Court File and Parties

COURT FILE NO.: CV-14-499276

DATE: 20210118

ONTARIO

SUPERIOR COURT OF JUSTICE

IN THE MATTER OF the Construction Lien Act, R.S.O. 1990, c. C.30, as amended

BETWEEN:

J-R SONS ROOFING INC.

Plaintiff

– and –

ASHA KUMRA and RAJIV KUMRA

Defendants

COUNSEL:

Domenic Saverino, for the Plaintiff

Ian P. Katchin, for the Defendant, Rajiv Kumra and 2577903 Ontario Inc.

Stuart D. Reddington for the Defendants, Asha Kumra and Rajiv Kumra

HEARD: January 15, 2021

BEFORE: Papageorgiou J.

Reasons for Decision

[1] This is a motion to discharge a construction lien and related certificate of action registered on title to property located at 50 Ridgevalley Crescent, Toronto, Ontario (the “Property”) on the basis that it has not been preserved and/or perfected as required in accordance with the Construction Lien Act, R.S.O. 1990, c. C.20, as amended (the “Act”).

Background

[2] The plaintiff provided roofing services and materials in relation to the Property commencing on September 4, 2013.

[3] On January 13, 2014, the plaintiff registered a Claim for Lien against the Property (the “Lien”) in the amount of $36,532.90 and thereafter issued a Certificate of Action and its Statement of Claim on February 27, 2014. The defendants served their Statement of Defence on April 25, 2014, the plaintiff delivered its Reply on June 25, 2015 and on or about February 25, 2016, the plaintiff set this matter down for trial.

[4] The defendants say that the plaintiff did not comply with the timelines within the Act for the perfection and preservation of Lien, as defined in the Act.

[5] Section 47 of the Act provides that:

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. R.S.O. 1990, c. C.30, s. 47 (1); 2017, c. 24, s. 63.

[6] Motions to discharge liens under section 47 of the Act are analogous to motions for summary judgment brought under Rule 20 of the Rules of Civil Procedure: Maplequest (Vaughan) Developments Inc. v. 2603774 Ontario Inc., 2020 ONSC 4308, at para 25; Diamond Drywall Contracting Inc. v. Ikram, 2016 ONSC 5411.

[7] On such a motions, the Court must determine whether there is a genuine issue requiring a trial. Both parties are required to put their best foot forward and the Court is entitled to assume that they have done so. There will be no be no genuine issue for trial if the motion provides the Judge with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure. The Judge is entitled to weigh the evidence, evaluate credibility and draw any reasonable inferences from the evidence: 2349914 Ontario Inc. o/a Antares Construction Group v. Oleg Mazlov, 2018 ONSC 339, at para 4; GTA Restoration Group Inc. v. Baillie, 2020 ONSC 5190, at paras 45 & 56; G.C. Rentals Enterprises Ltd. v. Advanced Precast Inc., 2014 ONSC 4237, at para 35.

The pleadings

[8] The first problem with the defendants’ position is that the defendants have not specifically pleaded that the Lien was not perfected and preserved in accordance with the Act.

[9] The plaintiff argues that the Court may not grant summary judgment to the defendants in this case because a party cannot rely on a claim or defence if it has not been pleaded: Zang v. Lin, 2020 ONSC 6559, at para 51; GTA General Contractors Ltd. v. 2566213 Ontario Inc., 2019 ONSC 7370; and Gordon Ridgely Architects and Associates v. Glowinsky, 2009 CarswellOnt 853.

[10] In that regard, the plaintiff pleaded in paragraph 6 of the Statement of Claim that it completed the work on November 29, 2013, in paragraph 12 that it was entitled to the Lien, and in paragraph 13 that it registered the Lien on January 13, 2014. While the defendants, in paragraph 1 of the Statement of Defence, baldly deny most allegations in the Statement of Claim (even the pleading in paragraph 13 that the Lien was registered which is not in dispute), there is no specific reference to the plaintiff’s alleged failure to preserve and perfect the Lien within the timelines set out in the Act. The main defence asserted is that there were alleged deficiencies which caused leaks in the defendants’ roof.

[11] The defendants argue that the pleadings, read broadly, are sufficient to have raised the issue of the timeliness of the Lien.

[12] I disagree. The issue of whether the Lien has been properly preserved and perfected is a significant issue which in my view is similar to a limitation period which must be specifically pleaded and it has not.

[13] The pleadings issue does not in any event affect the outcome of this motion because I am dismissing the defendants’ motion because of a conflict in the evidence which I am unable to resolve on this record in the defendants’ favour.

Is the Lien out of time?

