Court File and Parties

COURT FILE NOS.: CV-18-58358, SC-19-4800

MOTION HEARD: 20210318

REASONS RELEASED: 20210914

SUPERIOR COURT OF JUSTICE – ONTARIO

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

BETWEEN:

PRW EXCAVATING CONTRACTORS LIMITED

Plaintiff

• and-

ABDUL NEJM and EVA NEJM

Defendants

BEFORE: ASSOCIATE JUSTICE McGRAW

COUNSEL: R. Hesp -for the Defendants rick@hesplaw.ca

P. Wangler and D. MacLeod -for the Plaintiff, Self-Represented prwconstructs@gmail.com

REASONS RELEASED: September 14, 2021

Reasons For Endorsement

I. Introduction

[1] This is a motion by the Defendants for an order discharging the Plaintiff’s Claim for Lien and vacating its Certificate of Action pursuant to s. 47 of the Construction Lien Act (Ontario), R.S.O. 1990 c. C. 30 (the “Act”).

[2] By Order dated February 21, 2019, Donohue J. referred this action for trial to a Deputy Judge or the Administrative Judge of the St. Catharines Small Claims Court. The Defendants brought this motion on October 2, 2019 near the end of the first day of trial before Deputy Judge Fay Ann Guilbeault of the St. Catharines Small Claims Court. Due to insufficient time, the motion was not heard and the trial was adjourned to be continued at a later date. Before the continuation of the trial could be scheduled, regular court operations were suspended due to the COVID-19 pandemic.

[3] Pursuant to her Supplementary Endorsement dated July 30, 2020, Sheard J., Administrative Judge of the St. Catharines Small Claims Court, directed that this motion proceed before me. Scheduling was further delayed due to the ongoing suspension of regular court operations related to the COVID-19 pandemic and PRW’s request that the motion proceed in person. The Defendants consented to an in-person hearing and during a telephone case conference on November 9, 2020, the motion was scheduled to proceed in person in Hamilton.

[4] In determining this motion, I have considered the affidavits of Peter Wangler, President of the Plaintiff, PRW Excavating Contractors Ltd. (“PRW”) and Diane MacLeod, PRW’s Vice-President, both sworn January 22, 2021; the affidavits of the Defendant Abdul Nejm sworn December 21, 2020 and February 24, 2021 and the affidavit of Brenda Lee Schram, a legal assistant with Defendants’ counsel, sworn December 21, 2020. The Defendants’ affidavits include excerpts from the trial transcript. No cross-examinations were conducted. PRW was self-represented at trial and on this motion.

II. Background

[5] The Defendants are the previous owners of the property located at 377 Read Road in Niagara-on-the-Lake (the “Property”). Mr. Nejm states that during a meeting at the Property in May 2017, he advised Mr. Wangler that he required PRW to remove approximately 240 pussy willow bushes, burn them using old wooden pallets and grade the area so that the Defendants could plant 200 peach trees. Mr. Nejm claims that he advised Mr. Wangler that it was necessary to complete the work before the end of Spring 2018 and that Mr. Wangler confirmed it would be done by the end of December 2017. Mr. Nejm alleges that he and Mr. Wangler verbally agreed that the Defendants would pay $2,500 cash for the work upon completion. There is no written contract, agreement or quote.

[6] In October and November 2017, PRW attended at the Property and removed the bushes with an excavator then graded the area with a bulldozer. Scott Campbell, PRW’s bulldozer operator, testified at trial that he completed the grading work between November 16, 2017 and November 22, 2017. By letter dated April 18, 2019 (sent in compliance with production orders made by Donahue J. in her February 21, 2019 order) PRW’s former counsel, Gary Enskat set out the dates and hours worked. The last date listed is November 27, 2017. He further advised that the timesheets had been destroyed. Ms. MacLeod testified at trial that she shredded the timesheets but does not recall when. PRW removed the excavator from the Property in November 2017 but left the bulldozer there until sometime in May 2018.

[7] Mr. Nejm’s evidence is that PRW did not perform any work after November 2017. Mr. Nejm claims that PRW did not supply any wooden pallets or burn the bushes so he burned them himself in January-February 2018. Mr. Nejm further alleges that PRW did not complete the grading work and left piles of earth which made it impossible to plant peach trees before the end of the planting season in early June 2018.

[8] Mr. Nejm claims that he had 2 telephone conversations with Mr. Wangler in mid-May 2018 during which he requested that PRW return to grade the piles of soil. Mr. Nejm alleges that Mr. Wangler had already removed the bulldozer and requested that Mr. Nejm pay $4,500 before he would bring the bulldozer back to complete the grading work. Mr. Nejm claims that he advised Mr. Wangler that he would pay $2,500 as agreed as soon as the grading work was completed. Mr. Nejm alleges that PRW never returned to complete the grading work and the piles of dirt were still there when the Property was sold on July 30, 2020.

