COURT FILE NO.: CV-20-634996
DATE: 2020 08 31
SUPERIOR COURT OF JUSTICE - ONTARIO
IN THE MATTER OF the Construction Act, RSO 1990, c. C.30, as amended
RE: GTA RESTORATION GROUP INC., Plaintiff
- and -
MARY JANE BAILLIE and MARTHA BAILLIE, Defendants
BEFORE: Master Todd Robinson
COUNSEL: A. Max and A. Spatz, counsel for the defendant, Martha Baillie (moving party)
M. Milosevic, counsel for the plaintiff (responding party)
HEARD: July 21 and 23, 2020 (via videoconference)
REASONS FOR DECISION
Overview......................................................................................................................................... 2
Background.................................................................................................................................... 2
Preliminary Issue – Admissibility of Supplementary Affidavit................................................. 5
Relevant Statutory Framework.................................................................................................... 6
(a) Amended language in the Construction Act........................................................................ 6
(b) Relevant provisions of the Consumer Protection Act, 2002................................................ 9
Analysis......................................................................................................................................... 10
(a) Applicable analysis under s. 47 of the Construction Act................................................... 10
(b) Is GTA’s lien an abuse of process?.................................................................................... 14
(c) Is GTA’s lien exaggerated?............................................................................................... 17
(d) Is the exaggeration willful?............................................................................................... 24
(e) What relief is appropriate?................................................................................................. 24
Vacating of lien............................................................................................................................ 25
Disposition.................................................................................................................................... 26
Costs.............................................................................................................................................. 26
Overview
[1] The defendant, Martha Baillie (“Baillie”), moves for an order pursuant to s. 47 of the Construction Act, RSO 1990, c C.30 (the “CA”) discharging the lien of the plaintiff, GTA Restoration Group Inc. (“GTA”), against the property at 20 Wychwood Park, Toronto on the basis that the lien is wilfully exaggerated and constitutes an abuse of process. In the alternative, Baillie seeks an order reducing the value of GTA’s lien to $16,000 or less pursuant to s. 44(2) of the Construction Act.
[2] GTA opposes the motion on the basis that its lien is not willfully exaggerated and that the motion is premature. GTA argues that further litigation is necessary for a proper and just determination of the dispute between the parties regarding the scope of work agreed, the work actually performed by GTA, and the value of those services.
[3] I have a number of reservations with respect to GTA’s lien. Baillie has highlighted several serious issues with GTA’s practices, the extent and value of services supplied by GTA, and the quantification of GTA’s lien. However, I am not satisfied that the evidentiary record is sufficiently complete or that the case law cited by Baillie supports her arguments for discharge of the lien. The record before me has substantial gaps and raises more questions than it answers. As a result, I am unable to fairly determine whether GTA’s pursuit of a lien constitutes an abuse of process. I have nevertheless determined that at least a portion of the lien is wilfully exaggerated, although am not satisfied that the evidence regarding the circumstances of exaggeration supports that GTA’s right to pursue a lien remedy should be denied.
[4] Accordingly, for the reasons that follow, I decline to discharge GTA’s lien, but am satisfied from the record that there is no triable issue with respect to exaggeration of at least a portion of the lien. The value of the lien should accordingly be reduced by the extent of that exaggeration, thereby reducing the lien to $112,359.08, inclusive of HST.
Background
[5] Baillie is one of the two registered owners of the subject property. The house on the premises was occupied by Baillie’s sister. Following discovery of her sister’s unfortunate passing, Baillie and her common law partner, Jonathan Lightstone (“Lightstone”), contacted several companies regarding cleanup and fly removal from a list of companies suggested by a neighbour. GTA was among those contacted and agreed to meet them immediately.
[6] In the evening on August 24, 2019, Tony Lleshi (“Lleshi”), a manager with GTA, attended Baillie’s home. Lleshi met with Baillie, Lightstone and their daughter in their living room. It is undisputed that Lleshi was informed about the circumstances of the passing of Baillie’s sister and the circumstances of her discovery. Cleanup services were requested. It is also undisputed that Lleshi told Baillie and Lightstone that decontamination would be required, that most contents of the house likely could not be saved, and that the work would be “expensive”.
[7] The scope of work actually agreed is an issue of serious dispute. Baillie signed a one-page work authorization provided by Lleshi, although the evidence is quite limited regarding the timing of when it was signed and what, if any, discussions occurred about its terms. Lightstone’s evidence is that it was presented to and signed by Baillie, after which he, Baillie and Lleshi then walked to the property. Lleshi was left with the keys after Lleshi told them it was no longer safe to enter the house. Neither a total price nor a basis upon which Baillie would be billed, such as hourly rates or other fees, is included in the work authorization. It appears from the record before me that there was no agreement as to price and that the only discussion involved the work being “expensive”.
[8] GTA appears to have begun work at the property immediately thereafter. GTA’s project manager, Philip Strunc (“Strunc”), attended the property for the first time on August 26, 2019. Strunc’s evidence is that he was responsible for general oversight of the project, the scope of which was relayed to him by Lleshi on his first day on site. Strunc was GTA’s representative for Baillie’s cross-examination on the lien that preceded this motion being brought. During that cross-examination, Strunc agreed that Lleshi’s instructions were to do a “complete tear out and removal of everything”. Strunc’s affidavit states that there was a serious hoarding situation throughout the house and several health and safety issues such as feces, urine stains, flies and maggots. Personal protective equipment (PPE) was worn by all of GTA’s workers in the course of their work, as depicted in various photographs in evidence.
[9] On August 31, 2019, Baillie and Lightstone left the country on a planned trip. Either before their departure or while they were away, Lleshi exchanged WhatsApp text messages with Baillie’s daughter and sent photographs of various rooms throughout the house. Details of certain contents that Baillie asked to be saved from the house were communicated to Lleshi by way of both lists of items and marked up photographs. Nothing in evidence suggests that Baillie expressed any concerns with GTA working in rooms throughout the house, as depicted in the photographs sent.
[10] On September 9, 2020, a neighbour advised Baillie and Lightstone that he had found the house completely empty with the door open. Lightstone’s evidence is that when Lleshi was confronted for an explanation and to provide a price for work completed, Lleshi replied that the door being open was “ok” since the house was empty and that a price was being finalized. GTA’s first invoice for $124,173.34 was rendered the same day. That invoice was generated using software known as Xactimate, which GTA submits is an industry-standard program. The invoice comprised 432 hours of labour charges, additional charges for work billed on a square foot basis, and charges for equipment, supplies and materials for work performed throughout the house.
[11] On September 16, 2020, Baillie and Lightstone returned from their trip. The following day they attended the property, but were unable to enter because the locks had been changed. Lightstone ultimately gained access through an open window. They found the property in a gutted state, with hardwood flooring ripped up, the kitchen cupboards and sink removed, bathroom fixtures removed, and ceramic tiling around fireplaces lifted and removed.
[12] There is no evidence in the record before me of any issues or concerns being raised with GTA by Baillie or Lightstone about GTA’s work, arising out of either their attendance at the property on September 17, 2019 or otherwise.
[13] On September 24, 2019, GTA sent a reminder notice to Baillie regarding payment of the $124,173.34 invoice being due. That email was followed by another advising Baillie that if payment was made within 24 hours, then GTA would not charge “for a second clean up”. That refers to a separate material handling invoice for $8,648.32. Baillie sent a responding email shortly after the second email, which stated as follows:
You will receive full payment within 24 hours. We deeply appreciate you not charging for the second clean up. In what form do you wish to receive payment?
I’ll call you now to verify.
[14] This email was not discussed or included in Baillie’s motion record. No reply affidavit evidence was tendered to explain it. Baillie’s email expresses no surprise or objection to the quantum of GTA’s invoice.
[15] Later that day, Baillie advised GTA that she had put her insurer on notice. An insurance adjuster contacted GTA for documents supporting its invoices. Lleshi appears to have told Baillie that GTA’s invoice would need to be recalculated since the insurer had become involved. What, if anything, was discussed between Lleshi and Baillie about adjustments to the invoice is not in evidence, nor is there any evidence that Baillie agreed to an increased billing. Baillie did acknowledge her discussion with Lleshi in a text message, though, where she stated:
Thank you. Again my apologies for not realizing that contacting my insurance company would alter your invoice and require that you recalculate.
