COURT FILE NO.: 989/98

DATE: 2021-11-17

ONTARIO SUPERIOR COURT OF JUSTICE

In the Matter of the Construction Lien Act, R.S.O. 1990

B E T W E E N:

1191650 ONTARIO LIMITED, c.o.b. as BIOTECHNIK

• and –

848835 ONTARIO INC.

Fabio Soccol, for the Plaintiff/Lien Claimant/Responding Party

Michael Polvere, for the Defendant/Former Owner/Moving Party

HEARD: January 22, February 2, 2021 and written submissions

The Honourable Justice Catrina D. Braid

REASONS ON MOTION

I. OVERVIEW

[1] 152 Shanley Street, Kitchener is a former industrial site (“the property”). 848835 Ontario Inc. (“Continental”), purchased the property for one dollar, knowing that it had numerous soil and groundwater contaminants. Continental hired 1191650 Ontario Limited (“Biotechnik”), to complete an environmental assessment. Biotechnik was not paid for the work, so it registered a construction lien on the property and sued.

[2] Biotechnik obtained judgment, which granted Biotechnik the right to possess the property and have it sold to recover the judgment. Twenty years after the judgment was obtained, Continental sold the property for $1.4 million.

[3] Continental has brought a motion seeking findings that the lien and judgment are no longer enforceable or have been satisfied. The following issues arise on the motion:

A. Has Biotechnik’s right to enforce the judgment expired?

B. Has the judgment been satisfied?

C. If there is no limitation period, does the equitable doctrine of laches apply?

[4] For the reasons set out below, I make an order directing that the s. 71 notice be removed from title. I also make findings with respect to several issues raised. The motion is otherwise dismissed.

II. FACTS

[5] The plaintiff, Biotechnik, is a corporation that was involved in the remediation of environmentally contaminated properties. Mr. Ralph Palmisano is the general manager, officer, and director of Biotechnik.

[6] The defendant, 848835 Ontario Inc., is a holding company that later changed its name to Continental Imperial Explorations Ltd. I shall refer to the defendant as “Continental”, for ease of reference. Continental exists solely for the purpose of owning the property at 152 Shanley Street. Mr. Andrew Spylo is the sole officer, director, and shareholder of Continental.

[7] Continental hired Biotechnik to complete a scope of work to remediate the environmental contamination at the property. Biotechnik completed the assessment but was not paid. In June 1998, Biotechnik registered a construction lien on the property in the amount of $88,806.26. A short time later, Biotechnik sued and registered a Certificate of Action on title.

[8] On April 28, 1999, Biotechnik obtained a judgment against Continental in the amount of $92,090.87. The judgment also stated the following:

i. The plaintiff is entitled to a valid and binding lien against the property for the total amount of the judgment.

ii. That the interest of the defendant in the property be sold and the purchase monies be applied towards the judgment.

iii. That the defendant deliver possession of the property to the plaintiff.

iv. That the defendant pay costs to the plaintiff of $3,000 for costs of the action.

v. The judgment bears post-judgment interest at a rate of seven percent per year.

[9] Continental was unsuccessful on appeal and was ordered to pay an additional $1,500 in costs to Biotechnik.

[10] In 1999, Mr. Palmisano (Biotechnik’s representative) swore an affidavit in support of a request for a writ of possession, stating that he believed that Continental was earning an income from renting the property to tenants. Mr. Palmisano now says it was not rentable.

[11] On March 31, 2000, Biotechnik obtained a writ of possession for the property, which directed the sheriff to deliver possession of the property to Biotechnik. The writ of possession information sheet stated that Mr. Palmisano and his counsel should be contacted by the sheriff to confirm the eviction date and time, and that possession of the premises was to be given to Biotechnik.

[12] When the writ of possession was issued, the building had been condemned pursuant to an order from the City of Kitchener. Continental states that Biotechnik was in possession of the property for approximately ten years.

[13] On the other hand, Biotechnik denies that it was in exclusive possession of the property at any point, and states that it was abandoned and unoccupied. Biotechnik states that the property was severely contaminated and in poor, dilapidated and unsafe condition. There was no water or hydro service to the property.

