COURT FILE NO.: CV-19-620887
DATE: May 31, 2021
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Ontario Construction Industries Inc. v. Festival Hall Developments Limited, MCI Toronto Operations Corp., MCI Toronto Operations Corp. cob as Zebu Steak + Bar, Zebu Steak + Bar Inc., Zebu Steak + Bar Inc. cob. Zebu Steak + Bar Inc. and Zebu Steak + Bar;
BEFORE: MASTER C. WIEBE
COUNSEL: Andrew Ruzza for Ontario Construction Industries Inc.;
Paul Conrod for Festival Hall Developments Limited;
DECISION: May 31, 2021.
ENDORSEMENT
[1] At the first trial management conference on April 27, 2021 I granted Ontario Construction Industries Inc. (“OCI”) leave to bring a motion for default judgment granting it default judgment on its breach of contract claim as against MCI Toronto Operations Corp. and MCI Toronto Operations Corp. cob as Zebu Steak + Bar (together “the MCI Defendants”) and Zebu Steak + Bar Inc., Zebu Steak + Bar Inc. cob. Zebu Steak + Bar Inc. and Zebu Steak + Bar (together “the Zebu Defendants”) in the amount of its claim, $116,382.46. It is undisputed that the OCI claim for lien is gone as the lease was terminated.
[2] The default judgment motion was heard by me by Zoom videoconference on May 31, 2021. By this time, Mr. Ruzza had uploaded the motion record for the OCI motion for default judgment. On May 31, 2021 I discussed first whether the MCI and Zebu Defendants had indeed been noted in default. Mr. Ruzza filed the requisition for noting in default that had been endorsed by the court on May 5, 2021 confirming that the MCI and Zebu Defendants had indeed been noted in default. Therefore, these defendants are deemed to admit the allegations of fact in the Statement of Claim by operation of Construction Act, R.S.O.1990, c. C.30 (“CA”) section 54(4).
[3] The motion record contains the affidavit of Edgar Tomas, the principal of OCI. In his affidavit, Mr. Tomas goes into detail as to the history of this claim. The statement of claim alleges that OCI contracted with both the MCI and Zebu Defendants, which fact is now deemed admitted. The motion record also corroborates this deemed admission. While OCI initially quoted to Michael Colangelo on behalf of the Zebu Defendants, on January 3, 2018 and June 29, 2018, Mr. Colangelo emailed Mr. Tomas on September 19, 2018 advising him to bill “MCI Toronto Operations Corp.” Mr. Tomas also advised that MCI Toronto Operations Corp. was the tenant before the lease were terminated.
[4] Concerning the quantum of the claim, there was considerable corroboration. The initial OCI quotations of January 3 and June 29, 2018 concerned several items of work (ie. millwork, doors and woodwork) for the construction of the large 5,000 square foot restaurant being build in the subject location. Mr. Tomas’ affidavit contains the four invoices OCI rendered to the MCI and Zebu Defendants for the work OCI did. The invoices are dated October 3, 2018, November 22, 2018, January 15, 2019 and January 31, 2019. The affidavit contains the history of payment which shows that the first invoice was paid in full, but that the latter three invoices were only paid in part, leaving a balance of $116,382.46, namely the amount of the claim.
[5] Mr. Tomas was frank in disclosing the history of correspondence OCI had with Mr. Colangelo. It is clear from this evidence that Mr. Colangelao did not dispute the reasonableness of these invoices. His problem obviously was the lack of ability to pay by the MCI and Zebu Defendants. Initially, he said they had sufficient debt financing, which apparently was not the case. Then he said they had sufficient equity financing, which again apparently was not the case.
[6] Given this evidence, I have no difficulty granting entitlement to a default judgment to OCI in the amount of $116,382.46 as against the MCI and Zebu Defendants. I do so. However, as I made clear to Mr. Ruzza, given the decision of Justice Corbett in Prasher Steel Ltd. v. Maystar General Contractors Ltd., 2020 ONSC 6598 (Div. Ct.), I will not sign a judgment in this motion. In Prahser, Justice Corbett required on a motion for judgment to enforce a settlement under Rule 49.09 that I issue a report instead to be consistent with the requirement of the governing judgment of reference that I issue a report concerning my findings. The OCI motion before me now also takes place within a reference and requires that I make findings and conclusions about the evidence concerning this case. Therefore, despite the wording of CA section 54(4), I believe I must write and deliver a report to be consistent with the Prahser decision. I will do so.
[7] I asked as to whether OCI is claiming interest, and he said it was not. Therefore, I make no ruling as to interest.
[8] Finally, there is the question of costs. Mr. Ruzza filed a Bill of Costs which showed the amount of $7,126.62 in substantial indemnity costs. A large part of this claim, $2,194.17, concerns disbursements. I have reviewed the disbursements and do not find them unreasonable for the work that was done. A large number of the disbursements were filing fees. Concerning the claim for lawyer time, I do not find those amounts unreasonable. Mr. Ruzza’s substantial indemnity hourly rate, $225, is quite reasonable. The work shown was necessary, namely the motions to move this case forward through pleading to a judgment of reference, an order for trial, the first trial management conference and finally this motion. That there should be a substantial indemnity costs award is clear since the evidence shows that Mr. Colangelo in essence “strung OCI along” with stories about ability to pay and imminence of payment that were not born out.
[9] I award OCI $7,000 in substantial indemnity costs to be paid by the MCI and Zebu Defendants.
DATE: May 31, 2021 __________________________
MASTER C. WIEBE