the subject lands, including the Commercial Lands. I will return to this issue in more detail in my discussion of the propriety of the liens.
[18] The contract between Sco-Terra and Aragon, however, is not encapsulated in one signed agreement. It is set out in a series of letters from Sco-Terra to Aragon. However, those letters seem to focus on the Watermark development. Indeed, in the first letter that was sent on March 13th, 2014, Mr. Pellerin wrote:
As requested during our telephone communication of Wednesday- March 10/2004, this serves to provide our proposal for design of internal site services including detailed site grading and preparation of a design level stormwater management plan in connection with development of the Monora Adult Lifestyle Community proposed on the Brett Farm lands in the Town of Mono. Our proposal for services and associated fee budget excludes the proposed Commercial Block located east of the Adult Lifestyle Community and the proposed Cedar Grove extension from Highway No. 10/24. Additionally, in accordance with your instruction, we are providing a secondary component to our proposal involving review of servicing feasibility for a modified Development Concept currently under consideration by the Aragon Group.
[19] This passage, and the correspondence when read as a whole, suggests that Sco-Terra was not providing services with respect to the Commercial Lands and that there were specific projects that were being completed by Sco-Terra.
[20] As I have noted above, there were three projects that Sco-Terra was involved in. Given my conclusion that the Limitations Act issues must proceed to trial, I am not going to review those projects in detail, except to the extent necessary to resolve the lien issues.
[21] The first project was for infrastructure on the roadway, now owned by Mono. A certificate of substantial completion for that project was signed by a representative of Sco-Terra back in 2008, and the deficiencies were addressed at that time.
[22] The second project was for lot grading, and the issuance of lot grading certificates for the residential units. The last grading certificate was issued in early 2014. The parties agree that a deduction of $11,343.94 from the amounts that were claimed in Sco-Terra’s Statement of Claim is appropriate, and I have noted that deduction.
[23] The third project related to work done on the Wastewater Treatment Plant. It is located on the residential lands, and services the condominium units. The Wastewater Treatment Plant went into operation sometime in June of 2009, and the certificate of substantial performance is dated July of 2009.
[24] The ownership of the Wastewater Treatment Plant was transferred to the Condominium Corporation, and this corporation entered into an agreement with a third party (ASI Group) for the management and operation of the Wastewater Treatment Plant. The Wastewater Treatment Plant does not service either Kingfisher Drive or the Commercial Lands.
c) The Events between 2012 and 2016
[25] Sco-Terra continued to have some involvement with the property during this time period. In order to address the arguments relating to the lien claims, it is necessary to generally review the work that was performed by Sco-Terra.
[26] The invoices that were filed in the materials before me indicate that part of the work that Sco-Terra invoiced for between 2012 and 2016 was related to the status of Sco-Terra’s accounts. Other portions of the work included following up on drawings, certificates and site inspections and discussion with the Town’s engineers. Finally, in November of 2015, there was some discussion between Mr. Page and Mr. Pellerin about whether the commercial lands could use the Wastewater Treatment Plant that the residential lands used. This issue was not pursued by Aragon.
[27] In all, between January 1, 2013 and December 31, 2015, Sco-Terra invoiced Aragon for approximately $15,000.00 in fees, disbursements and HST. All of the invoices I was provided with in this regard were dated at the end of August 2016.
[28] On June 1st, 2016, Mono commenced a claim against Aragon, Sco-Terra, the Condominium Corporation and other parties. That claim alleges that the Wastewater Treatment Plant had failed, and that the Defendants (including Sco-Terra and Aragon) should be liable for damages related to the failure of the Wastewater Treatment Plant, which had been operating for a number of years when this claim was brought.
[29] After June 1st, 2016, the materials that were filed indicate that there were exchanges of e-mails between Mr. Pellerin, the principal of Aragon, Mr. David Page, and a Mr. Gord Feniak, who is also a Professional Engineer. Mr. Feniak was responsible for reviewing the work that had been performed in the subdivision on behalf of Mono. I understood that he was the Town’s Engineer, at least for this project.