[14] Between 2000 and 2008, Biotechnik installed a water supply to facilitate partial treatment of the contamination, hired a consultant to discuss possible remediation, hired an architect to provide a preliminary opinion regarding potential future land use, submitted inquiries with the city to learn about property tax relief, hired a lawyer and a consultant to inquire about financial assistance from the city’s brownfield remediation program, and retained an environmental engineering firm to prepare reports regarding contamination. Biotechnik learned that selling the property would have required the investment of further costs without any guarantee that Biotechnik would recover any funds. They eventually abandoned the property.

[15] Continental states that Biotechnik rented the property to Lasso Construction, and that Biotechnik and/or Lasso Construction stripped the property of assets, including the removal of custom windows, doors, electrical systems, HVAC systems, and other components. Continental claims that the pilfered materials were used by Biotechnik and/or Mr. Kurt Lasso (owner of Lasso Construction) on other building projects. Continental states that Biotechnik and/or Lasso Construction broke the gas line and disconnected utilities, which caused the building to become unstable. Continental further states that Biotechnik and/or Lasso Construction performed demolition on walls and compromised the structure of the building. Mr. Palmisano denies that Biotechnik did any of these things; he states that the building was unstable, and utilities disconnected, before it took possession of the property.

[16] Mr. Spylo states that, between 2000 and 2010, Lasso Construction had control of the property and prevented Continental from accessing the building. Biotechnik does not dispute that Lasso Construction erected signs on the building and used it for the sale and storage of construction materials. Biotechnik also does not dispute that, in the summer of 2012, Mr. Lasso broke into the factory by breaking and destroying the large garage door and took a substantial amount of materials. Police were called and found Mr. Lasso on the property.

[17] On April 17 and 24, 2006, Mr. Spylo wrote to Biotechnik requesting an opportunity to inspect the property as he had an investor who was interested in the land. He stated his understanding that Biotechnik was renting the building to Lasso Construction. He requested an accounting for rent and for items that were being removed from the property, including custom windows. Biotechnik did not respond to these letters. On April 24, 2006, Biotechnik served Mr. Spylo with a notice of examination in aid of execution, but he failed to attend.

[18] A short time later, Biotechnik brought a motion seeking relief arising from Mr. Spylo’s failure to attend the examination. Continental brought a cross-motion seeking an order directing the sheriff to sell the property and for an accounting. He claimed set offs similar to those raised in the current motion.

[19] In 2008, Biotechnik brought a motion for an order vesting the property to Biotechnik, or in the alternative, enforcing judgment including the sale and possession of the property. Continental brought a cross-motion to direct the sheriff or a court-appointed agent to sell the property, for an accounting, granting Continental access to inspect the property, and other relief. Continental hired an expert in industrial leasing, who stated that the property should realize a net lease rate of three dollars per square foot, which would generate $87,000 annually.

[20] Mr. Palmisano swore an affidavit on the motions, denying that Biotechnik was the agent or partner of Lasso Construction. However, he agreed that Biotechnik hired Lasso Construction to do some work at the property. He stated that Biotechnik does not collect any rent from the premises, although he did not specifically deny the allegation that Biotechnik was receiving benefit for Lasso Construction’s use of the property.

[21] When the motions were before the court, an order was made requiring the parties to obtain an appraisal; however, it was never completed. The motions were adjourned sine die returnable on ten days’ notice and were not pursued further.

[22] In 2011, Continental resumed possession of the property. Continental states that a gas line had been disconnected and the property was unstable because of damage. The municipality issued notices to comply, and Continental spent a significant amount of money to remedy the issues.

[23] After 2008, Biotechnik did not take any further steps to enforce the judgment. Its corporate status was inadvertently cancelled in 2011 and was revived in 2019. Although Continental states that Biotechnik is a “zombie” corporation, revived solely to collect the judgment, I do not accept that this impacts the validity of the judgment and do not place any weight on this particular fact.

[24] In early 2019, Continental paid $448,798.43 in property tax arrears. In November 2019, Continental sold the property for $1.4 million. Despite receiving letters from Biotechnik’s lawyer demanding payment, Continental did not pay anything toward the judgment.

[25] In June 2020, Continental brought an ex-parte motion under s. 44 of the Construction Act, R.S.O. 1990, c. C.30, to vacate the lien from title. Continental paid the amount of the lien plus 25 percent into court, for a total of $111,000, and the lien was removed from title.

[26] When Biotechnik learned of the ex-parte order, it registered a notice on title pursuant to s. 71 of the Land Titles Act, R.S.O. 1990, c. L.5, because it believed that insufficient funds were paid into court. Biotechnik argues that charges for post-judgment interest continue to run against the property.

