COURT FILE NO.: CV-18-135125-00

DATE: 20210203

ONTARIO

SUPERIOR COURT OF JUSTICE

In the Matter of the Construction Lien Act, R.S.O. 1990, c. C.30

BETWEEN:

PENTAD CONSTRUCTION INC.

Plaintiff

– and –

2022988 ONTARIO INC., 2036736 ONTARIO INC., ARMOR CMC INC., 2382215 ONTARIO INC. and TORONTO DOMINION BANK

Defendants

Jonathan Piccin and Paul R. Bottos for Pentad

William A. Chalmers for 2022988 Ontario Inc., 2036736 Ontario Inc., Armor CMC Inc., and 2382215 Ontario Inc.

HEARD BY ZOOM: December 11, 2020

RULING ON MOTION TO REDUCE SECURITY

C. boswell j.

I. Introduction

[1] Armor CMC Inc. is a construction management firm. A number of years ago it acted as a project manager in relation to a residential subdivision being developed by the numbered company defendants in Whitchurch-Stouffville. Pentad was subcontracted by Armor to perform certain site-servicing work on the development.

[2] Disputes arose between the parties regarding the value of the work completed by Pentad, the amounts it invoiced and the amounts paid by Armor. Pentad pulled its resources from the worksite in January 2018. On February 23, 2018, it registered a Claim for Lien under the provisions of the Construction Lien Act (“CLA”) in the amount of $479,364.57. Armor bonded off the lien on May 25, 2018 by posting security in the sum of $529,364.57, representing the amount of the lien claim plus $50,000 for costs.

[3] Armor has never accepted that the amount of the lien claim is genuine. It moves, under s. 44(5) of the CLA, for an order reducing the amount of the security it has posted with the court arguing that there is no reasonable basis for the amount claimed. Indeed, Armor submits that there is no reasonable basis to conclude that any amount is owing to Pentad and asks that the security be reduced to zero.

[4] Not surprisingly, Pentad disagrees with Armor’s position and asks that its motion be dismissed.

[5] As I will explain, a motion under s. 44(5) of the CLA is conventionally approached in much the same was as a motion for summary judgment is. In particular, where there are significant contested issues of fact it is generally preferable that they be resolved by way of a trial.

[6] There are many contested factual issues in this case. Armor, the moving party, filed a 350 page motion record, a 185 page supplemental motion record, a 141 page second supplemental motion record, a 23 page factum and a 39 page reply factum. Pentad filed a 181 page responding motion record and a 31 page factum. To be fair, the volume of materials filed on a motion is not always positively correlated with a high rate of controversy or complexity. In this case it is.

[7] Notwithstanding the volume of material filed, Armor’s counsel asserts that the motion is really quite simple. Armor’s assertion is that the parties agreed that Pentad would be paid only after its work was certified by Armor’s authorized engineer. Armor says that the law is clear in these circumstances. The decisions of the authorized engineer are final and binding on Pentad absent demonstrated fraud or bad faith. Armor’s authorized engineer has not certified the sums claimed by Pentad as owing. Therefore, in Armor’s position, they are not owing and the amount of the lien should be reduced to zero.

[8] Pentad argues that the many factual issues in dispute make this matter unresolvable on a s. 44(5) motion. Moreover, a number of those disputed issues involve the payment certifier, including the very identity of that certifier and whether he or they carried out his or their responsibilities in good faith and in compliance with the terms of the parties’ contract. Pentad urges the court to dismiss the motion.

[9] The parties’ positions require the court to address a number of issues including:

(i) The principles that govern motions under s. 44(5) of the CLA;

(ii) The effect of a payment certification provision in a commercial construction contract; and, ultimately,

(iii) Whether there is a reasonable basis for the amount claimed by Pentad in its Claim for Lien.

[10] Any comprehensible ruling requires sufficient context before getting into the details of the live issues. What follows is a basic overview of the relevant circumstances.

II. OVERVIEW

The Contract

[11] Pentad and one of its principals, Dominic Lippa, entered into a contract with Armor on December 16, 2016 for site servicing work at a residential subdivision in Whitchurch-Stouffville.

