Court File and Parties

COURT FILE NO.: CV-13-494453 and CV-14-496639

DATE: 2019-11-06

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: SCOTT, PICHELLI & EASTER LIMITED, as assignee for CAM MOULDING & PLASTERING LTD., and GENTRY ENVIRONMENTAL SYSTEMS LTD. BY ITS TRUSTEE, SCOTT, PICHELLI & EASTER LIMITED, Plaintiffs

AND:

DUPONT DEVELOPMENTS LTD., THE ROSE AND THISTLE GROUP LTD., FLORENCE LEASEHOLDS LIMITED, BEATRICE LEASEHOLDS LIMITED and ADA LEASEHOLDS LIMITED, Defendants

BEFORE: Sossin J.

COUNSEL: Antonio Conte, Counsel for the Plaintiffs Michael Handler and Emily Evangelista, Counsel for the Defendants

ENDORSEMENT ON RECONSIDERATION

OVERVIEW

[1] On March 26, 2019, I heard a motion brought by Scott, Pichelli & Easter Ltd. on behalf of the plaintiffs, two companies, Cam Moulding & Plastering Ltd. (“Cam Moulding”) and Gentry Environmental Systems Ltd. (“Gentry”) (collectively the “Lienholders”), seeking to oppose confirmation of the Report of Master Albert, dated May 17, 2018 (Cam Moulding & Plastering Ltd. v Dupont Developments Ltd., 2018 ONSC 3126).

[2] In her Report, Master Albert ruled that Florence Leaseholds Limited, Beatrice Leaseholds Limited, and Ada Leaseholds Limited (the “Defendant Mortgagees”) established priority over the Lienholders under s.78(3) of the Construction Act, R.S.O. 1990, c. C.30 (previously the Construction Lien Act) (the “Act”).

[3] She further held that as a result of this finding, the Defendant Mortgagees are entitled to all of the proceeds of sale of the Dupont Property, including funds which were paid into Court pending the outcome of the dispute with respect to priority.

[4] On July 30, 2019, I released my decision (Scott, Pichelli & Easter Ltd. et al. v. Dupont Developments Ltd. et al., 2019 ONSC 4555) (the “July 30, 2019 judgment”). I found that Master Albert’s Report should be confirmed, except in one respect.

[5] I concluded that Master Albert correctly determined that the Defendant Mortgagees established priority over the Lienholders under s.78(3) of the Act, but erred in determining that the Defendant Mortgagees were entitled to all of the funds which had been paid into Court, given that the Lienholders lien took priority over certain fees, charges and interest in relation to the mortgage.

[6] At the end of the judgment, I invited the parties to work together on the content and wording of the order to give effect to this decision. That order has yet to be finalized.

[7] The parties attended a case conference on September 13, 2019, at which the parties each indicated they wished to have the July 30, 2019 judgment reconsidered. I directed the parties to file materials for a motion to reconsider in writing.

[8] I received the Defendant Mortgagees’ notice of motion and submissions on October 2, 2019. I received the Lienholders’ submissions in response to this motion on October 7, 2019. I received the Lienholders’ submissions on their cross-motion on October 15, 2019 and reply submissions of the Defendant Mortgagees dated October 21, 2019. A further reply from the Lienholders was received on October 28, 2019, and I received further correspondence from the Defendant Mortgagees of that same date objecting to the Lienholders’ further reply submissions.

ANALYSIS

[9] Until an order is formally entered in the Court record, the Court has a broad discretion to vary or withdraw it, but only if it is in the interests of justice to do so: Montague v. Bank of Nova Scotia (2004), 2004 27211 (ON CA), 69 O.R. (3d) 87 (C.A.), leave to appeal refused [2004] S.C.C.A. No. 79 (S.C.C.).