[27] Biotechnik wishes to enforce the judgment against the proceeds obtained from the sale of the property. It claims that the judgment, including post-judgment interest, is now worth more than $234,000.

III. NATURE OF THE MOTION

[28] Continental has brought a motion seeking the following:

i. a declaration that the construction lien and judgment are unenforceable, or alternatively have been satisfied;

ii. an order that the lien claim be discharged;

iii. an order that the certificate of action be discharged;

iv. alternatively, an order deleting the lien and certificate of action from title; and

v. in the further alternative, an order disallowing post-judgment interest.

[29] At the time the motion was filed, the lien was still registered on the property. The lien now binds the monies that have been paid into court.

IV. ANALYSIS

A. Has Biotechnik’s Right to Enforce the Judgment Expired?

[30] Continental argues that the Limitations Act, R.S.O. 1990, c. L.15 (“LA”) applies and bars enforcement of the lien. It submits that the judgment expired because Biotechnik did not start a further originating process within 20 years.

[31] On the other hand, Biotechnik states that the lien judgment is a statutory remedy granted in a construction lien action and therefore is not governed by the LA. It argues that the Construction Lien Act, R.S.O. 1990, c. C.30 (“CLA”) (as it then was, now replaced by the Construction Act, R.S.O. 1990, c. C.30 (“CA”)) is a complete code that crowds out the application of limitations legislation. In the alternative, Biotechnik submits that the transition provisions of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B (“LA2002”) applies, and that there is no limitation period.

[32] I shall address two sub-issues that arise out of these submissions:

i. Does the Limitations Act Apply to a Construction Lien and Lien Judgment?

[33] I accept Biotechnik’s submission that the lien is a statutory remedy and therefore is not governed by the LA. However, I do not accept the same submission with respect to the lien judgment.

[34] The CLA does not specify a limitation period applicable to claims for breach of contract joined with actions to enforce claims for lien. Therefore, there is no conflict between the CLA and the limitations statutes. As such, the limitation period under those limitations statutes apply to contractual claims joined with lien claims, pursuant to s. 19 of the LA2002: see Pryers Construction Ltd v. MVMB Holdings Inc., et al., 2019 ONSC 6135, 96 C.L.R. (4th) 226.

[35] Therefore, the limitations statutes apply to the judgment because the underlying claim was for breach of contract that was joined with an action to enforce a claim for a lien. The judgment is subject to limitation periods, if any, under the limitations statutes.

ii. Does the Former LA Apply or the LA2002 Apply?

[36] Section 45(1)(c) of the LA states that a party has 20 years from the date of judgment to collect on the judgment or to commence a new action. If that section applies, the judgment expired on April 27, 2019.

[37] Section 24 of the LA2002 states that the transitional provisions of the new act apply to “claims” based on acts or omissions that took place before January 1, 2004, and in respect of which “no proceeding has been commenced before that date”.

[38] Pursuant to s. 1 of the LA2002, “claim” means a claim to remedy an injury, loss or damage that occurred as a result of an act or omission. The words "claims ... in respect of which no proceeding has been commenced" in s. 24(2) refer to claims resulting from particular acts or omissions by a particular party for which no court action has been commenced: see Meady v. Greyhound Canada Transportation Corp., 2008 ONCA 468, 90 O.R. (3d) 774, at para. 11.

[39] The parties disagree about whether the LA or the LA2002 is applicable in this case. Ultimately, the correct answer depends on which “claim” and “proceeding” are appropriately considered:

• Continental characterizes the “claim” as the debt recognized in the 1999 judgment, and the “proceeding” as the steps leading up to that judgment.
• Biotechnik characterizes the “claim” as the right to enforce the judgment for failure to comply, and the “proceeding” as any steps that might have been taken on that judgment.

[40] One may sue on a judgment within the limitation period to obtain a new judgment, in order to recommence the running of the twenty-year limitation period: see Lax v Lax, [2004] W.D.F.L. 342 (ON CA), at para 25.

[41] It is rare for a person to sue on a judgment to recommence the running of the limitation period. An action to sue on a judgment could not be based on the original cause of action because the second claim would be barred for res judicata. When suing on a judgment, the cause of action for the second claim would inevitably be based on the defendant’s non-payment of the judgment.