[12] Pentad’s work included site preparation, importing clean fill, grading, stormwater management, underground services, storm sewers and primary, boundary and secondary roadways.

[13] Armor agreed to pay Pentad $2,744,000 to complete the contract works. The contract is clear that this figure is inclusive of all applicable taxes.

[14] Pentad had an unrelated contract with another developer to haul away clean fill from a development in Markham. Pentad was being paid to remove roughly 125,000 cubic metres of fill. It needed somewhere to place the fill. Armor agreed that the fill could be delivered to the Whitchurch-Stouffville site for a fee of $312,750.

[15] The contract is not clear about whether the price of $2,744,000 includes a set-off of $312,750 or whether the fill fee is to be accounted for separately.

[16] Perhaps most significantly for this motion, sections 4.0 to 4.2 of the contract set out the parties’ agreement regarding payment for services performed:

4.0 The Contractor shall invoice and/or make application for payment for the portions of work performed and certified complete. Payment will be made to the Contractor 45 days after receipt of the certificate and clearances as set out in this Contract, in an amount equal to 90% of the value of the portions or (sic) work certified completed to the end of the previous month less the aggregate of the previous payments, final payment to the Contractor for the balance of 10% will be paid not less than 45 days after the final completion of the project…

4.1 The Contractor’s work performed/provided under this Contract shall be inspected for quality and quantity and certified complete, received and approved by [Armor’s] authorized Engineer, prior to any sums becoming due hereunder.

4.2 The Contractor shall provide the Client with documentation, evidence of compliance inspections, tests, executed completions certificate, and notarized statutory declaration stating that all accounts, and indebtedness incurred by the Contractor have been paid in full and that the Workplace Safety and Insurance Board (WSIB) Clearance, the Performance Bonds and the Insurance are in full force. Further, as a condition precedent to the payment the Contractor shall execute a general release in a form approved by the Client in favor of the Client.

[17] The identity of Armor’s authorized engineer was not specified in the contract. Armor maintains that it was Paul K. Black, an Ontario Licensed Professional Engineer. Pentad contends that it was never entirely clear. It understood that there may have been a second authorized engineer, a company named Stantec Consulting Ltd., and more particularly, Wayne Pilkey of that firm.

[18] The contract also provided that no changes to the work specified in the contract were to be undertaken without prior, written approval, signed by Armor. The parties agreed that Pentad would not be compensated for any unapproved changes to the scope of Pentad’s work.

[19] Two change orders were generated during the course of Pentad’s work. Both relate to the fill being brought onto the site by Pentad.

[20] Change Order 1, dated May 1, 2017, expanded the sources from which Pentad could import fill to the Whitchurch-Stouffville site. There was otherwise no change to the contract price.

[21] Change Order 2, dated August 1, 2017, provided for an increase in the amount of fill Pentad was permitted to import to the site. The increased fill necessitated a retaining wall, which was to be completed at Pentad’s cost. There was otherwise no change to the contract price.

The Invoicing

Invoice 1

[22] Sebastian Vono is the president of Pentad. He swore an affidavit on February 8, 2020 that was filed in response to Armor’s motion. He deposed that Pentad began to supply services and materials to the Whitchurch-Stouffville site on January 5, 2017. Their first invoice and application for payment, in the amount of $130,999.20, was rendered to Armor on March 7, 2017. It covered the period December 1, 2016 to March 7, 2017. It was comprised of work valued at $128,809.44, less the 10% statutory holdback, plus HST in the amount of $15,070.70.

[23] According to the terms of the contract, Pentad’s invoice needed to find its way to Armor’s payment certifier.

[24] Mr. Vono did not say to whom Pentad delivered its invoice. On its face, it was addressed to 2382215 Ontario Inc., the owner/developer.

[25] In some manner the invoice made its way to Mr. Black. On March 10, 2017 he issued “Progress Certificate 1”, under his seal, in the amount of $128,809.44 less the 10% statutory holdback, plus HST of $15,070.70. It would appear that HST was added in error, given the explicit indication in the contract that HST was included in the fixed price.

[26] On the strength of Mr. Black’s certification, Pentad submitted an application for payment on March 10, 2017 in the amounts certified. Armor signed off on it.

