H & W Development Corp , 2020 ONSC 8134

NEWMARKET COURT FILE NO.: CV-17-131072-00

DATE: 20201230

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

DOMINUS CONSTRUCTION CORPORATION Plaintiff/Defendant by Counterclaim

– and –

H & W DEVELOPMENT CORP. Defendant/Plaintiff by Counterclaim

COUNSEL:

R. Del Vecchio and P. Guaragna, for the Plaintiff/Defendant by Counterclaim

M. Shell, for the Defendant/Plaintiff by Counterclaim

HEARD: March 6, June 29 and July 2, 2020

REASONS FOR DECISION

CASULLO J.

OVERVIEW

[1] Dominus Construction Corporation (“Dominus), Plaintiff/Defendant by Counterclaim, brings this motion for summary judgment for its share of the costs saving which it states were realized on the construction of the Fontana Residential Condominiums (the “Project”). Dominus estimates its share of cost savings to be in the vicinity of $6 – $7 million.

[2] H&W Development Corp. (“H&W”), Defendant/Plaintiff by Counterclaim, maintains that no costs savings were realized on the Project, and in fact seeks damages approximating $12.5 million by way of a counterclaim against Dominus.

[3] Dominus registered a construction lien on February 22, 2017, which was vacated when H&W posted $7,603,736.33 with the Accountant of the Superior Court of Justice, where it continues to reside.

[4] Prior to this motion being heard, H&W brought its own motion to discharge Dominus’ lien claim. H&W’s motion, originally returnable in April 2019, was heard on October 18, 2019, and dismissed with reasons reported at 2019 ONSC 7235.

[5] On February 3, 2020, at the request of counsel, a case management conference was conducted to discuss the parameters for the upcoming summary judgment motion. I asked that counsel provide a joint summary identifying and explaining quantum issues prior to the motion being heard. I received separate submissions, as counsel were unable to agree on the contents of a joint summary.

[6] Despite best efforts, Dominus’ one-day summary judgment motion has taken a tortuous route to its conclusion. Initially returnable February 27, 2020, weather conditions delayed the hearing to March 6, 2020, when only Dominus’ submissions were completed. H&W’s reply was to be heard on March 26, 2020, and then the advent of COVID-19 suspended all but emergency matters in the Superior Court.

[7] On May 13, 2020, the Chief Justice of Ontario issued an updated Consolidated Notice to the Profession, advising that certain matters could be heard virtually. With the consent of counsel, the hearing recommenced, via conference call, on June 29, 2020. On this date, the Court anticipated hearing H&W’s reply to Dominus’ summary judgment motion. However, prior to the hearing, counsel for H&W sought and obtained leave to serve supplementary materials raising a new issue: a challenge to Dominus’ status as the lien claimant.

[8] On June 29, 2020, after hearing argument from both counsel on the issue, I agreed to allow H&W’s lien claimant challenge. Once again, submissions were not completed, and the matter was back before me on July 2, 2020 for a third full day of submissions. What follows are my reasons.

[9] A roadmap will be of assistance. The first section will provide the necessary background. The second section addresses Dominus’ summary judgment motion. The third section addresses H&W’s supplementary submissions on the proper lien claimant. The fourth section examines H&W’s appeal of my decision to dismiss its motion to discharge the lien; the fifth and final section will provide the parameters for a reference.

BACKGROUND

[10] H&W was the owner and developer of the Project, a residential condominium complex consisting of 692 residential units within four towers. The Project was undertaken in two phases: Phase 1 consisted of the construction of Buildings A and B, as well as the underground garage for all four buildings; Phase 2 comprised the construction of Buildings C and D. Construction began in June 2012 and was completed in December 2017.

[11] CB Ross and Partners, the Project’s cost consultant, recommended to MCAP Financial, financier of the Project, that Dominus be selected as the successful bidder on the construction management contract. This was due in large part to Dominus’ reputation for having a good relationship with the trade contractors needed to take on a project of this size and nature.

[12] On or about May 18, 2012, Dominus entered into an agreement with H&W whereby Dominus agreed to provide construction management services in respect of the Project (the “Contract”).

[13] The Contract is a Canadian Construction Association (CCA) Document No. 5, being a Canadian Standard Construction Management Contract form, executed by Anthony Pignetti on behalf of Dominus, and Fred Wang on behalf of H&W.