[42] The use of the word “proceeding” in s.24(2) cannot be referring to the original action to obtain a judgment when the court is attempting to determine the limitation period to enforce the judgment. The relevant “proceeding” would be a suit upon the existing judgment to extend its life, not the original proceeding: see Kovachis v. Dunn, 2011 ONSC 4174, 71 E.T.R. (3d) 28.

[43] Therefore, I would apply the provisions of section 24(2) to the facts in this case as follows:

• The claim is based on acts or omissions that took place before January 1, 2004, namely non-payment of the judgment.
• No proceeding upon the judgment had been commenced before January 1, 2004.
• No former limitation period had expired before January 1, 2004, as it would have expired in 2019.

[44] Therefore, the transitional provisions of the LA2002 apply to the enforcement of the judgment in this case. Pursuant to s. 16(1)(b) of the LA2002, there is no limitation period in respect of a proceeding to enforce an order of a court.

[45] In addition, s. 24(4) of the LA2002 states that, if the former limitation period did not expire before January 1, 2004 and if no limitation period under this Act would apply were the claim based on an act or omission that took place on or after that date, there is no limitation period. Although the parties did not address s. 24(4) in their submissions, that section is also applicable in this case. Pursuant to s.24(4) of the LA2002, there is no limitation period requiring Biotechnik to collect on the judgment or to commence a new action within a specific period of time.

[46] Therefore, the LA2002 applies, and there is no limitation period in respect of enforcement of the judgment. The right to enforce the judgment has not expired.

B. Has the Judgment Been Satisfied?

i. Does the Lien Secure the Post-Judgment Interest?

[47] Biotechnik refers to “the judgment” interchangeably with the lien registered against the property, and submits that the lien protects the entire amount of the judgment including post-judgment interest. This position is misguided for two reasons.

[48] First, the lien is distinct from the judgment. Under the CLA, a lien is a statutory right to security for amounts which are the subject of an action to enforce the lien: see Logger Town Homes Ltd. v. Sadeghian, [2013] O.J. No. 4368 at para. 9. Although Biotechnik suggests that the action was for the enforcement of a lien, this submission ignores the fact that the claim arose because Continental breached a contract by failing to pay Biotechnik. The underlying action was based on a claim for breach of contract, and the lien provided security and an enforcement mechanism for that claim. This was a contractual claim joined with a lien claim.

[49] Second, the CLA clearly states that there is no lien for interest on a lien claim:

14. (2) No person is entitled to a lien for any interest on the amount owed to the person in respect of the services or materials that have been supplied by the person, but nothing in this subsection affects any right that the person may otherwise have to recover that interest.

[50] A claim for interest is not entitled to a lien. Interest on lien claims is awarded routinely as contractual and statutory claims for prejudgment and post-judgment interest, but without lien security: see Great Northern Insulation Services Ltd. v. King Road Paving and Landscaping Inc. 2019 ONSC 3671 (Div.Ct.), aff’d 2021 ONCA 367.

[51] A lien is a right to claim security in a property or a fund. A construction lien is a creature of statute. The statute expressly provides that a claim for interest is not recognized as being entitled to a lien. Accordingly, a claimant cannot look to either the premises or to the bond which replaced them for satisfaction of a claim for interest: see P & D Holdings Ltd. v. Alta Surety Co. (1996), 1996 780 (ON CA), 30 O.R. (3d) 97 (C.A.).

[52] Therefore, in this case, the lien does not secure the post-judgment interest. This finding does not impact Biotechnik’s right to claim post-judgment interest, but without lien security.

ii. Did Continental Pay Sufficient Funds into Court to Vacate the Lien?

[53] Biotechnik insists that Continental should have paid out the full amount of the judgment into court, including post-judgment interest, before the lien was vacated from title. Continental paid the amount of the lien plus 25 percent into court, for a total of $111,000, and the lien was removed from title. Biotechnik argues that Continental acted inappropriately when it brought the ex-parte motion to vacate the lien from title because it failed to disclose or pay the post-judgment interest. I do not accept these submissions.

[54] Section 44 of the CLA states that, on motion without notice, the court must make an order vacating the lien when a person pays into court the full amount of the lien plus 25 percent as security for costs. This mandatory provision requires the court to make an order vacating the lien when the money is paid into court, which is what happened here.

[55] As I have stated previously, the lien does not secure the post-judgment interest. Therefore, at the time of the motion to remove the lien from title, Continental did not have an obligation to pay post-judgment interest into court. Continental paid sufficient funds into court to vacate the lien.