[30] In 2016, Sco-Terra provided four separate invoices. The first ran from January 1st to July 31st, 2016. The second ran from August 1st to September 3rd, 2016, the third one ran from September 4th to 30th 2016, and the final one ran from October 1st to November 7th, 2016.
[31] I have reviewed these invoices in detail. Most of the work recorded in these invoices involved efforts to collect on outstanding accounts, and general administrative work associated with completing the contracts. There were a few site inspection visits that also took place during this time period.
[32] There is some considerable dispute between the parties about what amounts, if any, remain owing to Sco-Terra and whether the lien should have been placed on the properties in the first place.
d) The Procedural History of These Cases
[33] On October 25th, 2016, Sco-Terra registered a lien against the Commercial Lands. The claim for lien that was registered against title reads as follows:
Name and address of Owner Aragon (Hockley) Development (Ontario) Corporation 101-262 Carlaw Avenue, Toronto, ON M4M 3L1 Name and address of person to whom lien claimant supplied services or materials Aragon (Hockley) Development (Ontario) Corporation & The Aragon Group as described in PIN 34033-0282. Time within which services or materials were supplied from 2004/04/01 to 2016/09/12 Short description of services or materials that have been supplied Civil Engineering Services including servicing lot grading and wastewater servicing. Contract price or subcontract price $63,193.08. Amount claimed as owing in respect of services or materials that have been supplied $63, 193.08.
The claimant claims a lien against the interest of every person identified as an owner of the premises described in said PIN to this lien.
[34] On the same day, a second lien was registered against Kingfisher Road, which is owned by Mono. The Mono lien claim is almost precisely the same as the lien claim made against Aragon, and as I have noted above Mr. Pellerin acknowledged on cross-examination that these two liens were for the same work.
[35] The amount of money claimed in both liens is $63,193.08. In the materials that have been filed by the parties, it is now clear that the total claim being advanced by Sco-Terra is lower. As I have noted above, the parties appear to have agreed that $11,343.94 is properly deducted from the claim. However, there were some discrepancies in the materials as to what amount Sco-Terra was continuing to claim, and I am not resolving that issue.
[36] On December 9th, 2016, Sco-Terra commenced the claims that I have described above. Statements of Defence were provided in both cases, and then Aragon and Mono moved to have the liens removed from their respective properties. Sco-Terra sought to bring a cross-motion seeking to have the two actions consolidated. There have been cross-examinations of the main Affiants from each side.
[37] The parties appeared before Petersen J. on September 14th, 2017, and a timetable was established. The issues of whether the lien was properly registered against Kingfisher Road, and whether the actions could be consolidated were to be addressed on March 5th, 2018. The remaining issues were adjourned to June 4th, 2018.
[38] The parties resolved the issues relating to the March 5th, 2018 appearance, with the exception of the form of the Order that was to be taken out. The remaining issues were argued before me on June 4th, 2018.
Issues
[39] Based on the foregoing summary, there are three issues to be determined in this case:
a) Should Aragon be entitled to summary judgment dismissing all of Sco-Terra’s claim?
b) If Aragon is not entitled to summary judgment, should the liens nonetheless be removed from the property?
c) What form should the Order relating to the settlement of the Mono lien take?
[40] I will address each issue in turn.
Issue #1- Should Summary Judgment Be Granted on the Entire Claim?
[41] The question of whether this entire action should be dismissed requires an application of the principles in Hryniak v. Mauldin ([2014] 1 S.C.R. 87, 2014 SCC 7). In that decision, the Supreme Court instructed trial judges that were considering summary judgment motions to determine whether there was a genuine issue requiring a trial. If there was no genuine issue requiring a trial, then summary judgment could be granted.
[42] If there was a genuine issue requiring a trial, then the judge hearing the summary judgment motion should determine whether the powers under Rule 20.04 can be used in order to provide a fair, just and proportionate resolution to the case.