[27] It appears that payment was made under Progress Certificate 1 on or about April 21, 2017. Pentad signed a receipt and release, dated April 21, 2017, confirming that it had been paid in full for the work certified.

Invoice 2

[28] Pentad submitted its second invoice to Armor on April 17, 2017. The invoice covered work performed between March 7, 2017 and April 17, 2017. The balance billed was $80,597.25, which included a 10% holdback and HST. Again, the invoice made its way somehow to Mr. Black who approved it, as submitted, by way of Progress Certificate 2, issued under Mr. Black’s seal on April 17, 2017.

[29] Again, on the strength of Mr. Black’s certification, Pentad submitted an application for payment to Armor for the amount certified. Armor signed off on it.

[30] Subsequently, on June 9, 2017, Stantec issued a document entitled “Payment Certificate 2” by which Stantec recommended payment to Pentad in the amount certified by Mr. Black in Progress Certificate 2.

[31] To the casual observer, like me, it is not entirely clear how Stantec’s Payment Certificate 2 fits into the overall scheme contemplated by ss. 4.0-4.1 of the contract. It was apparently not a condition precedent to payment as there never was a Payment Certificate 1 issued with respect to Pentad’s first application for payment.

[32] According to Armor’s representative, John Trifiletti, and Stantec’s representative, Wayne Pilkey, Stantec’s certifications were employed as an independent measure of verification for the project’s bankers. In other words, Stantec’s certifications were for the purpose of drawdowns on the project financing loan.

[33] In any event, payment appears to have been made on Pentad’s second invoice on or about June 14, 2017, which is the date that Mr. Vono signed a receipt and release, dated June 13, 2017, confirming payment in full of the amount certified in Progress Certificate 2.

Invoice 3

[34] Pentad submitted a third invoice on May 9, 2017, in the amount of $125,091.00. Things get a little complicated around this invoice. I have been provided with two copies of the May 9, 2017 invoice. The first, as I said, is in the amount of $125,091.00. The second is in the amount of $126,854.48.

[35] Mr. Vono attached an application for payment dated April 28, 2017 as Exhibit “C” to his affidavit. It reflects the invoice for $126,854.48. It also reflects that the work covered by the application was completed between April 17, 2017 and April 28, 2017.

[36] With the first two invoices, the application for payment appears to have been submitted after a Progress Certificate was issued by Mr. Black. That appears not to have been the case with Pentad’s third invoice. I have no explanation why.

[37] To compound the confusion surrounding this third invoice, Stantec appears to have issued Payment Certificate 3 on July 17, 2017 in the amount of $126,854.48 and they appear to have emailed a copy of the certificate to a number of parties, including Pentad. As at July 17, 2017, however, Mr. Black had yet to issue a Progress Certificate in relation to Pentad’s third invoice.

[38] The next day, Mr. Pilkey emailed representatives of Pentad and advised them that Payment Certificate 3, which he had sent to them a day earlier, was in fact just a draft and was not to be processed. He asked that it be disregarded.

[39] Oddly, Mr. Pilkey also sent a letter to Armor on July 17, 2017, on Stantec letterhead, enclosing a copy of Payment Certificate 3. The certificate was not referred to as a draft. Moreover, Mr. Pilkey said, amongst other things.

The Payment Certificate covers work for the period ending April 28, 2017…We recommend total payment be made directly to the contractor in the amount of $126,854.48, which includes HST as shown on the Payment Certificate.

[40] The language of Mr. Pilkey’s letter belies the suggestion that Payment Certificate 3 was a “draft”. It may have been a mistake, but it certainly lacks the hallmarks of a draft.

[41] According to Mr. Vono, after Mr. Pilkey’s “draft” Payment Certificate 3 was circulated, Mr. Black delivered a marked-up version of Pentad’s third invoice which reflected a valuation of their work at $125,091.00, including taxes, for work up to July 31, 2017.