[14] The Contract is comprised of four sections:

• Articles of Agreement (A-1 to A-15);

• Appendix “A” Reimbursable Expenses;

• Definitions; and

• General Conditions (GC 1 to GC 17)

[15] Dominus’ fee for its services was comprised of the following:

(a) $3,028,400.00;

(b) A share of any cost savings on a 50/50 percent basis with H&W; and

(c) Any extras.

[16] Article A-5 set out how cost savings were to be determined:

The Owner and the Construction Manager will share in any net savings on a 50% / 50% basis. Net savings shall be determined as the difference between the Projected Workable Budget and the actual total costs (Divisions 1 through to 16, inclusive of the construction contingency).

[17] The Projected Workable Budget (“PWB”) was defined as follows:

The Projected Workable Budget shall be determined based upon the Gross Liveable Area (“GLA”) of Phase 1 and 2 times a unit rate of $175.00 per square foot. The GLA shall include the above grade parking garage. The GLA is currently estimated at 775,797 sqft. The Projected Workable Budget is currently estimated to be $135,764,475.00 based upon a GLA of 775,797 sqft and a unit rate of $175.00 psf.

[18] Pursuant to the Contract, H&W made all of the final decisions. However, H&W appointed Dominus as its agent to act in H&W’s name in accordance with the terms of the Contract. While Dominus could not commit to contracts or bind H&W (except in very circumscribed instances), Dominus was solely responsible for dealing with the trade contractors (Article A-3).

[19] Other salient portions of the Contract include:

(i) The Project means the total construction and related services to be managed under this Contract of which the Work is a part (Definition 7);

(ii) The Work means that portion of the Project performed by a Trade Contractor or by the Construction Manager directly using own forces (Definition 8);

(iii) Dominus will, in accordance with the direction of H&W, arrange for contracts to be entered into between the various trade contractors and H&W (GC 3.1);

(iv) The terms and conditions of all trade contracts, including any amendments thereto, shall be subject to the approval of Dominus (GC 3.2);

(v) H&W shall communicate with the trade contractors solely through Dominus (GC 4.10); and

(vi) On a monthly basis, Dominus shall submit an application for payment to H&W for Reimbursable Expenses (A-6), the Contract Fee (A-5); and for Own Forces Work (A-7).

[20] The Contract provided robust protections in favour of H&W in the event Dominus went bankrupt, or defaulted in providing the required services (GC 6).

[21] Cost savings, if any, were to be invoiced as follows:

• 50% of the net savings accountable at the time shall be payable sixty days after initial occupancy of Buildings A and B; and

• The remaining balance shall be payable six months after the initial occupancy of Buildings C and D.

The Project

[22] Despite the allegations in the counterclaim, it appears that for over four years the parties worked together, if not harmoniously, then at least well enough to complete the Project.

[23] For the duration of the Project, Dominus delivered monthly submittal packages, including invoices for all construction costs (trade contractors and its own management fee), to H&W. Dominus was the point of contact for all trades that supplied to the Project.

[24] The construction phase of the Project was completed in late November or early December 2016. This is evidenced in H&W’s March 6, 2017 letter to Dominus, advising that the post-construction phase had gone beyond the four-month period outlined in the Contract. At that point, Dominus’ construction management services were therefore complete.

[25] According to Dominus’ calculations, the actual total cost for Divisions 1 – 16 was $122,460,981.49, including $2,112,362.93 for ongoing subcontracts it managed, and trades that were not yet completed.

[26] Dominus submitted its first invoice for cost savings on March 9, 2016. The invoice was for $1,243,000, inclusive of HST, based on its calculation of costs savings at that time of $4,400,000 (50% of $4,400,000 = $2,200,000 + HST of $143,000).

[27] In February 2017, Dominus submitted its second cost savings invoice for $6,273,473.55, based on its revised calculation of $13,303,493 (50% of $13,303,493 = $6,651,746.50 - $1,100,000 from previous invoice + HST of $721,727.05).

[28] H&W did not pay either invoice. According to its calculations, the actual total cost for the Project was $135,907,979.17.