[9] Mr. Wangler’s evidence is that he spoke with Mr. Nejm during the Winter, that Mr. Nejm knew that PRW was returning in the Spring to complete the job and that he would not have left the bulldozer there (which he states is worth $120,000) had this not been the case. Mr. Wangler claims that after the weather warmed up and the earth dried, he attended at the Property 3-4 times “to try and make this man happy”. It is not clear what, if any, work PRW did at the Property when Mr. Wangler attended in 2018.

[10] The Construction Lien registration was signed by Ms. MacLeod. She had the authority to bind PRW but admits that it incorrectly states that she is PRW’s President. The Construction Lien further states that the services were supplied from May 5 to 30, 2018. At trial, Ms. MacLeod testified that this was a mistake:

“Q. All right, okay. So let’s just move a little bit further down where it says, about halfway through the middle of the box under the, under the heading it says “statements”.

A. Yes.

Q. It says, “The time within which services or materials were supplied were from May 5, 2018 to May 30th, 2018.”

A. Yes.

Q. Is that true?

A. I’m not sure because I’m not on the jobsites. I’m in an office.

Q. Okay. Let me understand this. A moment ago you said that the information on the letter from Mr. Enskat at tab 14 that said that the work was done in October and November was true.

A. Hang on, let me find it again. Well that must be another mistake then.

Q. Okay, fair enough.

A. Yeah, that is a mistake.

Q. It’s a mistake.

A. Just like the, just like the president is a mistake. I didn’t read this when I…

Q. No.

A. …signed it. I did not read it word for word.

Q. The print is pretty small, I get that. Okay. So, so that, that should’ve said that the work was done in October, November of 2017, is that correct?

A. Yes.”

[11] However, in her affidavit, Ms. MacLeod states:

“6. After reading my evidence in the transcripts on Oct. 2, 2019 I said that the Nov. hours worked were correct. Had you asked me if both dates were correct I would have said yes. That is the truth. You had me very confused.

7. Never once did I say the work was completed in Nov. knowing full well that we went back in May to try and please Mr. Nejm. That is why the invoice was dated May 30, 2018.”

[12] Mr. Wangler alleges that he confronted Mr. Nejm about payment during the last week of May 2018. He claims that Mr. Nejm advised that he had no intention of paying PRW and would leave the country before he did. This is denied by Mr. Nejm. In his affidavit, Mr. Wangler states that “at that point I took my machine, left the job and put on the lien”. Mr. Wangler’s evidence is that he removed the bulldozer during the last week of May 2018. In his affidavit, Mr. Wangler states: “Our invoices are done once a job is finished. If I had finished in Nov. 2017 I would have had Diane create and mail an invoice.”

[13] The Defendants filed 4 photographs dated May 21, 2018 at 11:43 a.m. as exhibits to Mr. Nejm’s affidavit which they claim shows the areas where the bushes were removed. Piles of dirt are visible in the pictures but PRW’s bulldozer is not. The Defendants submit that this confirms that PRW removed the bulldozer before May 21, 2018. However, Mr. Wangler notes that the pictures do not show the entire Property and suggests that the bulldozer was still there on May 21, 2018 likely parked near the Defendants’ house. The pictures were not in evidence at trial.

[14] PRW issued an invoice dated May 30, 2018 for $16,385 (the “Invoice”). PRW registered the Claim for Lien in the amount of $16,385 on title to the Property on July 13, 2018, commenced this action by Statement of Claim issued on August 21, 2018 and registered the Certificate of Action on the same day. The Defendants say that they first learned about the amount of $16,385 claimed by PRW when they received a letter from Mr. Enskat dated July 16, 2018 enclosing a copy of the Construction Lien and that they did not receive a copy of the Invoice until a settlement conference on June 21, 2019. Mr. Wangler claims that the Invoice is very reasonable given that the total for Mr. Campbell’s time alone is $10,412.50 plus HST.

[15] The Defendants sold the Property to a third party on July 30, 2020.

III. The Law and Analysis

[16] Pursuant to the transition provisions in section 87.3 of the Construction Act, R.S.O. 1990, c. 30, as the work at issue was completed before July 1, 2018, the Act applies to this action and this motion.

[17] Section 14 of the Act states:

(1) A person who supplies services or materials to an improvement for an owner, contractor or subcontractor, has a lien upon the interest of the owner in the premises improved for the price of those services or materials.”

[18] Section 1 of the Act defines “supply of services” as any work done or service performed upon or in respect of an “improvement”, which is defined as any alteration, addition or repair to land.

[19] Section 31 of the Act states:

“(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.

(2) Subject to subsection (4), the lien of a contractor,

(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 forty-five--day period next following the occurrence of the earlier of,

(i) the date on which a copy of the certificate or declaration of the substantial performance of the contract is published as provided in section 32, and

(ii) the date the contract is completed, abandoned or terminated; and

(b) for services or materials supplied to the improvement where there is no certification or declaration of the substantial performance of the contract, or for services or materials supplied to the improvement after the date certified or declared to be the date of substantial performance, expires at the conclusion of the forty-five-day period next following the occurrence of the earlier of,

(i) the date the contract is completed, and

(ii) the date the contract is abandoned.”