[10] In Schmuck v. Reynolds-Schmuck (2000), 2000 22323 (ON SC), 46 O.R. (3d) 702, Himel J. referred to the confines of the jurisdiction to reopen a case as follows (at para. 25):

25 It is my view that a party who wishes a reconsideration alone would have to establish that the integrity of the litigation process is at risk unless it occurs, or that there is some principle of justice at stake that would override the value of finality in litigation, or that some miscarriage of justice would occur if such a reconsideration did not take place.

[11] What are the rare circumstances in which a reconsideration is justified? It has long been accepted that mathematical errors or errors of inadvertence can be dealt with by a judge without the need and expense of an appeal. As Granger J. stated in Rickett v Rickett (1990), 1990 8061 (ON SC), 71 D.L.R. (4TH) 734 at 725 (Ont. High Ct.), “If it is obvious that an error or omission has been made, counsel should always feel free to approach the trial judge and request that he or she reconsider his or her judgment in order to avoid the necessity of an appeal. On the other hand, counsel should not attempt to reargue their case prior to the formal judgment being issued and entered.”

[12] It is also clear that where a judge has failed to advert to a key statutory provision, a reconsideration will be appropriate. In Gore Mutual Insurance Co. v. 1443249 Ontario Ltd, 2004 18840 (“Gore”), Karakatsanis J. (as she then was) granted a motion for reconsideration where counsel failed to bring to her attention a relevant provision in the Insurance Act. She held (at paras. 7-8):

I agree that a judge should be most reluctant to re-open and vary a decision where the issue in respect to which the variance is sought was fully argued and is dealt with in the reasons. In this case, however, it is obvious an error was made by all counsel and by the Court. This is not a case where counsel seeks to re-argue the case or to have me reconsider my reasoning. This is a case of a clear error. Counsel for the respondent asked the Court to apply a section that had no application. Counsel for the applicant failed to bring to my attention a section in the legislation that rendered the section relied upon inapplicable. The section that was determinative in counsel’s submissions and in my reasons is clearly inapplicable. All counsel now concede that Section 124 (1) and (2) have no application to this case.

The interests of justice are not served by requiring an appeal on a clear error of law that followed inaccurate and incomplete legal submissions by all counsel. It is obvious from the decision that section 124 (7) would have changed my determination that the amendment had to be agreed in writing. I would have been required to consider the factual issues to determine whether there had been an oral agreement to amend the policy in these circumstances. Having already heard the full submissions on this remaining issue, I am prepared to vary my decision and consider the remaining issues in this application. No further evidence or submissions are required on the remaining issue.

[13] In light of these authorities, the rare circumstances where a reconsideration will be justified are where an error is both obvious, and where correcting this error would change the outcome of the decision from which reconsideration is sought. A motion for reconsideration is more likely to be successful where the parties agree that an error has occurred, and less likely to be successful where the subject matter of the alleged error remains contested by the parties.

[14] With this standard in mind, I now turn to the Defendant Mortgagees’ motion for a reconsideration of the July 30, 2019 judgment, and the cross-motion for reconsideration brought by the Lienholders.

The Defendant Mortgagees’ Motion for a Reconsideration

[15] The Defendant Mortgagees argue that the July 30, 2019 judgment omitted or misstated clear and compelling case law on the parties’ entitlement to the funds paid into Court. Specifically, the Defendant Mortgagees submit that the July 30, 2019 judgment:

a. Failed to consider the wording the standard charge terms under the applicable mortgage, which states that costs, charges, legal fees and other expenses relating to the mortgage shall be, with interest, a charge upon the land;

b. Failed to consider the Defendant Mortgagees’ obligation in possession to discharge the first encumbrance of the Manager’s Charge on the sale of the Dupont Property; and

c. Failed to consider binding authority which holds that interest on the mortgage and reasonable expenditures of the mortgagee are to be afforded the same priority as the principal of the mortgage, including Jade-Kennedy Development Corp., Re, 2016 ONSC 7125 and M. Sullivan & Son Ltd. v. Rideau Carleton Raceway Holdings Ltd. (1970), 1970 21 (SCC), 12 D.L.R. (3d) 662 (S.C.C.).