[29] A lacuna of approximately $13 million lies at the heart of this dispute. The key to resolution rests on which party’s interpretation of the Contract prevails. If Dominus’ interpretation is correct, cost savings were realized on the Project, although the final number requires adjustment. If H&W’s interpretation is preferred, then not only are there no cost savings to distribute, Dominus owes it money.

SUMMARY JUDGMENT

Issues

[30] The Court is being asked to interpret two integral aspects of the Contract in this summary judgment motion:[^1]

1. What was the Project’s GLA?; and

2. What process did the Contract provide for determining actual total cost (A-15)?

[31] The outcome will guide the determination of the Projected Workable Budget, which will in turn determine whether cost savings were achieved.

Test for Summary Judgment

[32] Rule 20.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provides that a plaintiff may move for summary judgment on all or part of the claim in the statement of claim.

[33] Rule 20.04 mandates that a Court shall grant summary judgment if satisfied that there is no genuine issue for trial.

[34] The Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, provides guidance with respect to summary judgment motions at paras. 49 and 50:

There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.

These principles are interconnected and all speak to whether summary judgment will provide a fair and just adjudication. When a summary judgment motion allows the judge to find the necessary facts and resolve the dispute, proceeding to trial would generally not be proportionate, timely or cost effective. Similarly, a process that does not give a judge confidence in her conclusions can never be the proportionate way to resolve a dispute. It bears reiterating that the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute.

The Court continued, at para. 66:

On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.

[35] In these passages, the Supreme Court of Canada has articulated a road map for judges to follow in summary judgment motions. First, without using the expanded fact-finding powers, a judge is to determine if there is a genuine issue requiring a trial. If there is no genuine issue requiring a trial, summary judgment is granted.

[36] If the judge finds there is a genuine issue requiring a trial, then she must next determine whether the need for a trial can be avoided by using the new powers: to weigh the evidence, evaluate the credibility of a deponent, draw any reasonable inference from the evidence [Rule 20.04(2.1)], and hear oral evidence [Rule 20.04(2.2)].

[37] The motion judge may exercise these powers unless it is in the interest of justice that the powers be exercised at trial. For example, if there are claims against other parties which will move forward to trial, then it may not be in the interest of justice to grant summary judgment against a particular defendant. This will avoid duplicative proceedings or inconsistent findings of fact.

[38] In determining whether there is a genuine issue requiring a trial, the motion judge should consider the evidence submitted by the parties, and may weigh the evidence, evaluate the credibility of a deponent, and draw any reasonable inference from the evidence.

[39] The evidence of import before me included the following:

• Cross-examination transcript of Joseph Cordiano, pursuant to s. 40 of the Construction Lien Act, R.S.O., 1990 c. C.30 (the “Act”), held October 29, 2018;

• Affidavit of Joseph Cordiano sworn April 19, 2020;

• Affidavit of David Wang sworn February 18, 2019;

• Affidavit of David Wang sworn June 20, 2019;

• Cross-examination transcript of David Wang, on his two affidavits, held September 4, 2019; and

• Affidavit of Joe Pendlebury sworn June 13, 2019.

[40] In reading the transcript of the s. 40 cross-examination of Mr. Cordiano, the first word that comes to mind is combative. Counsels’ differing views on the proper scope of a s. 40 cross-examination resulted in 83 refusals. Section 40(4) of the Act provides that the rules of court pertaining to examinations apply to s. 40 cross-examinations. Thus, despite the availability of relief pursuant to the Rules of Civil Procedure (Ontario), it does not appear that H&W brought a refusals motion,[^2] or sought to examine a different agent of Dominus.

[41] Based on the unproductive s. 40 cross-examination, H&W chose not to cross-examine Mr. Cordiano on the affidavit he swore in support of the summary judgment motion. As counsel for H&W phrased it during submissions, he did not want to give Mr. Cordiano the opportunity to “cooper up”, or repair, the holes in his evidence.

[42] H&W takes issue with Mr. Cordiano’s affidavit and asks that portions of it be struck. H&W’s main argument is that Mr. Cordiano swore the affidavit in the first person, without referencing who provided the information, or his belief in the information’s veracity. In H&W’s view, the affidavit runs contrary to evidence given during the s. 40 cross-examination, to the effect that Mr. Cordiano was not operationally involved in the Project.