[16] GTA thereafter updated and re-issued its invoice for the higher amount of $163,400.88, increasing the total labour hours charged to 616 hours and also increasing charges for other line items. That invoice was sent to Baillie’s insurer with an updated and re-issued material handling invoice for the higher amount of $17,901.31, as well as one of two sets of timesheets apparently maintained for the work showing higher total recorded hours. The other set of timesheets, with variant lower total hours for the same employees on the same dates, was disclosed in the context of the cross-examination on GTA’s lien.
[17] GTA has received no payment from either Baillie or her insurer.
[18] Baillie’s insurer subsequently retained two consultants to review GTA’s work: Building Matters and Environmental Services Group Inc. Reports from these consultants were provided to GTA in early December 2019. Baillie’s insurer put GTA on notice that it viewed GTA’s billing to be excessive, including both work not actually performed and work not required or called for given the nature of the loss. Collectively, the consultant reports challenge the extent of work actually performed by GTA and the value of that work. In particular, Building Matters assesses the value of necessary emergency repairs at $16,212.93. GTA provided no response to Baillie’s insurer or the consultant reports.
[19] In its claim for lien, GTA claims for unpaid services and materials in the amount of $163,400.88 supplied to both defendants for “clean-up and restoration services of deceased owner”. It is undisputed that the amount claimed is the amount of the second services invoice re-issued after Baillie’s insurance company became involved. The material handling invoices do not form part of the lien, although the higher invoice is claimed in the action as a contract debt.
[20] The statement of claim has not been served on the defendants. GTA has brought a motion to extend the time for service and to add two additional defendants, but that motion was short-served for a return concurrently with Baillie’s motion. GTA’s motion was accordingly adjourned to a date to be fixed either by agreement of all parties and the proposed defendants or via case conference with me. It remains to be resolved.
[21] A detailed cross-examination on the claim for lien pursuant to s. 40 of the Construction Act was conducted by Baillie over two days in April 2020. That cross-examination gave rise to a number of undertakings for which answers were provided in May 2020. It appears from the record before me, including the cross-examination transcript and the related exhibits, that issues regarding quantification and validity of the lien have been the subject matter of extensive documentary production and examination.
Preliminary Issue – Admissibility of Supplementary Affidavit
[22] Baillie challenges the admissibility of a supplementary affidavit of Philip Strunc sworn July 20, 2020 tendered by GTA in support of its opposition to Baillie’s motion. That affidavit appends and summarizes a “preliminary report” prepared by David Herring of WriteLoss Inc., which critiques the report of Building Matters obtained by Baillie’s insurer. Strunc’s supplementary affidavit was served and filed the day prior to the motion hearing, with no prior notice from GTA that a report had been commissioned, would be relied upon for the motion, or that supplementary evidence would be served at all.
[23] The timetable fixed for this motion was set out in my endorsement dated June 22, 2020. It was fixed following the submissions of counsel for GTA and Baillie regarding asserted urgency of the motion. It included, inter alia, a deadline for GTA to serve any responding motion record and any cross-motion record by July 3, 2020, with any cross-examinations completed by July 9, 2020. It also included provision for a case teleconference on July 10, 2020 to address any issues that had arisen between the parties. That case conference was cancelled because the parties were “on track” with the motion schedule and had no issues to address.
[24] Baillie submits that not only is the affidavit and attached report late-served, but serving the affidavit and report the day prior to the hearing left no opportunity for a proper review, cross-examination, or response. Baillie argues that the motion timetable was intended to permit decisions on whether cross-examination was needed. The scheduled case teleconference was specifically cancelled based on confirmation from GTA’s counsel that the motion was on schedule and that no directions from the court were required. Baillie submits that representation was clearly made at a time when GTA must have known that an expert was being retained, arguing that admission of the affidavit in these circumstances is unfair and procedurally abusive to Baillie.
[25] GTA argues that the report is not tendered for the truth of its contents, but rather is tendered solely to demonstrate that there are legitimate triable issues regarding the quantification of GTA’s supply of services and materials. GTA submits that prior notice was not given because it was not known that the report would be relied upon for this motion until it had been obtained and reviewed.
[26] I agree with Baillie. Court orders are not suggestions or recommendations. Responding materials were to be served by July 3, 2020. Where necessary, Rule 3.04 of the Rules of Civil Procedure allows parties to vary a court-ordered timetable on consent, unless the order provides otherwise. GTA made no request to extend the time for responding materials nor gave any notice of an intention to serve supplementary evidence. When the affidavit was ultimately served the day prior to the motion hearing, no prior notice had been given to Baillie. To admit the affidavit in such circumstances would be procedurally unfair to Baillie and could well be construed as condonation by the court of such practices.
[27] I am reinforced in my decision by the limited probative value of the supplementary affidavit, which does not outweigh the procedural unfairness and prejudice to Baillie if it were considered. Without going through the affidavit and appended report in detail, I note the following:
(a) Strunc’s affidavit purports to summarize Mr. Herring’s brief three-page report regarding valuation of GTA’s services. Although GTA’s counsel attempted to argue that the report is relied upon only for the fact that it exists, in my view, GTA is tendering the report for consideration of the truth of its contents, which is double hearsay as an exhibit to Strunc’s affidavit;
(b) Mr. Herring’s report does not comply with the requirements of Rule 53.03 of the Rules of Civil Procedure;
(c) Mr. Herring’s report appears to be based on only limited documentation, which does not include the transcripts from the cross-examination on GTA’s lien or answers to undertakings. Those are central in Baillie’s arguments regarding the valuation of services and exaggeration of GTA’s lien; and
(d) Mr. Herring does not appear to be impartial. For example, he states that GTA’s “highly trained technicians are experts in biohazard and trauma scene cleanup”, but provides no foundation for his apparent conclusion on the expertise of GTA’s employees. He also concludes, without discussion or apparent foundation, that GTA “fulfilled its contractual obligations”.
[28] For the foregoing reasons, the supplementary affidavit and appended report are not admitted and, accordingly, have not been considered in determining this motion.
Relevant Statutory Framework
(a) Amended language in the Construction Act
[29] On July 1, 2018, substantial amendments to the now-former Construction Lien Act (the “CLA”) came into force (with subsequent further amendments), including renaming the legislation to the CA. Application of the new provisions of the CA is governed by s. 87.3, which operates such that the provisions of the act as they read on June 29, 2018 (i.e., the now-former CLA) continue to apply where a prime contract for an improvement was entered into prior to July 1, 2018. The contract between Baillie and GTA was entered into well after July 1, 2018. Accordingly, the CA is applicable to the subject improvement and, thereby, GTA’s lien.
[30] The amended language of the current s. 47 bears directly on disposition of this motion. There does not appear to have been any published or reported case law interpreting the impact of the amended language. It provides as follows:
General powers of the court
Power to discharge
47 (1) The court may, on motion, order the discharge of a lien,
(a) on the basis that the claim for the lien is frivolous, vexatious or an abuse of process; or
(b) on any other proper ground.
Power to vacate, etc.
(1.1) The court may, on motion, make any of the following orders, on any proper ground:
An order that the registration of a claim for lien, a certificate of action or both be vacated.
If written notice of a lien has been given, a declaration that the lien has expired or that the written notice of the lien shall no longer bind the person to whom it was given.
An order dismissing an action.
Conditions
(1.2) An order under subsection (1) or (1.1) may include any terms or conditions that the court considers appropriate in the circumstances.
[31] The predecessor language of s. 47 of the now-former CLA was as follows:
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 that the court considers appropriate in the circumstances.
[32] While the structure of the provision has changed, the only substantive difference is the addition of a specific ground for discharging a lien, namely on the basis that the lien is “frivolous, vexatious or an abuse of process.” That amendment was one of the recommended changes outlined in the April 2016 expert report prepared by Bruce Reynolds and Sharon Vogel entitled, “Striking the Balance: Expert Review of Ontario’s Construction Lien Act”, which was a precursor to the legislative amendments. In Section 5.3 of that report, the following recommendation was made:
Section 35 of the [Construction Lien] Act, which imposes penalties for exaggerated claims, should be amended to replace the concept of “grossly inflated” liens with the concept of “wilfully exaggerated” liens, refocussing the threshold at a more sensitive level. As well, the court should be given the discretion to discharge a claim for lien in whole or in part if on a balance of probabilities it is established that the claim is frivolous, vexatious, or an abuse of process.