[42] At some point, and for reasons not explained by Mr. Vono, Pentad appears to have revised its third invoice and submitted a revised application for payment with respect to it. The revised application for payment was in the amount of $125,091.00, precisely the amount that Mr. Black had signaled he was prepared to certify. Pentad’s revised application for payment was dated August 11, 2017 and stated that it covered work performed between April 17, 2017 and July 31, 2017. It was signed by both Mr. Vono and Mr. Lippa and was signed off by Armor.

[43] Mr. Black issued Progress Certificate 3, under his seal, on August 11, 2017, covering the period April 17, 2017 to July 31, 2017. He certified completed work during this period totaling $125,091.00.

[44] On August 16, 2017, Stantec issued a “Progress Statement” reflecting the amount of work completed by Pentad. The amount is consistent with the completed work certified by Mr. Black on Progress Certificate 3. Again, how Stantec’s Progress Statement fits into the mix is not entirely clear.

[45] Following Mr. Black’s issuance of Progress Certificate 3, Mr. Vono executed a series of documents required to receive payment, as per s. 4.2 of the contract. Included in those documents were two statutory declarations sworn by Mr. Vono on August 25, 2017 and September 1, 2017. Amongst other things he swore that,

The sum of $125,091.00, less the hold back is the total value of all the work, materials and services provided by the Contractor on the said lands to July 31, 2017. The said amount is hereby received, and paid in full.

[46] Dominic Lippa swore a similar Statutory Declaration on August 25, 2017 in which he too, confirmed that upon payment of the sum of $125,091.00, Pentad was paid up to date for is work to July 31, 2017.

[47] On September 1, 2017, Mr. Vono and Mr. Lippa jointly signed a Receipt and Release which provided as follows:

In consideration of the payment to us under Certificate No: 3 in the sum of One Hundred and Twenty Five Thousand and Ninety One Dollars ($125,091.00), inclusive of all taxes, allowances, and all sums etc., the undersigned hereby confirms that Pentad Construction Inc. and Dominic Lippa have been paid in full all sums owed to date, whether invoiced or not, and further confirm that upon receipt of the said sum, the undersigned warranties all work to be free of defects and will release and forever discharge 2022988 Ontario Inc., 2036737 Ontario Inc. and 2382215 Ontario Inc. and its related companies and principals from any and all actions, causes of actions, claims, and demands in respect of the work performed.

AND FOR THE SAID CONSIDERATION we further agree not to make any claim or to take any proceedings and release and discharge 2022988 Ontario Inc., 2036737 Ontario Inc. and 2382215 Ontario Inc. and its related companies and principals from any claim whatsoever.

Additional Invoices

[48] Prior to the resolution of Pentad’s third invoice to Armor, it rendered a fourth, on June 22, 2017. This invoice was in the amount of $63,878.79.

[49] After settling the third invoice in August 2017, Pentad rendered a number of further invoices, including:

(a) October 3, 2017 in the amount of $477,325.45, later revised downwards to $381,713.21;

(b) November 14, 2017 in the amount of $1,283,722.49;

(c) February 21, 2018 in the amount of $517,000.00, later revised downwards to $392,043.90. With the revised invoice, Pentad provided a statement of account, listing the amounts invoiced and paid to date. The statement reflected the removal of the amounts invoiced on October 3 and November 14, 2017.

[50] None of Pentad’s further invoices were certified by Mr. Black, or anyone else, and none were paid.

[51] On a number of occasions, Mr. Black asked Pentad to obtain a topographic survey to confirm the amount of work that it was claiming it completed. Armor says the contract supports Mr. Black’s request. It points to section 9, which provides:

9. The Contractor agrees to provide all necessary, shop drawings, inspections, testing, licenses/permits, for the execution and performance his work.

[52] Mr. Black was never satisfied with the topographic surveys provided to him by Pentad. On February 9, 2018, he emailed Pentad to let them know he would be retaining a topographic surveyor and would assess the amount owed to them after that. He said, specifically,

During the course of this project Pentad has acted in an irresponsible and sometimes vexatious manner. Your invoicing has been misleading and frivolous, including your claim in your e-mail of the amount of work that has been completed since your last payment. We are presently completing a topographic survey which was supposed to be completed by Pentad and was requested numerous times. Once the survey is complete next week, I will evaluate the amount of work that has actually been completed and a certificate of payment will be issued accordingly.