[43] In this case, Aragon argues that the work relating to these projects was performed prior to 2014, and that as a result section 4 of the Limitations Act, 2002 precludes any recovery. Counsel’s argument is, in essence, that the work that was done in relation to these projects was primarily completed prior to 2014.
[44] I reject this argument. The key problem with the argument can be summed up in the word “primarily” that counsel used in her factum. The fact that the work was “primarily” done before 2014, does not mean that it was all done before 2014.
[45] There are a number of other reasons why summary judgment cannot be granted on the entire claim at this point, as follows:
a) While most of the work was done prior to 2014, there was some work that was performed after 2014. Indeed, as noted above, it is clear that there was even some work done in late 2016, shortly before the claims were brought.
b) The record before me discloses that there were negotiations between the parties over what payments would be made for the work performed by Sco-Terra.
c) The record before me discloses that Sco-Terra made some payments in the fall of 2016. The reasons for those payments are not clear on the record before me.
[46] Counsel for the Defendants argued that the Statements of Claim are lien claims, and that there is no mention of a contractual dispute. Having reviewed the Statements of Claim, I do not agree. Sco-Terra asserts the existence of invoices with amounts that are owing and have not been paid. Although the pleading is not crystal clear, it appears to allege both contractual and lien claims, and I am not prepared to dismiss the entirety of the claim on the basis that it is only a lien claim.
[47] As a result, I am of the view that the issue of whether the claim is statute barred under the Limitations Act cannot be determined on a motion for summary judgment. Instead, a trial will be required in order to determine whether this claim is statute barred.
[48] I considered whether it would be appropriate for that trial to proceed in front of me under the directives provided by the Supreme Court in Hryniak, supra. In light of the fact that this is an Orangeville action, and in light of the fact that the scheduling and resource difficulties in the Central-West Region are well known, I conclude that the interests of the parties would not be served by having me retain jurisdiction over this matter. Dates for a trial will be easier to find if the matter can be assigned to any judge in the Region. In addition, it is not clear to me what additional evidence will be required to adjudicate Sco-Terra’s claim.
[49] However, some further direction in terms of preparing this matter for trial is essential, and I will provide those directions at the end of my reasons.
Issue #2- The Lien Claim
a) The Arguments of the Parties
[50] Aragon advances a series of arguments as to why the lien claim cannot succeed, and should be vacated even if I do not grant summary judgment. Those arguments are:
a) The lien expired prior to registration.
b) Repair work deficiency work and trivial work does not extend the time for a lien claim.
c) The claim is not for lienable services.
d) The lien is on the wrong property.
[51] Sco-Terra argues that the work that was performed even up to 2016 was work that improved the entire property. Sco-Terra further argues that its work was as a consulting engineer and, under the terms of the subdivision agreement between Aragon and Mono, the work that Sco-Terra performed was to the benefit of the entire subdivision. Finally, Sco-Terra disputes the submissions made by Aragon.
b) Legal Analysis and Conclusions
[52] The legal analysis in this case starts with sections 45 and 47 of the Construction Lien Act. Those provisions state:
Declaration by court that preserved lien has expired
- (1) Where a lien that attaches to the premises is not preserved or is not perfected within the time allowed for doing so under section 31 or 36, the court upon,
(a) the motion of any person without notice to any other person;
(b) proof that the lien has not been preserved or perfected within the time allowed; and
(c) production of,
(i) a certificate of search under the Land Titles Act, or
(ii) a registrar’s abstract under the Registry Act,
together with a certified copy of the claim for line,
shall declare that the lien has expired and order that the registration of the claim for lien be vacated. R.S.O. 1990, c. C. 30, s. 45 (1).
Idem
(2) Where the court is satisfied that a lien that does not attach to the premises has not been preserved or perfected within the time allowed for doing so under section 31 or 36, the court upon the motion of any person without notice to any other person shall declare that the lien has expired. R.S.O. 1990, c. C. 30, s. 45 (2).