[14] At the relevant time, section 34 of the Act required that a claim for lien be registered within 45 days of the date of the completion or abandonment of the work, whichever is earlier, in order to be preserved. Section 36 of the Act required that a plaintiff issue a statement of claim within 90 days of the date of completion or abandonment of the work, whichever is earlier, in order to perfect the lien. (These timelines have since been extended through amendments to the Act, but it is agreed that these extended timelines are not applicable in this case.)

[15] The plaintiff has filed the affidavit of Julio Rodriguez, an officer and director of the plaintiff. Mr. Rodriguez says that he ensured that the plaintiff’s Lien was preserved and perfected within the timelines required by the Act. Mr. Rodrigues says that the plaintiff worked on the Property until November 29, 2013. There is no dispute that in law, if the plaintiff completed the work on November 29, 2013, then the plaintiff has properly perfected and preserved its Lien.

[16] The defendants say that the plaintiff actually completed its work earlier and offers a number of alternate time periods in that regard.

Is the Lien out of time because the work was completed on October 13, 2012?

[17] First, the defendant argues that the plaintiff completed its work on or about October 13, 2013, that any work done after that time was remedial and, in law, cannot be used to extend the time within which to preserve and perfect the Lien: Sub-Terrain Directional Drilling ltd. v. Carnello Civil Construction Limited et al, 2014 ONSC 4877, at para 65; Diamond Drywall Contracting Inc. v. 1291609 Ontario Ltd., 2018 ONSC 4633, at para 2; and Scepter Industries ltd. v. Georgian Custom Renovations Inc., 2018 ONSC 988. These cases essentially hold that one cannot use “minor” repair work or deficiencies in the work supplied as a means to extend the period to file a lien.

[18] Section 2(1) of the Act provides complex rules on how to determine whether a contract has been completed which may be applicable:

Contracts, substantial performance and completion

When contract substantially performed

2 (1) For the purposes of this Act, a contract is substantially performed,

(a) when the improvement to be made under that contract or a substantial part thereof is ready for use or is being used for the purposes intended; and

(b) when the improvement to be made under that contract is capable of completion or, where there is a known defect, correction, at a cost of not more than,

(i) 3 per cent of the first $1,000,000 of the contract price,

(ii) 2 per cent of the next $1,000,000 of the contract price, and

(iii) 1 per cent of the balance of the contract price. R.S.O. 1990, c. C.30, s. 2 (1); 2017, c. 24, s. 4 (1, 2).

When contract deemed completed

(3) For the purposes of this Act, a contract shall be deemed to be completed and services or materials shall be deemed to be last supplied to the improvement when the price of completion, correction of a known defect or last supply is not more than the lesser of,

(a) 1 per cent of the contract price; and

(b) $5,000. R.S.O. 1990, c. C.30, s. 2 (3); 2017, c. 24, s. 4 (5, 6).

Multiple improvements under a contract

(4) If more than one improvement is to be made under a contract and each of the improvements is to lands that are not contiguous, then, if the contract so provides, each improvement is deemed for the purposes of this section to be under a separate contract. 2017, c. 24, s. 4 (7).

[19] The defendants have not addressed section 2 of the Act.

[20] The only evidence offered by the defendants in support of its argument that the plaintiff completed its work on October 13, 2013, and that any additional work done after that date was minor, is an inspection report from David Baughn of Independent Roof Inspection Services dated October 13, 2013 (the “Inspection Report”). The defendants say that they commissioned this report because the interior of the Property suffered water penetration “during the course of the work.” The defendants say that the work done by the plaintiff after October 13, 2013 was “minor” but they do not explain what this remaining work was or why it was “minor”. While the Inspection Report did set out alleged deficiencies that need to be fixed, this report does not state that the plaintiff had substantially completed its work when this report was done or that all remaining work was “minor.” Furthermore, the report lists a considerable amount of work that needed to be done and I am not satisfied based upon this report that the remaining work to be done was “minor.”

[21] Accordingly, in my view, this report, on its face, is not sufficient to persuade me of the defendants’ position that the plaintiff completed its work on October 13, 2013 and that any remaining work was “minor.”

[22] I note as well that there is no affidavit from Mr Baughn. Rather, his report is simply appended to the defendants’ affidavit. If the defendants wish to rely upon this Inspection Report as some kind of expert assessment as to when the work was completed within the meaning of the Act, they have failed to comply with Rule 53.03.

Is the Lien out of time because the work was completed on November 25 or 26 2013?

[23] In the alternative, the defendants rely upon 2 emails in support of alleged completion dates of November 25 or 26, 2013.

[24] On November 22, 2013 Mr. Baughn sent the defendants an email advising that the plaintiff would return on Monday November 25, 2013 to complete the remaining work:

Good afternoon Rajiv

Yesterday was the third day of roofing work. Julio will be coming back on Monday to complete.

Rain today.