[53] Given Pentad’s invoicing history – submitting, revising and retracting huge amounts – Mr. Black could be forgiven for his expressed concerns and for insisting on a topographic survey.

[54] Recall that Pentad was contracted by Armor to perform site servicing work on the project, but at the same time they were importing 125,000 cubic meters of fill under a separate contract for which they were being paid by a third party. It was incumbent on Mr. Black to monitor both aspects of Pentad’s work. To put this in perspective, I note that one tandem dump truck holds roughly 10 cubic metres. In the result, Pentad was delivering 12,500 truck loads of fill to the site.

[55] On February 26, 2018 Mr. Black emailed Pentad and advised them that the percentages of work shown as complete on the February 21, 2018 invoice were a lot higher than the work actually performed. He repeated his comments contained in his February 9, 2018 email, to wit, that he would issue a further payment certificate once the topographic survey came back.

[56] Mr. Black received the topographic survey on March 3, 2018 through Mr. Pilkey. He issued what he called “Payment Certificate 4” on March 12, 2018. I have no explanation as to why Mr. Black used the term Payment Certificate rather than Progress Certificate. In any event, the certificate covered the period August 1, 2017 to March 12, 2018. It contained the following notable changes since Progress Certificate 3 was issued in August 2017:

(a) $29,510.00 in additional fees for the “general requirements” segment of the contract was approved; and,

(b) $48,858.85 for the cost of a culvert supplied by Pentad was approved; but,

(c) Armor was credited with a pre-payment of $48,858.85 for the culvert and a further $50,000.00 for overfilling by Pentad above design grades. In other words, Mr. Black concluded, presumably from the topographic survey, that Pentad had imported 10,000 cubic metres of fill to the site above the approved quantity. A removal fee of $5.00 per cubic metre was applied.

[57] In the result, Payment Certificate 4 indicated that Pentad had been overpaid by some $20,490.00 to March 12, 2018.

The Lien

[58] Frustrated by what it perceived as a lack of attention to its invoicing, Pentad registered a Claim for Lien under the CLA on February 23, 2018 in the amount of $479,364.57. The amount claimed is broken down as follows:

(a) $392,043.90 purportedly owing under the revised February 21, 2018 invoice;

(b) $80,969.02 which Pentad asserts is the amount held back by Armor on previously paid invoices plus the amount to be held back on the February 21, 2018 invoice in accordance with the terms of the CLA, plus, I think, HST on those amounts; and,

(c) $6,351.65, which is HST Pentad says is owed to it for the culvert it delivered to the site. The cost of the culvert was $48,858.85 plus HST. Armor pre-paid the $48,858.85, but not the HST.

III. THE PARTIES’ POSITIONS

Armor

[59] Armor contends that the contract is clear about the conditions under which Pentad would become entitled to payment for work performed. In particular, the work had to be certified as satisfactorily completed by an authorized engineer before any payment became due.

[60] Armor further contends that it was patently clear at all times that Mr. Black was its authorized engineer.

[61] There is no dispute that Mr. Black has not certified, as owing to Pentad, the amount of work that purportedly supports Pentad’s claim for lien. Armor submits that Mr. Black’s Payment Certificate 4 is the last word on what is (or is not) owing to Pentad, unless it can be demonstrated that Mr. Black is guilty of bad faith or fraud or that he knowingly and wilfully disregarded his duty.

[62] In Armor’s submission, Pentad has not advanced an assertion of bad faith, fraud or wilful disregard of duty in its pleadings, nor has it adduced any evidence of bad faith, fraud or wilful disregard of duty in the context of this motion.

[63] Armor asks the court to reduce to zero the amount of security it posted to bond off Pentad’s lien.

Pentad

[64] Pentad demurs of course. It advances a number of arguments in response to Armor’s request.

[65] First, it correctly asserts that there are a host of contested factual issues between the parties. A motion under s. 44(5) of the CLA is not the forum to resolve those issues.