Order returning amount paid into court or cancelling security
(3) Where a declaration is made under subsection (1) or (2), the court shall order that,
(a) an amount that has been paid into court under section 44 in respect of that lien 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 lien be cancelled. R.S.O. 1990, c. C. 30, s. 45 (3).
General power to discharge lien
- (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 certification 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 who, it was given; or
(d) dismiss an action,
upon any proper ground and subject to any terms and conditions that the court considers appropriate in the circumstances. R.S.O. 1990, c. C. 30 s. 47 (1).
Direction by court
(2) where a certificate of action is vacated under subjection (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 subjection 44 (9). R.S.O. 1990, c. C. 30, s. 47 (2); 2010, c 16, Sched. 2, s. 2 (13).
[53] A motion for the removal of a lien under these provisions is akin to a summary judgment motion. On this point, see, inter alia, Advanced Construction Techniques v. OHL Construction Canada 2013 ONSC 7505.
[54] Under section 14(1) of the CLA, a lien is created when a person who supplies services or materials to an improvement for an owner, contractor or subcontractor. There is no dispute in this case that Aragon was an owner. There is a dispute about when Sco-Terra provided services within the meaning of section 14 of the CLA.
[55] In this case, there has not been any certification or declaration of substantial performance of the contract between Aragon and Sco-Terra. Further, Sco-Terra’s lien rights, if any, against Mono appear to flow from Sco-Terra’s contract with Aragon. As a result, Sco-Terra’s lien rights can be preserved as long as the provisions of section 31 are met. Subsections 31(1) and (2) state:
- (1) Unless preserved under section 34, the liens arising from the supply of services or materials to an improvement expire as provided in this section. R.S.O. 1990, c. C. 30, s. 31(1).
Contractor’s liens
(2) Subject to subsection (4), the lien of a contractor,
(a) for services or materials supplied to an improvement on or before the date certified or declared to be the date of the substantial performance of the contract, expires at the conclusion of the forty-give-day period next following the occurrence of the earlier of,
(i) the date on which a copy of the certificates or declaration of the substantial performance of the contract is published as provided in section 32, and
(ii) the date the contract is completed or abandoned; and
(b) for services or materials supplied to the improvement where there is no certification or declaration of the substantial performance of the contact, or for services or materials supplied to the improvement after the date certified or declared to be the date of substantial performance, expires at the conclusion of the forty-five-day period next following the occurrence of the earlier of,
(i) the date the contract is completed, and
(ii) the date the contract is abandoned. R.S.O. 1990, c. C. 30, s. 31 (2).
[56] I note that the other provisions of section 31 do not apply to this case. This brings me to a consideration of whether the conditions set out in subsection (2) have been met.
[57] The most important condition is the forty-five day period in section 31(2)(b). In order for Sco-Terra’s liens to be valid, the work that permits a lien to be placed on the property must have been completed by no earlier than September 10th, 2016.
[58] In this case, the residential lands and Kingfisher Drive were transferred by Aragon in 2008, and the Wastewater Treatment Plant commenced operations in 2009. When the invoices that Sco-Terra provided after 2012 are reviewed, it is clear that Sco-Terra was engaged in administrative work, and other tasks (including the repair of deficiencies) in order to obtain final clearances from Mono. This is not work related to the improvement of the lands.
[59] This brings me to the issue of whether repair work and/or deficiency work can extend the time limits for a lien. In my view, it cannot. The case-law is clear on this point. For example, in Applewood Glass and Mirror Inc. v. Baun Construction Inc. ([2009] O.J. No. 4845), Master Polika stated:
10 I am in agreement with the second basis upon which Justice Di Tomaso determined the lien expired, namely that an attempt to bootstrap lien rights after their expiry by additional work will not extend the time within which the claim for lien must be registered failing which is not preserved.
11 The leasehold owners also rely on the acceptance by Master Sandler in Canadian Rogers Eastern Ltd v. Canadian Glass, [1993] O.J. No, 2985 (Ont. Master) and in Arcon Group Inc. v. Jelco Construction Ltd., [2001] O.J. No. 4661 (Ont. Master) of the proposition that “doing work to rectify defective or improper work does not extend the time for registering a claim for lien.” I am in full agreement with Master Sandler and fully accept the proposition.