[16] The Lienholders oppose reconsideration on each ground.

[17] With respect to the mortgage’s standard terms, the Lienholders argue that this document was not before the Court at the time of the trial before Master Albert or at the hearing of this motion, and in any event these terms do not determine any of the issues decided by the July 30, 2019 judgment. The Lienholders submit that the standard terms deal with what is secured by the mortgage, and does not convert interest or any other charges into amounts “advanced” under the mortgage within the meaning of s.78(3) of the Construction Act.

[18] With respect to the Manager’s Charge, the Lienholders argue that while there is no question that the Manager’s charge had to be paid from the proceeds of the sale, this requirement does not address whether these fees take priority over the liens under s.78(3) of the Construction Act.

[19] With respect to the alleged errors in the statement and application of binding authority, the Lienholders submit that the Defendant Mortgagees are attempting to re-argue the legal questions decided in the July 30, 2019 judgment and provide a different interpretation of the case law referred to by the Defendant Mortgagees.

[20] I find the Defendant Mortgagees’ arguments with respect to potential errors in the July 30, 2019 judgment raise appropriate matters to consider on appeal, but do not constitute the type of obvious errors of inadvertence to controlling law as raised in Gore, which would meet the rare circumstances under which a reconsideration is appropriate in the interests of justice.

The Lienholders’ Cross-Motion for a Reconsideration

[21] The Lienholders seek to bring a cross-motion for reconsideration of the finding in the judgment that Master Albert was correct in finding the Defendant Mortgagees had established priority over the Lienholders under s.78(3) of the Act.

[22] There is some disagreement as to whether the Lienholders are seeking to leave to bring such a cross-motion or whether leave was granted at the case conference held on September 13, 2019, but nothing turns on this distinction, given that both the Lienholders and Defendant Mortgagees have provided submissions on the merits of the reconsideration request.

[23] The Lienholders submit that a reconsideration is warranted because Master Albert was bound by the decision of this Court in Park Contractors Inc. v. Royal Bank of Canada, 1998 14660 (ON SC) (“Park Contractors”), which they argue is a precedent holding that contaminated land such as the Dupont Property should be given no value for purposes of determining priority under the s.78(3) of the Act.

[24] The Lienholders refer to several authorities for the proposition that a Master is bound to apply the decision of a Superior Court justice on similar facts, including most recently R. & V. Construction v. Baradaran, 2019 ONSC 1551, at paras. 2, 4 and 7. While the Lienholders do not expressly identify an error in the July 30, 2019 judgment, by implication, the Lienholders position would appear to be that the failure of the July 30, 2019 judgment to reverse the Master on this issue was an obvious error that can and should be addressed on reconsideration.

[25] The effect of correcting this alleged error on a motion to reconsider would be that the Lienholders become entitled to the funds currently held in Court, irrespective of the outcome of the Defendant Mortgagees motion for reconsideration.

[26] The Defendant Mortgagees submit that the Lienholders simply are attempting to re-argue the findings of the July 30, 2019 judgment in relation to Master Albert’s findings of fact and law on the valuation of the Dupont Property. They also point out that Park Contractors may be distinguished as there was no ready purchaser for contaminated land in that case, while there was for the Dupont Property in this case.

[27] I make no comment on the continuing dispute between the Lienholders and Defendant Mortgagees on this aspect of the July 30, 2019 judgment. It is clear from the submissions that while this issue may be appropriate to address on an appeal, it does not constitute an obvious error that meets the rare circumstances under which a reconsideration is appropriate in the interests of justice.

CONCLUSION

[28] For the reasons above, I find that a reconsideration of the July 30, 2019 judgment is not warranted. Both the motion and cross-motion for reconsideration are dismissed.

[29] I would make no order as to costs on the motion or cross-motion for a reconsideration.

Sossin J.

Released: November 6, 2019