You have a new roof hatch now and the work is going well.

[25] First, I note that this email from Mr. Baughn directly contradicts the defendants’ position that the plaintiff substantially completed its work as of October 13, 2013 because in this email Mr. Baughn says that “yesterday” (which would have been November 21, 2013) was the third day of roofing work. It also says that the roofer would be coming back on Monday (November 25, 2013) to complete the work. This email on its face suggests that as of November 22, 2013, the plaintiff’s work had not yet been completed.

[26] Second, just because Mr. Baughn told the defendants that the plaintiff was returning to complete the work on November 25, 2013, it does not mean that that actually happened. Again, there is no affidavit from Mr. Baughn confirming this.

[27] The second email relied upon by the defendants is an email from Mr. Rodriguez to the defendants dated December 17, 2013 where he states:

Hi Dr. Kumra the job has been completed for the past 3 week so when can I go get my pay thank you.

[28] The defendants argue that a strict computation where 3 weeks (21 days) are deducted from December 17, 2013 leads to November 26, 2013, not November 29, 2013. I do not find the defendants’ argument in this regard compelling. In his affidavit, Mr. Rodriguez says that his December 17, 2013 email was a general and loose statement of timing only to express that the plaintiff had not been paid for some time. In my view, this is a reasonable explanation and there is nothing in the email which suggests that that the plaintiff’s reference to 3 weeks was intended to be precise.

The defendants have not put their best foot forward

[29] The defendants also argue that the plaintiff’s position that it worked up until November 29, 2013 is not credible as it has not provided any documentary support (correspondence, time sheets, work logs or other documentary evidence); the defendants say that the plaintiff’s assertion of when it completed the work is a “bald allegation” and that it has not put its best foot forwards..

[30] One could say the same thing about the defendants. The defendants have said that the work was completed on November 25, 2013, but have not provided any corroboration for this apart from a bald statement from the defendants’ affiant and the vague email references set out above.

The timing of when the defendants first raised the timeliness of the Lien

[31] Furthermore, the timing of when the defendants first raised the issue that the Lien is out of time, is problematic.

[32] As noted above, in paragraph 6 of the Statement of Claim the plaintiff pleads that it supplied labour and materials to the Property from September 4, 2013 to November 29, 2013 and also pleaded in paragraphs 12 and 13 that it is entitled to the Lien. Although the Statement of Defence (baldly) denies paragraph 6 in the first paragraph, the Statement of Defence does not plead that the Lien was registered out of time or set out any particulars as to when the defendants say the work was completed by the plaintiff. The Statement of Defence does not plead any alleged completion date let alone October13, 2012, November 25, 2013 or November 26, 2013.

[33] Given that the defendants were represented by counsel, and the fact that their memories would likely have been fresher when they instructed their counsel to prepare the Statement of Defence, if the Lien had truly been registered out of time, I find it somewhat incredulous that the issue was never raised until this motion—more than 7 years since the events in question and approximately 5 years after the defendants filed their Statement of Defence.

[34] Indeed, the defendants have not even indicated why they now remember that November 25, or 26 2013 was the last day when the plaintiff attended at the Property.

[35] In my view it is not credible that the defendants would never have raised this at the relevant time, and that they suddenly many years later had an epiphany, recalling a completion date which invalidates the Lien, which has never been raised before, without any documentary support and without any explanation as to why they now remember this.

[36] In my view, there is a genuine issue as to when the plaintiff completed its work and whether the Lien has been properly preserved and perfected.

[37] I am mindful that there is currently a pending sale of the Property which the defendants say cannot be completed if the Lien and Certificate of Action remain registered on title.

[38] That may be, but that does not give the defendants the right to invalidate the Lien. There are remedies which the defendants can pursue under the Act such as vacating the Lien upon payment into Court pursuant to section 44 of the Act.

Costs

[39] The plaintiff is entitled to its costs as the successful party. Plaintiff’s counsel was called to the Bar in 2001 and says that he spent approximately 15 hours preparing this matter not including today’s appearance. He submits that he incurred costs in the amount of $6,460 which I find reasonable. The defendants’ lawyer says that his fees were approximately $5,000 which is somewhat lower but I nevertheless find the plaintiff’s request fair and reasonable and fix the costs in the amount of $6,460, payable within 14 days of the date of this decision.

Papageorgiou J.

Released: January 18, 2021

ONTARIO

SUPERIOR COURT OF JUSTICE

IN THE MATTER OF the Construction Lien Act, R.S.O. 1990, c. C.30, as amended

BETWEEN:

J-R SONS ROOFING INC.

Plaintiff

– and –

ASHA KUMRA and RAJIV KUMRA

Defendants

REASONS FOR JUDGMENT

Papageorgiou J.

Released: January 18, 2021