COURT FILE NO.: CV-20-1972
DATE: 2021/08/05
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Velusina Design and Construction Inc.
Plaintiff
AND
Unit 11 Inc. and The Corporation of the City of Mississauga
Defendants
BEFORE: Bloom, J.
COUNSEL: Christopher Statham, for the Moving Party, Unit 11 Inc.
Derrick Dodgson and Amir Ghoreshi student-at-law, for the Responding Party, Velusina Design and Construction Inc.
Colin Holland, for The Corporation of the City of Mississauga
HEARD: 2021/07/28 by Zoom
E N D O R S E M E N T
I. INTRODUCTION
[1] Unit 11 moves to have a construction lien declared expired for want of its being preserved in a timely manner. The parties agree that the current Construction Act governs the matter. They also agree that to succeed on the motion Unit 11 must demonstrate that there is no genuine issue requiring a trial with respect to the issue of whether the lien was preserved in a timely manner.
II. UNDISPUTED FACTS AND BACKGROUND
[2] The Moving Party, Unit 11, was the general contractor for the Defendant, Mississauga, on a project to build an illuminated sign spelling out the word Malton in a park.
[3] Velusina, the Plaintiff, was a subcontractor to Unit 11. Velusina was to provide the concrete foundation on which the letters were to sit and also to be the electrical subcontractor.
[4] The time period of the relevant events was late 2019 and early 2020.
[5] Velusina gave a copy of the claim for lien to Mississauga on March 2, 2020.
III. GOVERNING PRINCIPLES
[6] The material provisions of the Construction Act are:
Expiry of liens
31 (1) Unless preserved under section 34, the liens arising from the supply of services or materials to an improvement expire as provided in this section. R.S.O. 1990, c. C.30, s. 31 (1); 2017, c. 24, s. 67.
Liens of other persons
(3) Subject to subsection (4), the lien of any other person,
(a) for services or materials supplied to an improvement on or before the date certified or declared to be the date of the substantial performance of the contract, expires at the conclusion of the 60-day period next following the occurrence of the earliest of,
(ii) the date on which the person last supplies services or materials to the improvement,
How lien preserved
34 (1) A lien may be preserved during the supplying of services or materials or at any time before it expires,
(a) where the lien attaches to the premises, by the registration in the proper land registry office of a claim for lien on the title of the premises in accordance with this Part; and
(b) where the lien does not attach to the premises, by giving to the owner a copy of the claim for lien. R.S.O. 1990, c. C.30, s. 34 (1); 2010, c. 16, Sched. 2, s. 2 (5); 2017, c. 24, s. 63, 64, 68, 70, 71.
(2) Repealed: 2017, c. 24, s. 29 (2).
Premises owned by municipality
(3.1) Where the owner of the premises is a municipality, the copy of the claim for lien shall be given to the clerk of the municipality. 2017, c. 24, s. 29 (4).
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. 2017, c. 24, s. 37 (1).
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. 2017, c. 24, s. 37 (1); 2018, c. 17, Sched. 8, s. 15 (1).
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. 2017, c. 24, s. 37 (1).
[7] In applying s. 31(3)(a)(ii) the supply must be a bona fide one which advances the scope of work under the subcontract and not work rectifying defective or improper work under that subcontract. Paragraph 61 of the decision of Master Wiebe in Cos. Shore Inc. v. Unimac-United Management Corp., 2017 ONSC 4813 is authority for that proposition.
[8] In the case at bar, I am asked by the Moving Party to apply s. 47 (1)(b); in so doing my function is akin or analogous to a summary judgment motion to the extent that I must grant the motion only if it is demonstrated to me that there is no genuine issue requiring a trial on the timely preservation of the lien. Authority for that proposition is the decision of Master Sandler in DCL Management v. Zenith Fitness Inc. et al., 2010 ONSC 5915.
IV. ARGUMENTS OF THE PARTIES
A. Arguments of the Moving Party, Unit 11
[9] Unit 11 argues that the last date by which a bona fide supply was made by Velusina was December 22, 2019 and, accordingly, the lien was not preserved in a timely way. Unit 11 argues that the last date by which a bona fide supply would have had to be made to preserve the lien was December 31, 2019 or after, given the service of the copy of the claim on March 2, 2020.