- In addition the leasehold owners rely on the proposition put forward in Wildberry Homes Inc. v. Properity One Credit Union Ltd., [2008] O.J. No. 5441 (Ont. S.C.J) by Justice Murray that a trivial amount of work performed or services supplied after completion of a contract will not serve to extend the time within which a claim for lien must be registered. I too accept this proposition.
[60] In this case, the work that was done after 2012 was administrative, and designed to correct deficiencies in the project. Nothing new was being constructed, and no improvements were being made to the property. Indeed, the only entries on Sco-Terra’s invoices for work on or after September 10th, 2016 that do not relate to account collection are as follows:
a) Attending the site on September 12th, 2016 to observe a curb-gutter removal and replacement. This was work required by Mono to rectify issues with the existing installation. It was also work performed by a trade, and not by any employee of Sco-Terra. The engineers were not engaged in any design activities that would have improved the property. They were checking on a feature that had been previously designed.
b) A telephone call on September 12th, 2016 to address the curb-gutter and grading deficiencies.
c) Telephone calls and reviews of e-mails in late September relating to the final assumption of the property, as well as a communication relating to the fact that the vacuum truck was on site removing sediment from the storm sewers.
d) There are some brief references in the last invoice (October 1, 2016 to November 7, 2016) about the assumption of the property by the Town. However, these invoices are also tied up with the issue of the payments that were owing.
[61] In addition, a review of the e-mail correspondence in the summer of 2016 makes it clear that Sco-Terra was responding to deficiencies and other issues raised by Mono, rather than providing any additional services to improvements. Further, the last mention of anything directly related to the Commercial Lands was in the fall of 2015, as described at paragraph 26 above.
[62] Counsel for Sco-Terra argued that the question of what is, and is not, a lienable service can be a genuine issue for trial. In some circumstances, this would be a sustainable position. In this case, however, the invoices that have been provided by Sco-Terra and the accompanying correspondence are clear. The work that Sco-Terra was doing was related to contract administration, final clearances and the completion of paperwork. A trial is not necessary to determine what Sco-Terra was doing in the last few weeks before the liens were placed on the property.
[63] Third, counsel for the Defendants argues that the claim is not for lienable services. Again, I accept that argument.
[64] Counsel for Sco-Terra argued that the definition of improvement has been expanded, and it can now include architectural services, engineering drawings and other services. Counsel also refers to 1246798 Ontario Inc. v. Sterling (2000 CanLII 29031 (ON SCDC), [2000] O.J. No. 4261 (Div. Ct.)) for the proposition that services for even planned improvements can, in limited circumstances, be lienable.
[65] While true, this principle does not assist Sco-Terra for two reasons. First, as set out above, the work that was done forty-five days before the lien was put on the property is clearly not for lienable services. Second, as I discuss elsewhere in these reasons, the property that the work was done for has not been owned by Aragon for some considerable time.
[66] Having determined that the services provided in the 45 days before the lien was registered were not lienable services, it is clear that Sco-Terra does not have any rights against Mono. Section 17(4) of the CLA states:
(4) Public highway, liability of municipality re – Despite subsection (1), where land is dedicated to a municipality as a public street or highway and an improvement is made to the land at the written request of, or under an agreement with, the municipality, but not at its expense, the municipality shall nevertheless, on default of payment by the proper payer, be liable to the value of the holdbacks under Part IV that would have been required were the improvement made at the expense of the municipality, and the procedure for making a claim under this subsection shall be the same as for enforcing a claim for lien against a municipality in respect of a public street or highway.
[67] In this case, counsel for the Defendants argues that there were no holdbacks, as there were no lienable services. Having accepted the fact that there were no lienable services in the relevant time period, there is no basis to claim a lien against Mono as Mono was not obligated to hold any monies back to cover lien claims.