[56] The lien now binds the monies that have been paid into court. Since the lien does not secure post-judgment interest, Biotechnik no longer has a claim against the property. Therefore, the notice on title for the property that was registered pursuant to s. 71 of the Land Titles Act must be removed.

iii. Was Biotechnik Required to Sell the Property?

[57] Continental submits that Biotechnik was required to sell the property and that it failed to comply with the terms of the judgment. Continental claims that Biotechnik breached the judgment and is in contempt of court. I do not accept these submissions.

[58] Although there is no evidence that the property was worthless, Continental purchased the property in 1998 for one dollar. The property required a significant investment of money to make it saleable. Neither party was in a rush to sell the property.

[59] The CLA sets out the rules regarding the sale of a property. Pursuant to s. 62(5), the court may order that the interest in the premises be sold and may direct the sale to take place at any time after the judgment or confirmation of the report, allowing a reasonable time for advertising the sale.

[60] In this case, the judgment ordered “that the interest of the defendant in the property be sold and the purchase monies be applied towards the judgment.” The judgment did not require Biotechnik to sell the property, it simply directed that the property be sold and the purchase monies be applied towards the judgment. Biotechnik did not breach the court order by failing to sell the property.

iv. Was Biotechnik Required to Account?

[61] In a 1999 affidavit in support of Biotechnik’s request for a writ of possession, Mr. Palmisano stated that the property could be rented to earn income. However, he now says that he did not consider the property rentable due to the state of disrepair and unsafe conditions.

[62] Mr. Spylo says that, between 2000 and 2010, Continental could not access the property. Lasso Construction had signs on the building, was using it for storage, and denied him access. In 2006, Mr. Spylo wrote two letters to Biotechnik’s counsel. He asked for an opportunity to inspect the property; he expressed concerns about Biotechnik renting the property to Lasso Construction, who was using the property for the storage and sale of building materials; and he complained that $75,000 in custom windows had been removed from the property. Finally, he requested an accounting. He received no response from Biotechnik.

[63] The parties were unable to provide the court with any case law describing the obligations of a lien claimant who obtains judgment and a writ of possession. There is an absence of authority regarding whether the lien claimant in those circumstances has an obligation to account. However, by analogy, the lien claimant in these circumstances is a secured creditor who should have similar rights and obligations as a mortgagee.

[64] A mortgagee who lawfully takes possession of a property must preserve and manage the property in the same fashion as a prudent owner. If a mortgagee in possession of the property is reckless in a manner that results in a loss to the owner, the owner is entitled to have an accounting. A mortgagee is entitled to look after himself first. However, he is not permitted to look after his own interests alone, and he cannot fraudulently, wilfully, or recklessly sacrifice the property of the mortgagor: see Capsule Investments Ltd v. Heck (1993), 1993 8465 (ON CA), 12 O.R. (3d) 225 (Ont. C.A.); Lay v. 1222055 Ontario Inc. (2005), 35 R.P.R. (4th) 79 (Ont. S.C.), at para. 32.

[65] Although Biotechnik did not pursue a writ of seizure and sale, the obligations in that circumstance are relevant by analogy. Pursuant to Rule 60.07(13) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, a creditor must account to the sheriff for any money received since an order was made when seeking enforcement by writ of seizure and sale. If Biotechnik had pursued the sale of the property, it ultimately would have had to account for any benefit received.

[66] In this case, Biotechnik was a creditor who was in a similar position to a mortgagee in possession of the property or a creditor seeking enforcement by writ of seizure and sale. Biotechnik had the same obligation to account when it obtained a writ of possession. An individual enforcing a debt by taking possession pursuant to a writ of possession does not do so without reciprocal obligations to ensure that the property owner’s rights are not unduly infringed.

[67] Although Biotechnik argues that it was not in possession of the property, it is indisputable that they were in possession when they obtained the writ of possession. It is insufficient for Biotechnik to say that the property was abandoned and that anyone could go on the property. It is notable, however, that a writ of possession is only valid for one year, pursuant to Rule 60.10(3).

[68] Biotechnik had an obligation to account for rent collected, assets removed from the property, and/or any benefits received as a result of its possession of the property. Biotechnik submits that it had no duty to account because it had not received any money or benefit from the property and there is nothing to account for. However, at minimum, Biotechnik was required to provide a response to Mr. Spylo’s 2006 correspondence, either by providing an accounting or a denial of any benefits received. It was not until 2008 that Mr. Palmisano swore two affidavits denying that Biotechnik was collecting rent and denying that he was an agent or partner of Mr. Lasso.