[43] H&W submitted that Mr. Cordiano also:

• provided statements of fact that were not within his personal knowledge;

• provided statements of fact in the guise of inappropriate argument, going to the heart of the issues at dispute; and

• made statements of fact that contain legal conclusions on issues of law, which paragraphs should be struck or ignored.

[44] I do not find favour in any of these arguments. As Kristjanson J. warned against in R.B. v. E.S. (Litigation Guardian of), 2017 ONSC 7866, at para 3:

In a post-Hryniak world, a party cannot sit back, assert that it will file future evidence, or merely argue that a matter is clearly not suited for summary judgment…the court is entitled to assume that the parties have placed before it all of the evidence that will be available for trial; the responding party must present its best case or risk losing.

[45] H&W states it did not have to cross-examine Mr. Cordiano before seeking to strike his affidavit, relying on Kiteley J’s finding in Ledore that “it is not an answer to a challenged paragraph to assert that the opposing counsel could have cross-examined”: Ledore Investments Ltd. v. Murray, 2001 CarswellOnt 623, at para. 25.

[46] There certainly may be instances where cross-examination is not necessary before seeking to have portions of an affidavit struck. For example, as in Ledore, where information was incorrectly contained in an affidavit, cross-examination was not necessary.

[47] However, unlike the affiant in Ledore, an articling student with no personal knowledge of the contents of the affidavit, Mr. Cordiano was the president of Dominus at the time the Contract was entered into. Who better to provide information? As president, Mr. Cordiano would reasonably be expected to have personal knowledge of the Project, and the information was not incorrectly contained in his affidavit. Any issues H&W had with portions of Mr. Cordiano’s affidavit should have been raised during cross-examination.

[48] A party who fails to cross-examine on an affidavit will have to live with the consequences of its strategic choice: Mazza v. Ornge Corporate Services Inc., 2015 ONSC 7785, at para. 50, quoting from ThyssenKrup Elevator Canada Ltd. v. Amos, 2014 ONSC 3910.

[49] Mr. Cordiano’s evidence stands unchallenged, and I am entitled to rely on the information contained therein. For the reasons that follow, I find there is no genuine issue requiring a trial, and Dominus’ motion for summary judgment is granted.

Issue 1 – What is the Gross Liveable Area (“GLA”)?

[50] The Contract does not define GLA; it is referenced in the definition of PWB, reproduced below for ease of reference:

Projected Workable Budget: The Projected Workable Budget shall be determined based upon the Gross Liveable Area (“GLA”) of Phase 1 and 2 times a unit rate of $175.00 per square foot. The GLA shall include the above grade parking garage. The GLA is currently estimated at 775,797 sqft. The Projected Workable Budget is currently estimated to be $135,764,475 based upon a GLA of 775,979 sqft and a unit rate of $175 psf.

[51] Dominus contends that the appropriate figure for the GLA is as set out in the Contract: 775,797 square feet. This is so because the parties agreed to adopt an estimated number for the Contract, which in turn was used to calculate the PWB. Further, the Contract does not provide a methodology for revising the number of square feet.

[52] H&W submits that the very inclusion of the word “estimate” in the definition of PWB, twice, logically means the parties anticipated this figure would ultimately be revised.

[53] When the Contract was entered into in 2012, it was impossible to know the final GLA. The estimate of 775,977 square feet was taken from CB Ross’ 2011 Project Budget, and was based on 50 percent of the Project drawings.

[54] The GLA can only mean the GLA of the completed Project. This was calculated to be 768,248 square feet by Mr. Pendlebury, a quantity surveyor retained by H&W, based on the as-built drawings.

[55] Accordingly, I find that the Projected Workable Budget was $134,443,400 ($175 per square foot x 768,248), not $135,754,475.

Issue 2 – How is Actual Total Cost to be Determined?

[56] Actual total cost is not defined in the Contract. Article A-15 provides that the actual total cost is comprised of Divisions 1 – 16, inclusive of the construction contingency.

[57] Throughout the Project, Dominus delivered monthly invoice packages to H&W which contained the construction costs incurred on the Project, as tracked by Dominus. These submittals were eventually consolidated in Dominus’ master invoice log for the period ending April 19, 2017.