[33] Baillie argues that GTA’s lien is willfully exaggerated and an abuse of process. That position also engages s. 35 of the CA, the language of which was also amended from the predecessor s. 35 of the CLA, generally consistent with a further recommendation made in the Reynolds and Vogel report in Section 5.3, as follows:
The provision should further be amended to allow the court to find, where there is wilful exaggeration, that the lien claimant is liable for any damages incurred as a result of the exaggerated claim, including bond premiums, costs, and, where the court considers it just, the lien amount should be reduced by an amount up to the amount of the difference between the wilfully exaggerated amount and the actual amount of the lien claim; provided that a defence of good faith should be available to the lien claimant.
[34] The current s. 35 adds the proposed good faith criteria in assessing reduction of an exaggerated lien, providing as follows:
Exaggerated, false claims
Liability
35 (1) In addition to any other ground on which the person may be liable, any person who preserves a claim for lien or who gives written notice of a lien in the following circumstances is liable to any person who suffers damages as a result:
The person knows or ought to know that the amount of the lien has been wilfully exaggerated.
The person knows or ought to know that he or she does not have a lien.
Reduction of lien amount
(2) In the circumstances described in paragraph 1 of subsection (1), the court may, on motion, order that the lien amount be reduced by the exaggerated portion, as determined in accordance with section 17, if it finds that the person has acted in good faith.
(b) Relevant provisions of the Consumer Protection Act, 2002
[35] In seeking discharge of GTA’s lien, Baillie relies on various provisions of the Consumer Protection Act, 2002, SO 2002, c 30, Sched A (the “CPA”), which Baillie alleges were breached by GTA. Several provisions are particularly relevant in disposition of this motion.
[36] It is undisputed that the agreement between Baillie and GTA is a “consumer agreement” under the CPA. There are two additional definitions relevant to this motion:
(e) a “future performance agreement”, which is defined in s. 1(1) of the CPA as “a consumer agreement in respect of which delivery, performance or payment in full is not made when the parties enter the agreement”; and
(f) a “direct agreement”, which is defined in s. 20 of the CPA as “a consumer agreement that is negotiated or concluded in person at a place other than (a) at the supplier’s place of business; or (b) at a market place, an auction, trade fair, agricultural fair or exhibition”.
[37] Mandated requirements for a direct agreement are set out in s. 35 of O Reg 17/05 under the CPA. These include a fair and accurate description of the goods and services to be supplied to the consumer, including the technical requirements, if any, related to the use of the goods or services; the total amount payable by the consumer under the agreement or, if the goods and services are to be supplied during an indefinite period, the amount and frequency of periodic payments; the terms of payment; an itemized list of the prices at which the goods and services are to be supplied to the consumer, including taxes and shipping charges; the date or dates on which delivery, commencement of performance, ongoing performance and completion of performance are to occur, as applicable; and a mandatory statement about rights under the CPA.
[38] Section 93(1) of the CPA provides that consumer agreements not made in accordance with the requirements of the CPA are presumptively not binding on a consumer. However, pursuant to s. 93(2), the court retains discretion to enforce a non-compliant consumer agreement, in whole or in part. The section provides as follows:
Consumer agreements not binding
93 (1) A consumer agreement is not binding on the consumer unless the agreement is made in accordance with this Act and the regulations.
Court may order consumer bound
(2) Despite subsection (1), a court may order that a consumer is bound by all or a portion or portions of a consumer agreement, even if the agreement has not been made in accordance with this Act or the regulations, if the court determines that it would be inequitable in the circumstances for the consumer not to be bound.
Analysis
(a) Applicable analysis under s. 47 of the Construction Act
[39] Baillie seeks an order discharging GTA’s lien and vacating the related registrations of the claim for lien and certificate of action pursuant to s. 47 of the CA or, in the alternative, an order reducing the amount of GTA’s lien to $16,000 or less pursuant to s. 44(2).
[40] Motions to discharge liens commonly challenge one of the three central aspects of a lien: quantum, timeliness or lienability. A majority of the case law under s. 47 of the former CLA is focused on those issues. However, in this case, the argument advanced by Baillie for discharge of GTA’s lien is more principled.
[41] Baillie argues that when a lien claimant knows or ought to know that maintaining its lien constitutes an abuse of the special rights afforded to contractors and subcontractors by the CA, it is just to deny that lien claimant the continued security of a lien. Essentially, Baillie argues that abusing the extraordinary lien remedy should disentitle a lien claimant from claiming it at all, albeit without prejudice to pursuing other civil claims in contract or tort. Baillie argues that good faith is a key element under the amended language of the CA and must be demonstrated in circumstances such as this case, where a lien is pursued by a contractor for services and materials allegedly supplied that were not clearly authorized by the owner and for which no price was clearly discussed or agreed between the parties.
[42] Proper analysis on a motion to discharge a lien under s. 47 of the CA is disputed by the parties, including the application of case law interpreting s. 47 of the former CLA to the current language in s. 47 of the CA. In assessing the proper analysis to be applied, I have considered each party’s submissions, the impact of the amended language in s. 47, and the two recent decisions by the Divisional Court in R&V Construction Management Inc. v. Baradaran, 2020 ONSC 3111 (Div Ct) and Maplequest (Vaughan) Developments. Inc. v. 2603774 Ontario Inc., 2020 ONSC 4308 (Div Ct).
[43] I agree with Baillie that her motion is not a motion for summary judgment and it would be an error to treat it as such. As recently set out by the Divisional Court in Maplequest, a discharge motion under s. 47 of the CA and a motion for summary judgment are “procedurally different things”. However, although a motion under s. 47 is not summary judgment motion, it has nevertheless been repeatedly held to be analogous to a summary judgment motion, as recently affirmed by the Divisional Court: Maplequest, supra at para. 25.
[44] In M. Fuda Contracting Inc. v. 1291609 Ontario Ltd., 2018 ONSC 4663, Boswell J. commented that, while a summary judgment motion is one type of process that “falls under the umbrella” of s. 47, it is not the only one. I agree. Section 47 has been recognized as being broadly drafted and applicable in many situations: see, for example, M. Fuda Contracting Inc., supra, at para. 27; Louch v. Louch, 2011 ONSC 2998 at para. 27; Kamali Design Home Inc. v. Bondarenko, 2013 ONSC 5506 at para. 25. There are matters properly addressed under s. 47 that do not necessarily seek a summary disposition of a lien action on its merits. For that reason, I agree that it would be inappropriate to simply to read the provisions of Rule 20 into s. 47 of the CA: Louch, supra at para. 27; Kamali Design Home Inc., supra at para. 25.
[45] Given the variety of manners in which s. 47 may be used to seek discharge of a lien, it would also be an error to require the summary judgment “best foot forward” evidentiary onus in all s. 47 motions. There are many conceivable “proper grounds” that may support discharge under s. 47 that do not engage triable issues, such as ongoing procedural delays contrary to the summary procedure required by the CA or non-compliance with court orders. Nevertheless, the “best foot forward” evidentiary onus is well-established in s. 47 motions: see, for example, G.C. Rentals Enterprises Ltd. v. Advanced Precast Inc., 2014 ONSC 4237 at para. 35; Diamond Drywall Contracting Inc. v. Ikram, 2016 ONSC 5411 (Master) at para. 18. In my view, such an evidentiary onus only reasonably arises where s. 47 of the CA is used in a manner akin to Rule 20 of the Rules of Civil Procedure.
[46] Baillie submits that there is no longer any “best foot forward” evidentiary onus, relying on the following statement made by the Divisional Court in R&V Construction, supra at para. 46:
A s.47 motion is routinely a master’s motion – whether brought before or after a case has been referred to the master for trial – and it is not a motion for summary judgment under R.20 of the Rules. There is no requirement for parties to “put their best foot forward”.
[47] I do not agree with Baillie that the Divisional Court’s statement was intended to overturn established case law holding that parties must put their best evidentiary foot forward in s. 47 motions. The Divisional Court’s comment must be read in context of both the paragraph in which it is stated and the decision as a whole.