[69] The lien, lien judgment, and writ of possession are mechanisms to assist Biotechnik to collect payment. The obligation to account is tied to those collection efforts. It requires Biotechnik, as the creditor, to provide a record of what benefits it received from the possession of the property. Biotechnik was required to account to Continental.

v. Is Continental Entitled to a Set off for Rent and Stripped Assets?

[70] Continental claims equitable set off against the judgment for the benefits that Biotechnik received while it was in possession of the property. Continental states that Biotechnik and/or its tenants ruined the building, destroyed the utilities, destabilized the structure, pilfered materials within the building, and then abandoned it. Continental states that, in or about early 2019, it paid $448,798.43 in tax arrears for the property.

[71] On behalf of Biotechnik, Mr. Palmisano states that he disputes everything in Mr. Spylo’s affidavit, and specifically states the following:

• That Biotechnik did not have exclusive possession of the property.
• That Continental abandoned the property and that anyone could occupy it.
• That the property was not rentable due to its poor, dilapidated and unsafe condition. It was condemned by the city.
• That Biotechnik never prevented Mr. Spylo from attending at the property and did nothing to prevent Continental from selling or renting the property.
• That he and Biotechnik were not affiliated with Lasso Construction.
• That Biotechnik did not rent the property to Mr. Lasso and did not receive rent. He takes the position that Mr. Spylo’s evidence on these points is hearsay and speculation.
• That Biotechnik did not strip the property of assets or cause damage to the property.

[72] Mr. Palmisano acknowledges that Biotechnik hired Lasso Construction to do some work on the property, including installing the water supply in 2002, and states that his dealings with the company were always with Mr. Lasso. Biotechnik does not deny that Lasso Construction installed signs on the property, used the building to store materials, and operated out of the building. Although Biotechnik states that the property was condemned by the city, it appears that it permitted Lasso Construction to conduct business on the premises.

[73] Continental provided appraisal evidence demonstrating that the premises could have generated $87,000 in rent annually. Continental submits that any benefits received are connected to the enforcement of the judgment. They should be treated as credit or payment toward the outstanding judgment. The set off claimed in this case is effectively a request to attribute credit toward the judgment based on an accounting that should have been made by Biotechnik.

[74] As stated previously, the lien, lien judgment, and writ of possession are mechanisms to assist Biotechnik to collect payment. Continental’s claim for set off is closely bound up with Biotechnik’s efforts to collect on the judgment, because any money or benefit received during the enforcement process should be credited towards the judgment.

[75] Biotechnik submits that it has been prejudiced by Continental’s delay in pursuing the claims, as Mr. Lasso is now deceased. However, any prejudice is Biotechnik’s own doing as it did not provide a response to Continental’s request for an accounting in 2006. In addition, although Mr. Lasso is deceased, Biotechnik has not provided evidence of any efforts to contact other employees of Lasso Construction who may have knowledge of these issues.

[76] Unfortunately, the parties have provided fundamentally conflicting versions of events. I am unable to make findings of credibility or make factual findings regarding the set off claims solely based on affidavit evidence. The factual disputes regarding any benefits that Biotechnik may have received cannot be resolved without viva voce evidence.

[77] Since the underlying action is complete, Continental must commence a new action if they wish to have the claim of set off determined by the court. A motion is not the proper venue to determine the set off claim, which would involve weighing the facts and assessing credibility. The issue of set off can only be determined through the calling of viva voce evidence.

C. Does the Equitable Doctrine of Laches Apply?

[78] Continental argues that enforcement of the 1999 judgment is barred by the doctrine of laches. Similarly, Biotechnik argues that Continental’s claim for equitable set off is barred by laches.

[79] The equitable doctrine of laches permits a defendant to resist an equitable (although not a legal) claim made against him if he can demonstrate that the plaintiff, by delaying the institution or prosecution of his case, has either (a) acquiesced in the defendant's conduct, or (b) caused the defendant to alter his position in reasonable reliance on the plaintiff's acceptance of the status quo, or otherwise permitted a situation to arise which would be unjust to disturb: see M.(K.) v. M.(H.), 1992 31 (SCC), [1992] 3 S.C.R. 6.