[58] Recall that pursuant to GC 3, Dominus was solely in charge of the trade contractors, arranging the contracts between those entities and H&W. Dominus maintains this was necessary to ensure it was able to track those construction costs under its management umbrella.

[59] According to Dominus, a number of the construction invoices H&W seeks to include in the cost savings calculation are for work that was not carried out in accordance with the Contract. In other words, they are invoices for work that Dominus was either unaware of, or was excluded from negotiating in respect of, or which occurred after March 17, 2017, once Dominus was off-site. In Dominus’ view, H&W is trying to increase construction costs and thereby eliminate, or significantly reduce, cost savings.

[60] One example Dominus gave is the $4.2 million in labour costs H&W paid to Stonegrid Limited, without the approval or consent of Dominus. Stonegrid is a sister company of H&W. Dominus claims it has yet to see an invoice from Stonegrid in support of this significant expenditure.

[61] H&W submits that Dominus is trying to “read into” the Contract the notion that only trades managed by Dominus are to be included in actual total cost.

[62] Both parties made submissions on contractual interpretation. Each agreed that the overriding concern when interpreting contracts is to determine the intent of the parties and the scope of their understanding. To do so, the court must read the contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of contract formation: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, at para. 47.

[63] When interpreting a contract, the Court should first look to the language used to express the parties’ intention. If the language is not ambiguous, then the interpretive process ends. No extrinsic evidence is admissible to interpret the clear terms of a contract: Forest Hill Real Estate Inc. v. Harvey Kalles Real Estate Ltd., 2010 ONCA 884, at para 10.

[64] H&W submits that because Dominus drafted the Contract, contra proferentum applies, and any ambiguities should be resolved in H&W’s favour. The Supreme Court of Canada explained the principle of contra proferentum as follows:

If there is any doubt as to the meaning and scope of the excluding or limited term, the ambiguity will be resolved against the party who has inserted it and who is now relying on it. As he seeks to protect himself against liability to which he would otherwise be subject, it is for him to prove that his words clearly and aptly describe the contingency that has in fact arisen.

Consolidated-Bathurst v. Mutual Boiler, 1979 CanLII 10 (SCC), [1980] 1 SCR 888, at para. 25

[65] According to Dominus, the Contract was negotiated between the parties. Given that contra proferentum applies only to contracts of adherence, the principle does not apply in this particular case. In support, Dominus relies on the reasons of Newbould J. in Nova Growth Corp:

The plaintiffs argue that there is evidence that the documents relied on by the defendants were drafted by their lawyers and that the contra proferentum rule is applicable to them regarding any ambiguity in the language. I am not sure at all about the evidence as to who drafted them, but in any event I do not think the contra proferentum rule has any application. These documents were not contracts of adhesion and it is well established that the contra proferentum rule has no application where a contract was negotiated between sophisticated parties with an ability to modify the wording, as certainly was the case here.

Nova Growth Corp. v. Kepinski, 2014 ONSC 2763, at para. 65

[66] I find that the Contract was a negotiated one, despite the use of a standard form CCA document. For example, in its initial proposal to H&W, Dominus sought a construction management fee of 2.5 percent of the construction budget. Given that the Contract contains a cost savings provision in place of a percentage fee, common sense dictates that this issue was negotiated.

[67] I need make no definitive determination as to whether contra proferentum applies only to contracts of adhesion. In this case, the words are clear and unambiguous, and can only be interpreted one way.

[68] The Project is defined in the Contract to mean the total construction and related services to be managed under this Contract of which the Work is a part (emphasis added). Work is defined as that portion of the Project performed by a trade contractor or by the construction manager’s own forces. These meanings are easy to understand. The only construction and related services managed under the Project are the construction and related services managed and controlled by Dominus. I agree with Dominus’ submission that to include the construction services managed by H&W in the actual total cost would render the cost savings provision meaningless to Dominus.

[69] Mr. David Wang, on behalf of H&W, conceded that the cost savings provision was clear, although perhaps not in H&W’s best interests:

Q. 57 And what types of discussions did you [and Fred Wang] have about the cost savings provision at that time?

A. 57 Basically how it was calculated. We were wondering how it was calculated so that’s been our question since. And to my point before, it wasn’t the best incentive to put into a contract.