[48] In R&V Construction, the defendant had moved for discharge of the plaintiff’s lien under s. 47 of the CLA. When the motion came on for the hearing, the defendant was self-represented. In the course of the hearing, the defendant’s s. 47 motion was effectively converted into a summary judgment motion, with judgment ultimately awarded against the moving defendant. That context is significant in reading the Divisional Court’s decision. I do not read R&V Construction as holding that there is never a “best foot forward” obligation. Rather, I read it as holding that, in the context of the defendant’s motion to discharge the lien, the defendant had no “best foot forward” evidentiary onus to demonstrate triable issues in his own defences. Such a reading is consistent with the balance of para. 46, in which the Divisional Court goes on to state expressly that s. 47 does not provide a remedy for a plaintiff to obtain judgment. It is also consistent with the more recent decision in Maplequest, in which the Divisional Court holds, at para. 25, that the underlying test on a s. 47 discharge motion is “whether there is a triable issue in respect to any of the bases on which discharge of the lien is sought”.
[49] R&V Construction is specifically discussed in Maplequest. In Maplequest, at para. 26, Divisional Court explains that the procedural distinctions between a s. 47 discharge motion and a summary judgment motion were important in R&V Construction “because of the issues of procedural fairness that were raised for a self-represented litigant when the Master used the enhanced powers on a motion for summary judgment on a [s.] 47 motion”.
[50] The analogous nature of s. 47 motions and summary judgment motions, as well as the distinctions between them, becomes evident when the analytical focus is placed on the bases upon which discharge is sought. Unlike a summary judgment motion, the court is not concerned on a s. 47 motion with whether there are any triable issues. Rather, the court is only concerned with triable issues in respect of the bases for discharge. Analogous to a summary judgment motion, though, there must be some evidentiary onus on both parties, else the court may well be unable to make any fair, just or reasonable assessment on whether there are triable issues in respect of the bases on which discharge of the lien is sought.
[51] In my view, such an approach is consistent with the requirement in the CA that the procedure in a lien action shall be as far as possible of a summary character, having regard to the amount and nature of the liens in question: see s. 50(3) of the CA (formerly s. 67(1) of the CLA). Where the substantive merits of a lien are engaged, in whole or in part, then absent a “best foot forward” evidentiary onus, it is difficult to fathom how a discharge motion could be effectively brought and disposed of by the court in accordance with the statutory requirement for a summary procedure. If the court cannot presume that the parties have “led trump” on the disputed issues on the discharge motion, it would be too easy for a lien claimant plaintiff to resist legitimate discharge motions with arguments that further and better evidence may be available at trial, and similarly too easy for a defendant to bring these motions.
[52] GTA argues that only the moving party has an obligation to put its “best foot forward”, citing Vestacon Limited v. ARC Productions Ltd., 2018 ONSC 5366 at para 63. GTA argues that a responding party’s only onus is to prove its claim has a real chance of success, citing Sanzone v. Schechter, 2016 ONCA 566 at para. 30. I agree that the moving party has the primary evidentiary onus on a motion under s. 47. However, I do not agree that a responding party has no similar “best foot forward” evidentiary onus in response to the motion.
[53] GTA misinterprets both Vestacon and Sanzone. In Vestacon, at paras. 62-63, Master Albert expressly observed that both parties have the same evidentiary onus in a s. 47 motion, holding as follows:
[62] It is well settled law that a motion pursuant to section 47 of the Act to declare a construction lien expired or to otherwise summarily dismiss an action to enforce a lien claim is akin to a motion for summary judgment.
[63] Summary judgment is appropriate where it will allow for a fair and just determination of the issue in dispute without a trial. The parties to such a motion are expected to lead their best evidence, to put their “best foot forward”, to “lead trump”, or risk failure. The party responding to such a motion must meet the onus of proving that there is a genuine issue for trial.
[54] I also do not agree that Sanzone stands for the proposition that a responding party to a summary judgment motion does not have a “best foot forward” onus. Although not cited by either party, subsequent Court of Appeal decisions have acknowledged a responding party’s onus to put its “best foot forward” in response to a summary judgment motion: see, for example, Bergen v. Fast Estate, 2018 ONCA 484 at para. 11. However, in the context of this motion, the Divisional Court has clearly articulated that motions under s. 47 of the CA are distinct from motions for summary judgment. The decision in Sanzone, which was an appeal from a motion for summary judgment under Rule 20 of the Rules of Civil Procedure, is accordingly not binding on me regarding evidentiary onuses on a motion under s. 47 of the CA. There is no equivalent to s. 50(3) of the CA in the Rules of Civil Procedure.
[55] GTA’s position on quantification of its lien highlights the inequity of not requiring GTA to put its best evidentiary foot forward. GTA submits that the motion is premature, that discoveries are needed, and that there will be other means of proving its claim at trial. However, Baillie has conducted an extensive cross-examination pursuant to s. 40 of the CA seeking documents and evidence that would support the quantum claimed by GTA. In reliance on the gaps in the evidence provided, Baillie has brought this motion. At a minimum, GTA must have an obligation to lead evidence to demonstrate triable issues regarding the challenges raised by Baillie. GTA is in the best position to put forward evidence that will be tendered at trial to support its lien. If not obliged to do so in response to Baillie’s motion, how can the court reasonably assess if there are, indeed, triable issues?
[56] In my view, neither R&V Construction nor Maplequest alter the prior case law requiring both the moving party and responding lien claimant to put their best foot forward in s. 47 motions where the court must assess if there are triable issues, such as challenges to timeliness of a lien, quantum of a lien, or lienability of services or materials supplied. On my reading, the Divisional Court has clarified only that the evidentiary onus extends solely to the bases on which discharge is sought.
[57] As noted above, the amended language in s. 47(1)(a) of the CA adds a specific ground to discharge a lien “on the basis that the claim for the lien is frivolous, vexatious or an abuse of process”. On this motion, Baillie focuses on abuse of process, citing Goudge J.A.’s dissenting decision in Canam Enterprises Inc. v. Coles, 2000 CanLII 8514 (ON CA), [2000] OJ No 4607 (CA), which was affirmed on appeal by the Supreme Court of Canada. Goudge J.A. stated, at para. 55, as follows:
The doctrine of abuse of process engages the inherent power of the court to prevent the misuse of its procedure, in a way that would be manifestly unfair to a party to the litigation before it or would in some other way bring the administration of justice into disrepute. It is a flexible doctrine unencumbered by the specific requirements of concepts such as issue estoppel. [citations omitted]
[58] It remains an open question whether a moving party must demonstrate that there is no triable issue on an allegation of abuse of process. I agree with Baillie that the amended language of s. 47 was intended to and does provide greater discretion for the court to discharge liens that are demonstrated to be a misuse of the CA. There is a body of existing case law regarding similar frivolous, vexatious, and abuse of process language in the Rules of Civil Procedure that may be of assistance in assessing the new language of s. 47(1)(a) of the CA. However, it is not necessary for me to make that determination on this motion.
[59] In this case, as outlined below, I lack sufficient evidence in the record before me to make a fair and just determination that GTA’s lien is an abuse of process. I accordingly need not determine if there must first be a finding that there is no triable issue on abuse of process before discharge is granted on that basis.
(b) Is GTA’s lien an abuse of process?
[60] Lienability and timeliness of GTA’s lien are not challenged on this motion. Since Baillie has not yet defended, whether they will be issues in the action is unclear. Baillie focuses on the quantum of GTA’s lien and broader issues of public policy, hinging primarily on GTA having maintained a wilfully exaggerated lien with what Baillie characterizes as “clear examples of fraudulent billing” based on a work authorization violating the CPA.
[61] GTA argues that s. 47 does not apply to an exaggerated lien, which cannot itself be an abuse of process. Rather, exaggerated liens are argued to be solely within the ambit of s. 35, which expressly contemplates relief for a lien proven to be exaggerated, namely reduction in the quantum of the lien. As GTA points out, Baillie has tendered no case law holding that an exaggerated lien constitutes an abuse of process warranting full discharge. Only one case put before the court comes close. In Kamali Design Home Inc., supra, McEwen J. found, at para. 35, that the plaintiff’s exaggerated lien was itself an abuse of process, but only ordered a discharge conditional upon the posting of reduced security for the lien.
[62] I do not accept GTA’s position that wilful exaggeration cannot be a basis for determining that a lien is an abuse of process under s. 47. The nature, extent, and knowledge (or reasonable knowledge) of exaggeration are factors that, in my view, are properly considered by a court. Whether they are sufficient to warrant discharge will turn on the facts and circumstances of each case.
[63] In this case, Baillie submits that the extent of exaggeration and what Baillie argues are fraudulent practices call into question the legitimacy of the entire lien. They are argued to support that the lien constitutes an abuse of process. My difficulty with Baillie’s position is that, in order to accept it, I must make a series of factual determinations regarding a contractual relationship on which the record before me lacks sufficient evidentiary detail.