[80] There are two distinct branches to the laches doctrine, and either will suffice as a defence to a claim in equity. Mere delay is insufficient to trigger laches under either of its two branches. Rather, the doctrine considers whether the plaintiff, by their delay, has acquiesced to the defendant’s conduct, or whether the delay results in circumstances that make the prosecution of the action unreasonable. Ultimately, laches must be resolved as a matter of justice as between the parties, as is the case with any equitable doctrine: see M.(K.) v. M.(H.).

[81] When an action is not barred by any statute of limitations, mere lapse of time is not sufficient to deprive one of his equitable rights. The doctrine of laches applies where it would be unjust to give a remedy because of a party’s conduct, which might fairly be regarded as equivalent to a waiver, or where the party’s conduct put the other party in an unreasonable situation if the remedy were asserted. The length of delay and the nature of acts done in the interval are important: see Harris v. Lindeborg (1930), 1930 28 (SCC), [1931] S.C.R. 235.

[82] In the case before the court, Continental submits that the doctrine of laches prevents Biotechnik from collecting on the judgment. Because Biotechnik has waited more than 20 years to collect on the judgment, Continental argues that Biotechnik should not benefit from Continental’s investment of work and money into the property. However, the doctrine of laches cannot be invoked where there is no claim for equitable relief. As a result, laches cannot be invoked by Continental to defend against collection on the judgment, because it is not an equitable claim.

[83] Biotechnik seeks to have Continental’s claim for equitable set off barred by laches. From a legal perspective, the doctrine of laches is available to defend the claim of set off because it is an equitable claim. Biotechnik submits that the delays in pursuing the set off claim, together with the death of Mr. Lasso, have made further prosecution of the set off claim unreasonable. Biotechnik argues that the unreasonableness of Continental’s conduct is exacerbated by the abandoned motions in 2006 and 2008 that sought an accounting and set off.

[84] However, I am not satisfied that the equitable doctrine of laches should be invoked to resist the set off claim. If a court determines that Biotechnik benefited from the possession of the property, it was always the obligation of Biotechnik to account for that benefit. Since laches must be resolved as a matter of justice between the parties, it would be unfair and unreasonable for Biotechnik to benefit from its failure to account.

[85] Therefore, the equitable doctrine of laches does not apply in this case.

V. COSTS

[86] I directed the parties to attempt to agree on costs prior to my decision, but they were unable to do so. Counsel advised that there were no offers to settle.

[87] This was a complex motion that required further written submissions after oral argument, because of the novel nature of some of the issues raised.

[88] There have been mixed results on this motion. Although Continental did not succeed in their submission that the judgment is unenforceable, I have made findings that were beneficial to Continental’s position, including the finding that the lien only secures the amount of the judgment and not the interest.

[89] I find that it is appropriate that each party should bear their own costs, and therefore make an order for no costs of the motion.

VI. CONCLUSION

[90] For all these reasons, the court makes the following findings and orders:

1. The court finds that the LA2002 applies, and that there is no limitation period in respect of enforcement of the judgment. The right to enforce the judgment has not expired.

2. The court finds that the lien does not secure the post-judgment interest. This finding does not impact Biotechnik’s right to claim post-judgment interest, but without lien security.

3. The court finds that Continental paid sufficient funds into court to vacate the lien.

4. This court orders that the notice that was registered pursuant to s. 71 of the Land Titles Act shall be removed from title for the property located at 152 Shanley Street, Kitchener, Ontario, within 30 days of this order.

5. The court finds that Biotechnik was not required to sell the property but was required to account to Continental.

6. This court finds that the issue of set off can only be determined through the calling of viva voce evidence.

7. This court finds that the equitable doctrine of laches does not apply.

8. This court orders that, except as set out herein, the balance of the motion is hereby dismissed without costs.

[91] On consent, the court makes the following additional orders:

1. This decision is stayed pending expiry of the 15-day appeal period. If no motion for leave to appeal is delivered within 15 days, the stay shall expire.

2. If a motion for leave to appeal is filed, this decision is stayed pending appeal.

[92] At the time the motion was argued, there was discussion about whether I might seize myself of any further proceedings in this matter. My rulings and findings on this motion shall be binding on any further hearing arising out of the Biotechnik’s efforts to collect on the judgment and on any set off claim. However, I am not seized.

Braid, J.

Released: November 17, 2021