Q. 58 Sir, what do you mean by that?

A. 58 Not a good incentive that worked in both parties’ favour.

Q. 60 …I don’t understand why you don’t think it was a good incentive.

A. 60 Well, the way it’s structured it doesn’t really make sense and it doesn’t seem fair that not all the costs are accounted for before there is a savings calculation being made.

Transcript of the cross-examination of David Wang, pages 16-17.

[70] Counsel for Dominus argued that these were two sophisticated commercial entities. When I enquired as to whether Dominus and H&W had independent legal advice during negotiations, counsel for H&W reminded the Court that the evidence did not speak to either party’s sophistication, or whether they received legal advice. Counsel’s point was well-taken.

[71] In light of this, I echo Justice J. Brown’s conclusion on this very same point in OHL Construction Canada:

I am also satisfied that both parties are sophisticated, knowledgeable corporate entities. They entered into their commercial arrangement freely and should not be permitted to resile from that arrangement now, four years after the contract was concluded. Even if this was a contract of adhesion that OHL had little to no part in negotiating, it strains credulity to think that OHL would have entered into so monumental a contract without the benefit of independent legal advice. There is no evidence before me on that point, but I find as a matter of fact that both parties are sophisticated and should be held to the terms of their agreement.

OHL Construction Canada v. Toronto Transit Commission, 2015 ONSC 2712, at para. 30.

[72] H&W cannot rewrite its obligations under the Contract because Dominus, by virtue of ensuring the cost of construction remained under the PWB, is entitled to its share of the cost savings. If H&W believed the cost savings provision was unfair, the time to address this was during negotiations.

[73] Accordingly, the Contract bears the interpretation sought by Dominus. Only those construction costs managed by Dominus are to be included in the actual total cost. While this figure requires further calculation before being finalized, based on the material I posit the number lies somewhere between $122 million and $130 million.

THE PROPER LIEN CLAIMAINT

[74] The next issue to be determined is whether Dominus, or Dominus Construction (2005) Corp. (“Dominus 2005”), is the proper lien claimant.

[75] A brief outline of how this issue came before the Court is necessary. H&W’s motion to dismiss the lien was heard in October 2019, during which H&W focussed exclusively on whether cost savings were a lienable entity. No alternative argument was made. As noted at the outset, I found that cost savings were lienable, and dismissed H&W’s motion to discharge the lien.

[76] It goes without saying that if a motion to discharge a lien is dismissed, the lien claimant still has to prove its lien at trial: 570 South Service Road Inc. v. Lawrence-Paine & Associates Ltd., 2011 ONSC 3410, 2011 CarswellOnt 5996, at para. 13.

[77] Had Dominus’ submissions on summary judgment not taken the better part of the day, H&W would have made its responding submissions on March 6, 2020. Because it was not reached, H&W was scheduled to be heard March 26, 2020 (ultimately rescheduled to June 29, 2020 given COVID).

[78] What I am trying to emphasize is that H&W’s argument in respect of the proper lien claimant was neither raised, nor alluded to, at any time prior to its request to file supplementary material in May 2020. On June 29, 2020, counsel for H&W submitted it was always his client’s intention to argue that Dominus 2005, and not Dominus, was the proper lien claimant. Its supplementary materials were provided only to flesh out the argument.

[79] With respect, this is not borne out by the evidence. It is true that paragraph 30 of H&W’s statement of defence and counterclaim denies that Dominus was ever entitled to a lien. However, counsel for both parties confirmed this is a standard, boiler-plate clause used in construction lien litigation. The clause does not assist H&W, as it gives no indication of a “wrong lien claimant” argument, nor does it lay any groundwork for challenging Dominus’ status as the proper lien claimant.

[80] Further support for my conclusion in this regard can be found in the cross-examination of Mr. Cordiano. Section 40 of the Act allows for a cross-examination that tests “the issues of timeliness, lienability, and quantum”: Duncan Glaholt, Conduct of a Lien Action 2018, 12th ed. (Toronto: Carswell, 2017), at p. 128. Counsel for H&W tried to ask about Dominus 2005 (questions 79, 86, 88, 89, 90, 91, 92), but all were refused. When counsel for Dominus (not Mr. Del Vecchio or Mr. Guaragna) was asked why he refused all questions in respect of Dominus 2005, he replied that Dominus 2005 was not the lien claimant.