[64] Baillie argues that the court need not determine the contractual scope of work to find that GTA’s practices are abusive and, as a result, that the lien is an abuse of process. I do not agree. Whether the services and materials for which GTA has liened were agreed by the parties is highly relevant to assessing if GTA’s lien constitutes an abuse of process. The lien of a contractor is directly tied to the price of services and materials supplied to an improvement on behalf of an owner: see 14(1) of the CA. “Price” is defined in s. 1(1) of the CA with specific reference to the agreed contract price or, if no specific price has been agreed, the actual market value of the services or materials that have been supplied under the contract. Put simply, GTA is only entitled to lien for the agreed price or value of services supplied under its contract with Baillie. The agreed or authorized scope of contractual work is thereby directly relevant to the quantum of GTA’s lien.
[65] I accept that the subject contract is both a “direct agreement” and a “future performance agreement” under the CPA. I also accept that the one-page work authorization, which appears more applicable to water damage than biohazard remediation, clearly does not comply with the requirements of the CPA. However, I do not accept that breaches of the technical requirements of the CPA are themselves a basis to find GTA’s lien to be an abuse of process. Prior cases have held, applying s. 93(2) of the CPA, that breaches of the CPA do not necessarily preclude recovery for services and materials supplied where the equities favour holding the consumer to the agreement: Grainger v. Flaska, 2013 ONSC 4863 (Master) at paras. 79-82; Connect Electric Inc. v. Pullen and Greensides, 2013 ONSC 1837 at paras. 59-60.
[66] Factors to be considered when deciding to apply s. 93(2) of the CPA include the serious consequences of invalidating the contract, the social utility of those consequences, the class of persons for whom the prohibition was enacted, whether the contract was bargained for at arm’s length, whether the consumer was unfairly taken advantage of, whether the agreement was wholly or substantially completed, the degree of benefit derived by the consumer, and whether it would be inherently wrong or contrary to public policy to enforce the contract: Connect Electric Inc., supra at paras. 57-58.
[67] I am unable to fairly determine on the record before me whether GTA is attempting to defraud Baillie’s insurer, as Baillie alleges, whether this is a case where discretion under s. 93(2) of the CPA should be exercised, or whether GTA’s lien constitutes an abuse of process. There are simply too many factual disputes, evidentiary gaps, and seeming inconsistencies in the evidence. Without going through them all in detail, I note the following:
(g) I agree with Baillie that Strunc’s evidence on contract discussions and agreed scope of work is unattributed hearsay that should be given no weight on this motion. Strunc was not present at the meeting between Lleshi, Baillie and her family. Strunc took his instructions on the scope of work to be performed from Lleshi, who has not given evidence himself. However, there is also no evidence from Baillie. The significance of her evidence is underscored by her email to GTA on September 24, 2019, which appears to acknowledge indebtedness for the initial $124,173.34 invoice. In my view, that email is inconsistent with the “shock” described in Lightstone’s affidavit when he and Baillie attended the property on September 17, 2019. Based on Lightstone’s evidence, Baillie and Lightstone had serious concerns with the work performed by GTA by no later than September 17, 2019, yet never relayed their objections or concerns to GTA. Instead, one week later, Baillie advised GTA that she would pay the invoice in full. No evidence has been tendered to explain that inconsistency.
(h) Baillie argues that GTA relied on her ignorance when they chose not to provide her any pricing framework (which GTA had available at the time) because she did not ask for it and did not know to ask for it. I agree that GTA’s failure to provide any pricing was a breach of the CPA. Only providing pricing to customers who ask for it is, in my view, a questionable practice. However, Lightstone does acknowledge in his affidavit that Lleshi advised that decontamination work would be “expensive”. Lightstone also acknowledges in his affidavit that Lleshi advised that decontamination would be required, a “certificate of decontamination” would be needed to sell the property, that most of the contents of the house could not be saved, and that any items that could be saved would require cleaning at additional expense. No evidence from either Baillie or Baillie’s daughter has been tendered, despite both apparently being present at the initial meeting with Lleshi.
(i) Baillie has tendered reviews of GTA from www.homestars.com, including both negative reviews from alleged customers and positive reviews purportedly written by GTA itself. Questions on these reviews were refused during cross-examination on GTA’s lien. Baillie argues that an adverse inference should be drawn from those refusals, but has not addressed well-established law on similar fact evidence, namely that evidence regarding general propensity or disposition of a party is typically excluded. It is now trite law that admissibility of such evidence depends upon its probative effect balanced against the prejudice caused by its admission, whatever the purpose: R. v. Handy, 2002 SCC 56 at paras. 36 and 49-50. Here, Baillie seeks to establish a pattern of conduct supporting that GTA’s lien is abusive. In assessing whether GTA’s lien is an abuse of process, there may be some probative value to knowing the circumstances of the negative reviews, but it may well be outweighed by its prejudicial effect. There is too limited record on which to assess the probative value and prejudicial effect. In these circumstances, given the prevailing law on similar fact evidence, it would be unfair to draw an adverse inference on this motion from GTA’s failure to answer questions about online reviews, particularly where they relate to other customers on other unrelated projects that may or may not have involved biohazard remediation in similar circumstances. I accordingly decline draw any inference.
(j) Baillie argues that the value of services and materials supplied is no greater than approx. $16,000, relying on Building Matters’ valuation of GTA’s services and materials at $16,212.93 and Strunc’s “admission” during the cross-examination on GTA’s lien that the cost of remedial work in proximity to where Baillie’s sister was found “would have been something like” $16,000. Neither are reliable indicators:
(i) Firstly, the report is only in evidence as an exhibit to the cross-examination on GTA’s lien and is not tendered or explained by any affiant on behalf of Baillie. Baillie’s counsel also expressly confirmed that Baillie does not rely on it for the truth of its contents, but rather the fact that it exists. In my view, without being tendered for the truth of its contents and without having the expert opinion properly before the court, it has limited if any weight on this motion.
(ii) Secondly, Strunc may have acknowledged the $16,000 figure, but he did not confirm it was the extent of the agreed work properly performed by GTA under its contract.
(k) Lightstone’s evidence is that GTA was never asked to address any issues other than decontamination and cleanup, but he does not state how he knows what discussions occurred or did not occur between Baillie and representatives of GTA after the initial meeting at which the work authorization was signed. Strunc’s evidence is that Lightstone was not involved in the project beyond attending that initial meeting. I was directed to no contemporaneous records supporting any active involvement by Lightstone to contradict Strunc’s evidence.
(l) Photographs sent by Lleshi to Baillie’s daughter were from throughout the house, depicting GTA’s workers in various rooms. There is no evidence from or on behalf of Baillie explaining or reconciling the position taken on this motion that cleanup should only have included the area in proximity to where Baillie’s sister was discovered and the apparent knowledge that GTA was doing work throughout the house.
(m) Although the existence of two sets of inconsistent timesheets for the same workers on the same dates is certainly questionable, there is insufficient evidence to make a reasonable or proper inference that the purpose of the second set of timesheets was to defraud Baillie’s insurer, as Baillie alleges, as opposed to GTA’s position that the set with reduced hours was created in giving Baillie a discount given how the Xactimate software works. The evidence is not clear that existence of two sets of timesheets was done as a matter of bad faith.
[68] Baillie argues that the CA is designed to provide an extraordinary remedy to legitimate suppliers of materials and services to construction projects, that the court should not be an accomplice to abuses of the legislation, and that a lien claimant not coming to court with clean hands forfeits any entitlement to benefit from the extraordinary lien remedy: Federated Contractors Inc. v. Ann-Maura Developments Inc., 2010 ONSC 346 (Master) at para. 20. I agree. However, a discharge order should not be made lightly. Pursuant to s. 48 of the CA, discharge is statutorily irrevocable, and the discharged lien cannot be revived. A court must thereby be satisfied that the CA is clearly being used abusively.
[69] There are simply too many factual disputes and inconsistencies in the record before me requiring determination before any abuse is reasonably found. I cannot fairly or justly determine abuse from this record. I turn now to whether GTA’s lien is wilfully exaggerated and, if so, what relief is appropriate.
(c) Is GTA’s lien exaggerated?
