COURT FILE NO.: CV-20-639583
DATE: January 20, 2021
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Diamond Drywall Contracting Inc. v. Elderberry Enterprises Ltd., Leora Herzig, Phillip Faber and Freecliff Investments Ltd.;
BEFORE: MASTER C. WIEBE
COUNSEL: Alexander Hora for the defendants; Roger A. Gosbee for the plaintiff;
HEARD: January 18, 2021.
REASONS FOR DECISION
[1] The defendants brought a motion on January 18, 2021 seeking a declaration that the plaintiff’s claim for lien has expired and an order that it be vacated. The grounds for the motion are the allegations that the plaintiff’s claim for lien was not preserved in time and that the plaintiff has failed to serve its statement of claim for the last nine months, namely well beyond the 90 days specified by the Construction Act, R.S.0. 1990, c. C.30 (“CA”), and has not brought a motion to extend the time for service.
[2] Concerning the issue of lien expiration, there is no dispute that the plaintiff was a “contractor.” That means that the plaintiff’s lien period started to run from the date the was “completed, abandoned or terminated.” There is also no dispute that the new provision of the CA apply, which means that the period for the plaintiff, a contractor, to preserve its lien was 60 days from completion, abandonment or termination.
[3] The defendants allege that the contract in issue was terminated on November 1, 2019. The filed evidence is equivocal on that point. There is an email from the owner to the plaintiff on that day stating the following: “given your silence over the last two weeks, I have already begun to make other arrangements.” This is not a clear statement of contract termination. In fact, the filed evidence indicates more strongly that the contract was terminated on November 12, 2019. This is when there was an email exchange between the plaintiff and the owner. The plaintiff wanted access to the site. Obviously, the plaintiff did not consider the contract at an end. The owner responded clearly denying access stating that, “I’ve moved on, so should you.” The owner told the plaintiff not to bother coming. The 60-day lien period running from November 12, 2019 means that the plaintiff’s claim for lien was registered in time. Therefore, I was not prepared to grant the motion on this ground.
[4] Concerning the service issue, Mr. Gosbee openly and honestly admitted that he failed to serve the statement of claim for a period of six months, namely as late as November, 2020. He could not explain this failure other than as an oversight on his part, the plaintiff’s lawyer. He attributed some of that oversight to the COVID-19 pandemic and the stresses it caused to his practice. He said that after November, 2020 the problem was getting instructions from his client, the principal of which is Alex Seferovic. I had Mr. Gosbee call Mr. Seferovic, who stated that he did not correspond with Mr. Gosbee because of a family settlement concerning his business, moving and the stresses to his business caused by the pandemic. Mr. Seferovic confirmed that he wants this action to continue and instructed Mr. Gosbee to move forthwith for an order extending the time for service of the statement of claim.
[5] Mr. Hora referred me to the decision of Master Albert in MGI Construction Corp. v. 2273865 Ontario Inc., 2015 CarswellOnt 11221 (Master). In this case, there was a very late service of the statement of claim in a construction lien action and the lien claimant brought a motion for an extension order. The service happened some 18 months after the statement of claim was issued and 16 months after the end of the 90-day service period. Master Albert outlined factors to be considered in paragraph 12: the length of the delay and the passage of a limitation period; the explanation for the delay in service and in bringing the motion for the extension; and prejudice to the defendant in the late service. She focused on the explanation and the prejudice. The explanation for the delay in service was an alleged breakdown in communication between the lawyer and the lien claimant. Master Albert did not accept this explanation as the lawyer remained on the record and should have taken steps to serve. Concerning prejudice, she found that the registration of the claim for lien itself was a prejudice to the defendant that was relevant. She denied the motion and declared the lien expired.
[6] Applying these factors to the case before me, I became reluctant to grant the motion at that time based on the evidence presented. This motion took place only five months after the end of the service period as arguably extended by the four-week provincial suspension of limitation periods in March, 2020. While there is no evidence from the plaintiff, the statements of Messrs. Gosbee and Seferovic made me concerned about the impact of the COVID-19 pandemic on the service process in this case. The court takes judicial notice of the general interruption the pandemic has had on businesses and law firms. There were the two state of emergency orders. There were several provincial stay-at-home directives. Given the statements by Messrs. Gosbee and Seferovic that the plaintiff fully intends to move this case forward, I decided that I needed more evidence to rule on this motion.
[7] Therefore, I made the following orders:
a) The defendants’ motion is adjourned to be heard on February 8, 2021 at 2:30 p.m.;
b) There will be a plaintiff’s motion for an order extending the time for service of the statement of claim that will also be heard on February 8, 2021 at 2:30 p.m.;
c) The motion record for the plaintiff’s motion must be served on or before January 21, 2021;
d) The responding motion record in that motion must be served on or before January 26, 2021;
e) The factum and book of authorities of the moving party must be served on or before February 1, 2021;
f) The factum and book of authorities of the responding party must be served on or before February 4, 2021;
g) All motion material must be electronic, must be served electronically and must be uploaded onto Caselines on or before February 8, 2021;
h) The motions will be argued before me by way of Zoom videoconference and for no more than 60 minutes;
i) The costs of both motions will be determined at that time.
[8] These are the reasons for my decision. Please note that there is another motion in another matter presently scheduled to be argued first for 60 minutes on February 8, 2021 at 2:30 p.m. There is a chance that this other motion will be resolved in advance.
DATE: January 20, 2021 __________________________
MASTER C. WIEBE