[81] This was counsel’s opening to explore the issue of the proper lien claimant further. If counsel for Dominus continued to register refusals, a refusals motion to permit questions on this basis should have been brought. I find as a fact that Mr. Cordiano was questioned as if Dominus was the proper lien claimant.

[82] Consequently, H&W is barred from raising this issue at this late stage of these proceedings.

[83] In the event I am wrong, for the following reasons I am satisfied Dominus was the contractor which provided the services to the Project. Dominus has made out its lien claim.

[84] First, there were a number of entities in the Dominus constellation of companies, including Dominus Management Group (the entity that submitted the 2011 proposal to H&W), Dominus Construction Corporation (the entity which entered into the Contract and carried out the construction services), Dominus Construction (2005) Corp. (the entity that invoiced H&W), and Dominus Construction Group.

[85] According to Mr. Cordiano, these four company names were used interchangeably, and for all intents and purposes, Dominus and Dominus 2005 were one and the same, and Dominus 2005 inadvertently rendered the invoices. He also confirmed it was Dominus that supplied the work.

[86] Second, Dominus 2005 is not referenced in any documents connected to the Project. Dominus entered into the Contract. The cost consultant advised the lender that Dominus was the contractor. And Dominus was registered as the constructor in respect of all Ministry of Labour requirements.

[87] Third, H&W counterclaimed against Dominus. If Dominus’ lien claim fails because it is not the proper registrant, then H&W’s significant counterclaim fails as well. See for example Bayan Construction Ltd. v. Cusimano, 2008 CanLII 17124, at para. 20.

[88] Finally, Mr. Wang confirmed, during his cross-examination, that Dominus was the construction manager. Mr. Wang did not reference Dominus 2005.

H&W’S APPEAL

[89] During submissions on June 29, 2020, H&W asked that I revisit my earlier decision, and find that cost savings are not a lienable entity. When I questioned the propriety of this, H&W advised that because I am sitting in the position of a trial judge on the summary judgment motion, I can consider afresh the validity of the lien.

[90] I am not prepared to reconsider my decision. Even if I were so inclined, I do not have the jurisdiction to do so. H&W may appeal my Order in the proper course, although pursuant to s. 71(3) of the Act, leave of the Divisional Court is required.

REFERENCE

[91] Based on each party’s review of Dominus’ master invoice log, they have agreed that construction costs of at least $120,021,367.78 were incurred. Documents exchanged during the course of litigation have allowed some additional reconciliation to occur.

[92] The parties require further assistance in categorizing the contested invoices. For each invoice, a determination must be made as to whether it is included in construction costs, or excluded.

[93] This assistance will come in the form of a r. 54.04 reference,[^3] which the parties have consented to. What remains to be determined is the appropriate referee, and the form of the Order directing the reference.

[94] With respect to the referee, I would suggest an accountant or mediator versed in construction law, or a Certified Specialist in Construction Law.

[95] With respect to the Order, counsel are encouraged to agree to the nature and subject matter of the reference, and draft an Order in accordance with these agreed-upon terms. The draft Order should be sent to my attention by way of my Judicial Assistant, Nicole Anderson: nicole.anderson@ontario.ca. If counsel are unable to agree to the terms of the Order, or if there are any matters that I have failed to address, counsel may make additional written submissions.

COSTS

[96] Costs are reserved. If counsel are unable to agree on the issue of costs, I shall receive written submissions by February 19, 2021, to my attention by way of filing same with the Barrie filing office at Barrie.SCJ.courts@ontario.ca with a copy to my Judicial Assistant, Nicole Anderson: nicole.anderson@ontario.ca after which I will determine costs based on the materials filed.

CASULLO, J.

Date: December 30, 2020

[^1]: A third issue, whether Dominus’ construction management fee should be included in the Actual Total Cost (H&W’s position) or excluded (Dominus’ position), was withdrawn by H&W during Dominus’ March 6, 2020 submissions.

[^2]: Counsel understood that this was available as a remedy, given his statement (after the thirtieth refusal) that: “a master will tell us who’s right and who’s wrong”: page 24 of s. 40 cross-examination transcript.

[^3]: While a reference is also available under s. 58 of the Act, a motion has not been made in this regard.