[70] Although I agree with GTA that determining the agreed scope of work is necessary for the court to determine the proper value of GTA’s lien, I do not agree that determining the agreed scope of work is a necessary prerequisite to determining if the lien is exaggerated. There is insufficient evidence from both sides on which to fairly determine the agreed scope of work, but there is nevertheless sufficient evidence in the record on which to conclude that GTA’s lien is exaggerated.
[71] Baillie’s position that the lien is wilfully exaggerated is a direct challenge to the valuation of services and materials supplied by GTA. In my view, relief based on that challenge is akin to summary judgment and Baillie must thereby show there is no triable issue regarding the alleged exaggeration. As the moving party, Baillie has the initial evidentiary onus and must put her “best foot forward”. For reasons outlined above, GTA also has a responding evidentiary onus to put its “best foot forward” in response to the bases of alleged exaggeration advanced by Baillie.
(i) GTA’s evidentiary obligations during s. 40 cross-examination
[72] One factor in this motion has been GTA’s erroneous view of its own evidentiary obligations in the cross-examination on its claim for lien. In particular, GTA suggests that Strunc’s cross-examination is not GTA’s final position with respect to evidence supporting its lien. GTA argues that “GTA is not obligated, at this juncture, to produce everything it intends to rely on to substantiate the claim” since “it is far too early in the litigation to impose this obligation on GTA.”
[73] Putting aside any evidentiary onus on GTA in response to this motion, Baillie has conducted an extensive cross-examination on GTA’s lien pursuant to s. 40 of the CA. That section expressly provides that such a cross-examination may proceed on a claim for lien at any time, without an order, regardless of whether an action has been commenced, and that the rules of court pertaining to examinations apply to the cross-examination, with necessary modifications.
[74] GTA incorrectly states in its factum that “[c]ross-examinations for liens are not the same as examinations for discovery”. Cross-examinations on a claim for lien are an examination under oath or affirmation and bind the lien claimant. They are the only examination expressly provided in the CA. Examinations for discovery in a lien action are not contemplated by the CA. While leave for that interlocutory step is often granted, it is also common for an order to be made that any cross-examination on the claim for lien stand as discovery evidence with additional examination limited to issues based on the pleadings not already examined upon.
[75] GTA submits that, if lien claimants are required to produce everything that they intend to rely upon to substantiate the lien claim at the cross-examination stage, then every defendant to a lien claim could successfully defeat a lien at an early stage before litigation ever gets going. That submission completely misunderstands the purpose of s. 40 of the CA and the obligations on a lien claimant when the right to cross-examine is exercised.
[76] During a cross-examination on a claim for lien, an examining party is entitled to full disclosure from the lien claimant regarding all evidence relied upon to substantiate the quantum of the lien, the lienability of claimed services and materials, and timeliness of the lien. There is no distinction between a lien claimant’s disclosure obligation during a s. 40 cross-examination and the disclosure obligation during an examination for discovery, where leave for discoveries has been granted. The only difference between the two examinations is one of scope: questions that are relevant based on the pleadings may not be relevant to the lien and, accordingly, might be properly refused during a s. 40 cross-examination, yet properly asked during an examination for discovery.
[77] I agree with GTA that it is entitled to prove its claim through witnesses, such as employees or subcontractors. However, in response to this motion, GTA has opted not to identify those individuals in its responding materials or what evidence they have. I do not agree with GTA’s position that it has no obligation to produce all supporting documents relevant to the quantum, lienability or timeliness of the lien. Those are producible through a s. 40 cross-examination, particularly where, as here, they have been specifically requested by Baillie by way of undertakings. GTA has confirmed that many seemingly significant records requested by Baillie are no longer in its possession. There is reference to a server crash in the cross-examination transcript and answers to undertakings, but no evidence from GTA regarding the server crash, the circumstances under which it occurred, what documents were lost, and whether they have been recovered or will be recoverable.
[78] On this motion, Baillie relies on that lack of documentary support for GTA’s billings as disclosed from the s. 40 cross-examination. If GTA has other evidence on which it intends to rely to fill those evidentiary gaps or explain how relevant documents may be obtained from non-parties prior to trial, none of that was put before the court in response to Baillie’s motion.
(ii) Increased billing to insurance
[79] Increased amounts billed to Baillie’s insurer without any additional services or materials being supplied do not, in my view, represent lienable value. Rather, on the evidence before me, they appear to be opportunistic. GTA’s position is that the higher invoice amount represents the true value of the services supplied and would have been billed had GTA known Baillie’s insurer would be involved. GTA also argues that the amounts charged to Baillie were intended to be a private customer discount, and that the discount could only be given by reducing the number of hours inputted into GTA’s estimating software.
[80] GTA’s explanation is convenient and unsupported by any contemporaneous documentary evidence. Notably, GTA’s re-issued invoice indicates that the additional $34,714.64 in pre-tax billings is due to “Additional hours based on reviewed time sheets”, but line item charges were also increased. I have my doubts about the veracity of the explanation, but it is Strunc’s sworn evidence on this motion, on which he was not cross-examined.
[81] Regardless, even if it is GTA’s standard business practice to charge full price for insurance-funded projects and a reduced amount for privately-funded projects, I do not accept that the lienable value of services and materials supplied by GTA on this project is somehow greater than what GTA would have charged Baillie (the contacting party) under the contract for those services and materials. The parties to the contract did not change and the evidence before me does not support that Baillie had any knowledge that the amount invoiced to her was a discounted amount, nor does it support any agreement by Baillie to increase the contract price for work already performed.
[82] On the facts of this case, I do not accept GTA’s argument that the value of its lien is properly based not only on the contract, but also on a quantum meruit claim. GTA invoiced Baillie the sum of $124,173.34. GTA’s counsel specifically pointed me to Baillie’s email confirming that she would pay that invoice amount in full. It would be inconsistent with s. 14 of the CA, which limits the value of GTA’s lien by the agreed contract price (as outlined above), to allow GTA to lien for an amount greater than a contract price that it argues had been acknowledged and agreed by Baillie. No convincing argument was advanced by GTA for any legal or other basis to legitimately increase the lienable amount above what had been charged to Baillie.
[83] In my view, it would be inequitable to permit a contractor to bill one amount under a contract, take the position that the price for those services was agreed, then lien for a higher amount on the basis that the billed amount represents a discounted figure, particularly in the absence of any notice of that discount to the customer or any agreement to such a discount. I was directed to no evidence supporting any communication of a discount to Baillie or her agreement to a discount.
[84] It follows from the foregoing that, consistent with s. 14 of the CA, the lienable value of services and materials is limited by the amount that GTA had invoiced Baillie under the contract, which GTA argues was agreed by Baillie, namely $124,173.34. Whether GTA’s claims in contract or tort support entitlement to recover a higher amount on a quantum meruit or some other basis, as well as recover additional non-lienable amounts such as the material handling charges, is a matter for trial.
(iii) Incomplete / unperformed work
[85] Cross-examination on GTA’s claim for lien supports that GTA’s invoice included charges for tearing out baseboards in a bedroom, studio, study, family room, dining room, living room and back entry, but that such work was not completed or was not performed at all. GTA submits that the aggregate billing in relation to these items is $738.68. Baillie has put forward no alternative quantification for the baseboards.
[86] Baillie has challenged the extent of cleaning purportedly performed and invoiced by GTA, relying on photographs in the Building Matters’ report showing thick dust and cobwebs on walls, blinds, and baseboards in rooms that GTA purports to have cleaned. I have doubts about whether the work was completed, but am not convinced that there is no triable issue regarding accruing dust and cobwebs in the time between GTA’s work being completed and the site attendance by Building Matters. Also, no quantification of the extent of exaggeration related to cleaning has been provided.
[87] Aside from the baseboards and cleaning, I was directed to no other specific instances of work invoiced by GTA that was incomplete or not performed, or any related quantification.
(iv) Unsubstantiated labour hours
[88] Baillie has demonstrated numerous discrepancies between the hours reflected in the timesheets and hours recorded in GTA’s invoices. These include billings unsupported by timesheets, hours billed in excess of the hours recorded in timesheets, and unsubstantiated subcontractor hours and billings.
[89] GTA’s only evidence substantiating its labour hour charges are the handwritten timesheets already discussed. Authorship of the timesheets is unclear, although the cross-examination suggests they were prepared by GTA’s accounting department from time records completed by workers. GTA’s answers to undertakings confirm that its workers maintained notepads that are no longer in GTA’s possession and that all timesheets in its possession have been produced. The timesheets are not signed or initialled by the individuals whose time is recorded.