[68] This brings me to Aragon’s argument that the lien has been placed on the wrong lands. I also accept this argument for two reasons. First, while it is quite possible that the entire development was a single property at the time that the project started, it was not a single property when the work finished. The property had been transferred to other owners long before this lien was placed on the property.
[69] Second, and more importantly, I reject Sco-Terra’s argument that the work it was performing was designed to improve the entire development.
[70] In Mr. Pellerin’s Affidavit, he speaks about the fact that the Watermark Development is part of the larger Brett Farm subdivision. That assertion may very well be true. However, it does not assist Sco-Terra’s case for two reasons.
[71] First, as counsel for Aragon rightly points out, the property was subdivided and transferred to different owners back in 2008. The fact that the property was originally one piece of land is irrelevant to the question of who owned it when the work was performed, and who owned it when the lien was registered.
[72] On that point, I note that Mr. Pellerin’s Affidavit spends some considerable time dwelling on the relationship between Mono and Aragon. In particular, he looks to the obligations under the subdivision agreement between Mono and Aragon. Considering this agreement does not assist Sco-Terra because Sco-Terra is not a party to the agreement, and does not have obligations beyond its own contract, which I have described above.
[73] Further, Mr. Pellerin states that:
j. I would be inaccurate and misleading (a misunderstanding of the nature of engineering work in a subdivision development) to attempt to artificially carve off stages in the engineering work, and tie this work to discrete blocks of land (as opposed to all of the lands in the Brett Farm) in identifying lienable improvements.
[74] This argument is made throughout Mr. Pellerin’s Affidavit, and throughout Sco-Terra’s factum. I reject this assertion. The work that Sco-Terra performed was specifically directed to particular projects for particular parts of the land. Even if Sco-Terra was the consulting engineer for the purposes of the Subdivision Agreement, its’ own contractual agreements set out at paragraph 18 state that the Commercial Lands are excluded from its scope of work. If certain lands are excluded from the scope of work, it is not reasonable to then argue that those lands were improved by that work.
[75] Further, the purpose of the CLA is, inter alia, to ensure that a party that provides improvement to a piece of land can claim lien rights against that land. The land that was improved by Sco-Terra’s work were the three separate parcels of land identified at paragraph 11. They provided no work that would have improved the commercial lands.
[76] Finally, there is Mr. Pellerin’s assertion (at paragraph 59 of his Affidavit) that Sco-Terra had done pre-servicing work that benefitted the whole property, including the commercial lands. This assertion does not assist Sco-Terra. Even if Sco-Terra had provided improvements to the entire property, and could lien the Commercial Lands as a result, the right to register that lien expired long before October of 2016. As I have discussed above, most (if not all) of the work done since 2012 is not lienable work. Certainly, none of the services provided in 2016 were lienable services.
[77] In the result, Sco-Terra’s lien was not properly registered against the Commercial Lands, and the lien is therefore discharged.
Issue #3- What Form Should the Order Respecting the Mono Lands Take?
[78] From the materials filed by the parties, it is difficult to know exactly what is in dispute with respect to the Order between the parties. It is clear that there is a substantial amount of correspondence on the issue of the form and content of the Order that resolves the March 5th, 2018 motion.
[79] In reviewing that correspondence, and the factums that the parties have provided, two issues appear to present themselves:
a) Whether the action between Mono and Sco-Terra should be consolidated with this action, or merely heard together or one after the other.
b) Whether the lien against Mono’s property should be vacated (and should still remain valid) or should be discharged.
[80] In order to ensure that I have properly captured what has to be decided on this issue, I have not only reviewed my notes from the motion, but I have also listened to the recording of the parties’ arguments.
[81] With respect to the first issue, counsel for Sco-Terra argued that these two actions should be consolidated into one court file, with one style of cause and one number. Counsel for the Defendants disputed this claim.
[82] In my view, these two actions should be heard together or one after the other as determined in the discretion of the trial judge. Consolidation is a relatively rare procedure. It is not the appropriate procedure for this case because the interests (and rights) of Sco-Terra with respect to the two Defendants are different. The Order that will issue is to have the matters heard together.