[10] In support of its position Unit 11 relies inter alia on affidavit evidence from Penny Nicholls, its head project manager. She gave evidence that she had been informed that Velusina was to be completing its work by December 21, 2019 and evidence that Velusina delivered on December 30, 2019 final invoices dated December 22, 2019. I have considered this evidence and the other evidence tendered by Unit 11.
B. Arguments of the Responding Party, Velusina
[11] Velusina argues that the last date on which it made a bona fide supply was February 1, 2020, and that, therefore, the lien was preserved by the service of the copy of the claim on March 2, 2020.
[12] Velusina relies inter alia on affidavit evidence from John Konstadinopulos, Unit 11’s project manager for the job, and from Chris Kotevski, the President of Velusina. Their evidence taken together asserts that the subcontract work of Velusina was not completed until February 1, 2020 because of delays for which Unit 11 was responsible. They state that the work completed by Velusina in January and February was electrical, site grading, and radius grinding.
[13] Velusina also submits that I should have regard to the failure of Unit 11 to cross-examine Konstadinopulos and Kotevski.
V. ANALYSIS
[14] I have considered all of the evidence, the arguments of the parties, and the principles set out above. In particular I have regard to s. 31(3)(a)(ii) of the Construction Act.
[15] I am not persuaded by Unit 11 that there is no genuine issue requiring a trial on the issue of the timely preservation of the lien.
[16] The evidence of Konstadinopulos and Kotevski was not the subject of cross-examination. At present it creates a basis for the necessity of a trial on whether there was a bona fide supply within the prescribed time period. Their credibility needs to be tested by cross-examination in the context of the relevant documentation at trial.
[17] With respect to the argument of the Moving Party in relation to the invoices described as final, I have concluded that this evidence needs to be put to Kotevski in cross-examination. It alone does not establish that bona fide supply by Velusina did not take place after December 22, 2019. In this connection I take some comfort from the reasoning of Justice Judson in the following passage from paragraph 95 of Lambton (County) v. Canadian Comstock Co. Ltd., 1959 CanLII 22(SCC):
Counsel for the appellant says that he seeks only to prevent these respondents from asserting in these proceedings a fact contrary to that contained in their own acknowledgments. Then he says time begins to run against them and that this is not the waiver of lien referred to in para. 5(1) of the Act. They still have their lien but they must assert it within a certain time for time begins to run against them from the date of their acknowledgments. This argument does not overcome s. 5(1) of the Act. An acknowledgment from which it is inferred by the other side that time under the Act is running against the claimant when the facts of the case and the Act provide that it is not running, can only have legal effect if it is a waiver of lien under the Act. I would not make any inroad on the principle laid down in Anderson v. Fort William Commercial Chambers Limited[9], that estoppel cannot do what the section says only a signed express agreement can do.
[18] Accordingly, I dismiss the motion before me.
VI. COSTS
[19] Velusina seeks $19,061.29 as a combination of partial and substantial indemnity costs based on Rule 49.
[20] Unit 11 seeks an order for costs in the cause based on the need to determine the costs result at trial.
[21] In my view an order that costs be in the cause is appropriate, because Unit 11 acted reasonably in bringing the motion having regard to the evidence, particularly the invoices to which I have made reference. I, therefore, order that costs of the motion be in the cause.
Bloom, J.
DATE: August 5, 2021
COURT FILE NO.: CV-20-1972
DATE: 2021/08/05
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Velusina Design and Construction Inc., Plaintiff
AND
Unit 11 Inc. and The Corporation of the City of Mississauga, Defendants
BEFORE: Bloom, J.
COUNSEL: Christopher Statham, for the Moving Party, Unit 11 Inc.
Derrick Dodgson and Amir Ghoreshi student-at-law, for the Responding Party, Velusina Design and Construction Inc.
Colin Holland, for The Corporation of the City of Mississauga
ENDORSEMENT
Bloom, J.
DATE: August 5, 2021