[90] As noted above, two sets of timesheets were maintained by GTA with variant hours for the same workers on the same dates. During Strunc’s cross-examination on GTA’s lien, his evidence was that the second set of timesheets, with reduced hours, were prepared by GTA from the original, higher timesheets in order to give Baillie a discount. Strunc confirmed that he did not create or send the timesheets, but was told by the “management team” that GTA was going to assist Baillie by reducing the hours to “give her a break on the price.” Strunc’s affidavit evidence is that the reduced labour hours formed the basis of the invoice sent to Baillie for $124,173.34.
[91] Discrepancies in the labour hours included in the “reduced” timesheets and the hours invoiced to Baillie in the initial services invoice are summarized by date in a chart prepared by Baillie’s counsel and included in her moving factum. There is an aggregate of 101 hours included in the invoice to Baillie that are not reflected in the correlating “reduced” timesheets. The discrepancy increases to 207.5 hours between the re-issued invoice and the timesheets recording higher hours. It appears that there are at least three dates where the set of timesheets with higher aggregate hours include less hours on the same dates than the “reduced” timesheets, which is inconsistent with Strunc’s evidence that the labour hours in those timesheets were reduced from the other set.
[92] There is no evidence from GTA substantiating the 207.5 hours or the 101 hours. To explain the discrepancy by way of an example, GTA’s responding factum suggests that only 3 hours of time were charged for each of Strunc and Lleshi, implying that additional hours would be properly billable for their time. I was directed to no evidence supporting that either of them performed any additional work that was properly included in the invoice. Strunc expressly admitted during cross-examination that the variance between the 331 labour hours reflected in the “reduced” timesheets and the 432 labour hours included in the initial invoice to Baillie “must have been” a clerical error.
[93] Baillie has also demonstrated that there appears to be over-billing on September 3, 4, 5 and 6, 2020. GTA was asked to provide a list of all employees who worked on the site and provided a list of ten individuals. On those dates, GTA has seemingly billed for 12-14 workers. No explanation has been provided for how hours for more than ten workers could be billed given the answer to undertaking.
[94] Baillie has also pointed to Strunc’s acknowledgment during cross-examination that GTA’s workers took lunch breaks, suggesting that 8-hour day billings for workers includes lunch and other breaks. During the cross-examination, Strunc only appears to have acknowledged that the workers took breaks, not that GTA billed for breaks. However, I was pointed to at least a few examples where the arrival and departure times for workers support that Baillie appears to have been invoiced for breaks.
[95] I am satisfied that GTA appears to have evidentiary issues, in some instances serious issues, in substantiating the labour hours invoiced to Baillie. However, on this motion, Baillie challenges GTA’s lien on the basis that it is wilfully exaggerated. I have already determined that, in order to make that finding, I must determine that there is no triable issue on the specific challenges raised.
[96] I agree that GTA has failed to tender evidence during the cross-examination and in response to this motion substantiating the variances between the hours recorded on timesheets and the hours charged. In my view, though, that is not an end to the matter. Discharging a lien is significant relief. If the exaggeration is de minimus, it would no doubt be inequitable in many cases to discharge a lien on that basis. Accordingly, the extent of exaggeration is a factor that must be considered. Although Baillie has prepared a helpful chart outlining the number of over-billed hours by date, GTA’s invoices disclose different hourly rates for different tasks performed on the same dates. I was directed to nothing in the record to assist me in assessing what rates apply to which over-billed hours. Only two of the billing rates were specifically highlighted by Baillie in her factum. I was also directed to no evidence establishing a minimum billing from which the court might quantify even a minimum exaggeration.
[97] It is conceivable that the court could review the invoices, calculate the labour rates charged, and determine a minimum exaggeration based on the lowest charged rate. However, that is work properly performed by the parties to a proceeding. It not practical for the court to examine in detail the full record, including evidence to which the court was not directed, and for the court to perform extensive mathematical calculations from GTA’s invoice that Baillie has not herself done and presented.
[98] Baillie bears the primary evidentiary onus. Some 1,500 pages of documents were filed on this motion. For that reason, at the outset of the motion hearing, I asked counsel to point me to those aspects of the record that they felt were particularly important to disposition of the motion. I have relied heavily on factum citations and the references provided during oral submissions.
[99] For these reasons, while I am satisfied that labour hours appear to have been over-billed in GTA’s invoice, in my view, Baillie has not met her evidentiary onus to establish the extent of over-billing and, accordingly, the extent of any exaggeration of the lien. There remains a triable issue in that regard.
(v) Unsubstantiated subcontractor hours
[100] During cross-examination on the lien, Strunc confirmed that subcontractors, such as Hammond Contracting, were used to complete some of the work when GTA was “running low on staff.” GTA refused various questions for further information on Hammond Contracting’s scope of work and related documents, stating in one refusal that Baillie was “not entitled to information with respect to the employees or contract employees.” I need not address whether any adverse inference should be drawn from that refusal. On the record before me, there is enough to be satisfied that there is a triable issue regarding exaggeration from unsubstantiated subcontractor billing.
[101] Baillie acknowledges that Strunc’s cross-examination evidence is that GTA’s timesheets include subcontractor hours. I note, for example, that there are timesheets for “Faisal Khalzad” and Strunc confirmed during the cross-examination that “Faisal” was a Hammond Contracting employee. There is evidence that subcontractors were used and that their hours were accounted for in GTA’s timesheets and invoicing. Claimed labour hours thereby appear to include subcontractor hours.
[102] I do not accept Baillie’s argument that GTA’s failure or refusal to produce subcontractor-related documents leads to the conclusion that invoicing related to such work constitutes improper or exaggerated billing. I was directed to nothing in the evidence, including the cross-examination transcript, supporting a determination that subcontractor hours or billings have been improperly or inaccurately billed in GTA’s invoice to Baillie. For example, although referenced in the cross-examination, Hammond Contracting’s invoice was not tendered by Baillie and no argument was made regarding how it fails to correlate to the invoiced amounts.
[103] In my view, Baillie has not met her evidentiary onus. It is not possible to determine that there is no triable issue regarding exaggeration relating to subcontractor work as a separate issue from the labour hours claimed by GTA, which I have already addressed above.
(vi) Over-billing for content removal
[104] I am satisfied that GTA appears to have over-billed for trauma technician and content removal labour charges performed on September 1-6, 2019. However, in my view, there are triable issues regarding the extent of that over-billing. During the cross-examination, Strunc was challenged on the charges given that the house was substantially empty by that time. Strunc indicated that there was content removal work to be performed in the basement, which was “crammed to the top” and that trauma technician hours would also include cleaning work. Strunc’s answers also seem to distinguish between trauma technician cleaning and cleaning billed as a separate line item, tied to a distinction between trauma-related work and hoarding cleanup work.
[105] I question the number of hours invoiced on September 1-6, 2019 for basement content removal and trauma cleaning, but in my view there remains a triable issue regarding whether the work was improperly billed (whether double-billing or otherwise) and the extent of any improper billing. Accordingly, there remains a triable issue on the extent of any exaggeration of the lien in respect of that over-billing.
(vii) Unsubstantiated equipment charges
[106] Baillie argues that GTA’s equipment charges are unsubstantiated by any evidence. GTA has indeed confirmed in an answer to undertaking that it no longer has its equipment logs available. However, I am not satisfied that the lack of logs is sufficient to find that there is no triable issue regarding related charges.
[107] GTA’s position is that its invoicing for equipment is “based on property measurements at standard industry rates that are in the Xactimate program.” Strunc’s affidavit outlines that the speciality equipment used and charged is owned by GTA and that charges for only five days were included, despite the equipment being at the property until September 5, 2019. In my view, it is a triable issue whether GTA was entitled to charge for equipment based on property measurements per “standard industry rates” pursuant to the contract.
(viii) Unsubstantiated disbursements
[108] A disbursement for “Trauma/crime scene waste hauling & disposal” was invoiced to Baillie at $7,007.13, but billed at the higher amount of $21,550.23 on the re-issued invoice. Strunc’s evidence from the cross-examination is that Lleshi directed the reduced fee to be charged to Baillie “to help her out”, but when insurance became involved Strunc was directed to include “the actual cost that we paid for this waste hauling.” Accordingly, based on Strunc’s cross-examination evidence, the “actual cost” to GTA was $16,300 plus HST. The reduced amount of $5,300 plus HST, plus 17% for overhead and profit, was initially invoiced to Baillie. There are also disbursement charges for specific numbers of plastic containers and plastic bags.