[83] With respect to the second issue, I am of the view that even if there was a dispute, the discussion before me on June 4th, 2018 makes it clear that the parties had agreed that, as of March 5th, 2018, the lien on Kingfisher Drive would be vacated, rather than discharged. The lien was to continue in existence until I determined whether it should be discharged.
[84] If any issues remain relating to the March 5th, 2018 Order, counsel may make an appointment to address them through the Trial Coordinator in Orangeville.
Next Steps
[85] As I indicated above, it is essential that the parties consider the next steps to be taken in this matter. In particular, the parties are to consider whether there is any overlap between these claims and the action brought by Mono in regards to the alleged deficiencies with the Wastewater Treatment Plant.
[86] To that end, the following steps are to be completed by the parties:
a) The parties are to advise each other as to their position on whether these actions have any issues in common with Mono’s action over the Wastewater Treatment Plant within thirty (30) days of today’s date.
b) The parties are to determine what steps are required to make these matters ready for trial within sixty (60) days of today’s date, and are to prepare a discovery plan with the dates that those steps are to be completed.
[87] In the event that the parties are unable to agree on either the issues relating to the Mono Wastewater Treatment Plant claim or the discovery plan, I retain jurisdiction to assist the parties in addressing these issues at an appearance in Brampton.
[88] One final comment should be made respecting these actions. The issue of whether there was any privity of contract between Mono and Sco-Terra was not argued before me and I have not made any final determinations on it. This is an issue that the parties should consider.
Conclusion
[89] For the foregoing reasons, I am ordering as follows:
a) Aragon’s motion to have the entire action dismissed as against it is denied, without prejudice to Aragon’s position at trial.
b) Sco-Terra’s lien on the Commercial Lands is hereby discharged.
c) Sco-Terra’s lien on Kingfisher Drive is now discharged, as opposed to being merely vacated, as was done last March.
d) These matters are to be heard together, or one after the other as the trial judge may direct.
e) The parties are to advise each other as to their position on whether these actions have any issues in common with Mono’s action over the Wastewater Treatment Plant within thirty (30) days of today’s date.
f) The parties are to determine what steps are required to make these matters ready for trial within sixty (60) days of today’s date, and are to prepare a discovery plan with the dates that those steps are to be completed.
g) I retain jurisdiction to address any issues relating to the resolution of the Order from the March 5th, 2018 motion, as well as any issues in respect of paragraphs e and f above.
[90] In terms of the costs of this motion, I have already received counsel’s bills of cost. I also confirm that there was a sealed Offer to Settle received from the Defendants. I have not viewed that document, but will do so once these reasons are released.
[91] The parties are to provide their submissions on costs within fourteen (14) days of the release of these reasons. Those submissions are not to exceed two (2) single-spaced pages, exclusive of offers to settle and case-law.
[92] Reply submissions are due seven days thereafter, and are not to exceed one (1) single-spaced page.
[93] The claim between the parties is for approximately $50,000.00. This was a complicated one-day motion with a number of appearances prior to the motion being able to be heard. In addition, the record was voluminous and there were detailed cross-examinations of both parties.
[94] As a result, in their costs submissions, counsel are directed to address the principle of proportionality. The parties should also address the issue of proportionality in their discovery plan.
LEMAY J
Released: January 25, 2019
COURT FILE NO.: 164/16
DATE: 2019 01 25
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
SCO-TERRA CONSULTINIG GROUPS LIMITED
Plaintiff
- and -
THE CORPORATION OF THE TOWN OF MONO
Defendants
-and between-
SCO-TERRA CONSULTING GROUP LIMITED
Plaintiff
-and-
ARAGON (HOCKLEY) DEVELOPMENT (ONTARIO) CORPORATION cob as THE ARAGON GROUP
Defendant
REASONS FOR JUDGMENT
LEMAY J
Released: January 25, 2019