[20] Section 34 of the Act states:

“(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;”

[21] Section 47 of the Act provides that:

“(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.”

[22] The Divisional Court has recently held that the correct test on a motion to discharge a lien under s. 47 of the Act is whether there is a triable issue in respect to any of the bases on which discharge of the lien is sought (Maplequest (Vaughan) Developments Inc. v. 2603774 Ontario Inc., 2020 ONSC 4308 at para. 25; R&V Construction Management Inc. v. Baradaran, 2020 ONSC 3111 at para. 46; GTA Restoration v. Baillie, 2020 ONSC 5190 at paras. 42-43). The Defendants are not moving for summary judgment and the parties acknowledge that even if PRW’s lien is discharged that the trial will continue with respect to PRW’s claim against the Defendants in contract.

[23] The Defendants seek the discharge of PRW’s lien on the basis that it was not preserved in a timely manner because it was not registered on title to the Property within 45 days of PRW abandoning the contract. The Defendants submit that, based largely on the pictures, the bulldozer was removed from the Property by May 21, 2018 meaning that PRW abandoned the contract by May 20, 2018 such that PRW would have had to register its Claim for Lien on or before July 4, 2018 for it to have been preserved in a timely manner. Since the Claim for Lien was not registered until July 13, 2018, it was out of time and should be discharged. PRW argues that it completed the contract, issued an invoice on May 30, 2018, and registered its lien on July 13, 2018 within 45 days of completing or alternatively abandoning the job and therefore, in time.

[24] For the reasons that follow, I conclude that there is a triable issue with respect to the timeliness of PRW’s lien claim particularly related to the date of the alleged abandonment.

[25] It is not disputed that PRW is a “contractor” and that there was no certification or declaration of substantial performance. Therefore, pursuant to s. 31(2)(b)(ii) of the Act, in order for PRW’s lien to be preserved in a timely manner, it must have been registered within 45 days of its abandonment of the contract. PRW registered its Claim for Lien on July 13, 2018, therefore, the earliest it could have abandoned the contract and still preserved its lien in a timely manner was May 30, 2018.

[26] In order to constitute abandonment under the Act, a cessation of work must be permanent in the sense that it was not intended to carry the project to completion (RSM Mechanical Incorporated v. 1398796 Ontario Inc., 2013 ONSC 1606 at paras. 61-62; Lake of the Woods Electric (Kenora) Ltd. v. Kenora Prospectors & Miners Ltd., [1996] O.J. No. 1349 at paras. 47-53). Abandonment is a factual determination on the evidence and cessation of work and removal of equipment are two factors to consider (Lake of the Woods at paras. 47-51).

[27] Having reviewed the affidavits and heard the parties’ submissions, I am unable to make the necessary determinations to grant the relief sought by the Defendants. In my view, there are multiple findings of credibility and fact which cannot be made on the record before me and are more properly considered and determined by the trial Judge. The task of reconciling the parties’ evidence has been made more challenging by the fact that there were no cross-examinations on the affidavits including Ms. MacLeod’s in which she purports to correct and/or clarify her evidence at trial. This is in addition to, among other things, the absence of a written agreement, any correspondence between the parties and timesheets, the divergent evidence of the parties and the Defendants’ reliance on the pictures.

[28] Even accepting the Defendants’ submission that PRW abandoned the contract, I cannot determine when the abandonment occurred. I reject the Defendants’ submission that the pictures provide a basis to conclude that there is no triable issue that PRW abandoned the contract on or before May 20, 2018. Numerous questions have been raised about the pictures which must be addressed at trial and in any event, the removal of the bulldozer is only one factor to consider. Further, PRW’s uncontradicted evidence is that it removed the bulldozer and left the job during the last week of May 2018. Assuming this constitutes abandonment, if PRW left the job on May 30 or May 31, 2018, then its lien was registered within 45 days. If the date of abandonment is May 29, 2018 or earlier, then it was registered out of time. Making this determination requires findings of fact and credibility which are not possible on the record before me.

[29] The Defendants submit that PRW did not complete the job and did not argue that PRW completed the contract then failed to register its lien within 45 days of completion. PRW asserts that it completed the contract on May 30 or May 31, 2018 (or that any abandonment was on the same timelines) and registered its lien in time. To the extent to which registration based on completion is or becomes a disputed issue, for the reasons described above, it too requires findings which are not possible on the current record.

III. Disposition and Costs

[30] Order to go dismissing the Defendants’ motion. Given that the trial will be resuming, it is reasonable and appropriate in the circumstances to reserve the costs of this motion to the trial Judge.

Released: September 14, 2021

Associate Justice McGraw