[109] I agree with Baillie that there is no evidence substantiating any costs incurred for waste hauling or disposal. GTA’s answers to undertakings related to backup documentation confirm that GTA no longer has any supporting documents related to biohazard waste disposal in its possession. There is no evidence from GTA regarding how it intends to prove its claim for “actual costs” of the biohazard disbursement charges. I am accordingly satisfied there is no genuine issue regarding unsubstantiated biohazard cleanup, hauling and disposal disbursement charges. In my view, they represent exaggerated portions of the lien.
(d) Is the exaggeration willful?
[110] I am satisfied that the extent of exaggeration I have found is wilful. If GTA did not have actual knowledge, then it ought to have known that liening for unperformed work and unsubstantiated “actual costs” would constitute exaggeration of the value of its supply of services. I also view the opportunistic increase in billing when Baillie’s insurer became involved to be another instance of wilful exaggeration of the lienable value of services and materials, regarding which GTA ought to have known given the operation of s. 14 of the CA and the lack of any agreement between GTA and Baillie to increase the amount that GTA had billed.
(e) What relief is appropriate?
[111] Baillie argues that, in the absence of a finding of good faith as contemplated in s. 35(2) of the CA, a wilfully exaggerated lien should be discharged. Essentially, Baillie argues that the new wording of s. 35 of the CA supports that reduction should only occur where good faith has been demonstrated. Baillie argues that GTA has demonstrated bad faith by perfecting its exaggerated lien without responding to the concerns raised by Baillie’s insurer, by refusing to voluntarily reduce its lien when it lacks the evidence to support it, and by knowingly invoicing for incomplete and unperformed work.
[112] I have difficulty reconciling Baillie’s interpretation of the interaction of ss. 35(2) and 47 of the CA with the irrevocability of a discharge order under s. 48 of the CA. Requiring a lien claimant in all cases to demonstrate good faith in registering an exaggerated lien, even if wilfully exaggerated, in order to preserve that lien from discharge is, in my view, disproportionately unfair to lien claimants and contrary to the remedial nature of the CA.
[113] The language of s. 35 is targeted at liability for improper or wilfully exaggerated liens. Section 35(1) provides that a lien claimant is liable to any person suffering damages as a result of preserving a lien when the lien claimant knew or ought to have known its lien was wilfully exaggerated or invalid. In my view, s. 35(2) is not an independent provision and its addition was not intended to add an onus on lien claimants to demonstrate good faith in registering a wilfully exaggerated lien in order to prevent it from being discharged. It arose from the recommendation made in the Reynolds and Vogel report, extracted above, essentially proposing that the court should not only be able to hold a lien claimant liable for damages arising from a wilfully exaggerated lien, such as lien bond premiums and costs, but should also have an express mechanism by which to reduce the value of a wilfully exaggerated lien in advance of trial. In my view, nothing in the language of s. 35(2) suggests that the court should presumptively discharge a lien if the court cannot find the lien claimant acted in good faith.
[114] Whether or not an exaggerated lien was preserved in good faith will turn on the facts of each case. As I have noted above, the nature and extent of exaggeration are factors in the court’s exercise of its discretion to discharge or reduce a lien.
[115] In this case, although I have found that the lien is wilfully exaggerated, at least in part, the record before me does not support a determination that GTA was acting in the absence of good faith when the lien was preserved. Baillie admittedly contracted with GTA to perform at least some of the cleanup and remedial services performed by GTA. There is what appears a genuine dispute regarding the extent of authorized work. GTA did supply services and materials that are arguably lienable. Baillie has made no payments to GTA at all.
[116] Lienability is not at issue on this motion. Although I am satisfied that the value of services and materials supplied is less than the amount claimed, and that GTA may have evidentiary issues in proving its lien, I am not satisfied that GTA’s services were of no value.
[117] In these circumstances, I do not agree with Baillie that a discharge of GTA’s lien is warranted or just. In my view, it would be inconsistent with the CA to deny an entirely unpaid contractor the opportunity to prove entitlement to a lien for amounts regarding which there are triable issues. Baillie’s allegations of bad faith and fraud are more fairly adjudicated on a more fulsome record that will be available at trial.
[118] It is, however, fair and just that the value of GTA’s lien be reduced pursuant to s. 35(2) by the amounts for which I am satisfied there is no triable issue regarding exaggeration. Baillie has tendered no evidence on the value of many of the exaggerated items, nor has any evidence been tendered from which the court could reasonably estimate the value. My determinations on the reduction of GTA’s lien are accordingly based on the evidence filed, and are made without prejudice to Baillie arguing for further reductions in the value of the lien at a later date or at trial.
[119] GTA’s lien shall accordingly be reduced by the amount of $48,041.80, being the amount I have determined to be wilfully exaggerated, calculated as follows:
(a) $39,227.54, representing the difference between the amount of the initial service invoice rendered on Baillie and the lien amount; plus
(b) $738.68, representing the undisputed amount of charges for baseboard removal that GTA acknowledges was not performed; plus
(c) $8,075.58, representing unsubstantiated charges of $806.37 for plastic containers for “trauma/crime scene cleanup”, $262.08 for plastic bags for “hazardous waste cleanup”, and $7,007.13 for “trauma/crime scene waste hauling and disposal”.
Vacating of lien
[120] Subsequent to the motion hearing, but prior to release of these reasons for decision, Baillie moved ex parte for an order pursuant to s. 44 of the CA vacating GTA’s lien upon the posting of security in the amount of $204,251.10, representing $163,400.88 for the lien plus $40,850.22 as security for costs. The motion was granted by Master Wiebe on August 20, 2020. GTA’s lien was vacated in advance of a sale of the property pursuant to an agreement of purchase and sale apparently entered into after the motion hearing, scheduled to close on August 28, 2020.
[121] Based on my decision, GTA’s lien is now over-secured. Had it been possible to release this decision sooner, a lower amount of security would have been required. Given the summary nature of lien proceedings, in my view it is inequitable and unnecessary to force Baillie to the expense of a further motion to reduce security based on this decision. In the circumstances, it is appropriate that the Accountant of the Superior Court of Justice be directed to pay out the excess security that has been posted pursuant to the order of Master Wiebe, and I so order and direct below.
Disposition
[122] For the foregoing reasons, I order as follows:
(a) GTA’s lien is hereby declared to be exaggerated in the amount of $48,041.80 and is hereby reduced from the claimed quantum of $160,400.88 to $112,359.08, without prejudice to Baillie seeking further reductions in the value of the lien at or prior to trial and without prejudice to GTA pursuing recovery for the full amount of its claim in contract or in tort.
(b) The balance of Baillie’s motion is dismissed.
(c) The Accountant of the Superior Court of Justice is hereby directed to pay out to Baillie the sum of $63,802.25 from the security paid into court by Baillie pursuant to the order of Master Wiebe dated August 20, 2020, following which the remaining security shall comprise the sum of $140,448.85, representing $112,359.08 for the lien plus 25% thereon or $28,089.77 as security for costs, plus any accrued interest on the original sum posted pursuant to the order of Master Wiebe.
(d) This order is effective without further formality, but a formal order may be submitted for my review and signing.
Costs
[123] At the conclusion of argument, neither Baillie nor GTA had exchanged costs outlines. I accordingly ordered that they exchange and file their costs outlines by July 24, 2020, which was done.
[124] The parties are encouraged to settle costs of the motion. However, if the parties are unable to resolve costs themselves, then Baillie shall deliver written costs submissions by September 9, 2020. GTA shall deliver responding submissions by September 18, 2020. Baillie shall be entitled to deliver brief reply submissions, if any, by September 24, 2020. Costs submissions shall not exceed four pages for primary submissions and two pages for reply submissions, excluding any offers to settle or case law.
[125] Service of all costs submissions is hereby authorized by email. All costs submissions shall be submitted by email directly to me or my Assistant Trial Coordinator with a scanned copy of proof of service. Hard copies shall not be required. Original proof of service need only be filed if the court so directs.
[126] In the absence of receiving written submissions as directed above, the parties shall be deemed to have agreed on costs.
MASTER TODD ROBINSON
DATE: August 31, 2020