[66] Some of the more substantial issues identified by Pentad are:

(i) the identity of Armor’s authorized engineer. Pentad submits that the contract is silent as to the identity and, in practice, both Mr. Black and Stantec acted in the role;

(ii) whether Stantec’s Payment Certificate No. 3 was in fact a draft, or whether Armor is bound by it;

(iii) whether there were approved extras;

(iv) whether the fill credit of $312,750 was built into the fixed contract price or whether it was to be accounted for separately;

(v) whether HST was to be included in the fixed price or extra;

(vi) whether Progress Certificate 3 covered work performed up to April 28, 2017 or July 31, 2017;

(vii) whether the contract required the authorized engineer to certify the progress of Pentad’s work on a monthly basis; and,

(viii) the determination of the work completed by Pentad on site between August 2017 and February 2018.

[67] Second, Pentad says that a determination of whether a payment certifier’s decisions are final has never been the subject of a s. 44(5) motion. It is properly a matter for trial.

[68] Third, Pentad asserts that there is evidence that Mr. Black acted in bad faith or otherwise wilfully disregarded his duty. In particular, Pentad submits that the contract required the authorized engineer to review Pentad’s invoicing on a monthly basis, yet almost four months went by between Pentad’s third invoice and Mr. Black’s Progress Certificate 3. After that, none of Pentad’s invoices were processed until Pentad’s lien was filed. At that time, Mr. Black issued Payment Certificate 4, which showed a negative balance owing, despite the fact that Pentad had been on site working for months since they were last paid.

IV. DISCUSSION

A. The Legal Framework

(i) Motions under s. 44(5) of the CLA

[69] Armor’s motion is brought under s. 44(5) of the CLA which provides as follows:

Where an amount has been paid into court or security has been posted with the court under this section, the court, upon notice to such persons as it may require, may order where it is appropriate to do so,

(a) the reduction of the amount paid into court, and the payment of any part of the amount paid into court to the person entitled; or

(b) the reduction of the amount of security posted with the court, and the delivery up of the security posted with the court for cancellation or substitution, as the case may be.

[70] Pentad’s counsel argued that s. 44(5) is not a statutory invitation to parties to engage in lengthy interlocutory proceedings that essentially go to the very merits of a plaintiff’s claim for lien. In counsel’s submission, s. 44(5) is designed for the interlocutory disposition of simple issues. He gave two examples: (1) where there is evidence of payment that has not been accounted for in the lien claim; or (2) where a released holdback reduces the amount outstanding.

[71] Pentad’s argument has much to be said for it. The CLA was intended to provide a summary process for the determination of the claims of unpaid contractors. Section 67(1) (now s. 50(3) of the Construction Act) provides that the procedure in an action under the CLA is to be “as far as possible of a summary character, having regard to the amount and nature of the liens in question.”

[72] Time-consuming interlocutory motions, particularly ones requiring a deep dive into the merits of the claim, are antithetical to the summary character of the procedures established by the legislation.

[73] Having said that, I have previously given leave to Armor to bring this motion. The motion has been fully argued and I must apply the governing principles identified in the jurisprudence. I begin with the Divisional Court’s ruling in H.I.R.A. Ltd., v. Middlesex Standard Condominium Corp. No. 823, 2018 ONSC 5931.

[74] To be clear, H.I.R.A. was not a case where s. 44(5) of the CLA was engaged. Instead it concerned a motion under s. 44(2) of the CLA, which provides as follows:

Upon the motion of any person, the court may make an order vacating the registration of a claim for lien, and any certificate of action in respect of that lien, upon the payment into court or the posting of security of an amount that the court determines to be reasonable in the circumstances to satisfy the lien.

[75] There is, however, in my view, no reason to conclude that different tests apply to motions under ss. 44(2) and 44(5).

[76] Section 44 of the CLA provides the mechanics for parties to vacate registered liens upon providing alternative security. Its subsections appear to me to be designed to ensure that what is required as security to vacate a lien is what is reasonable in the circumstances – no more, no less.

[77] Sub-section 44(2) authorizes the court to vacate a claim for lien upon the posting of security in an amount deemed reasonable to satisfy the lien.

[78] Sub-section 44(5) authorizes the court to reduce the amount of security otherwise posted to vacate a lien, where appropriate. In my view the phrase “where appropriate”, for all intents and purposes, has the same meaning as “where reasonable”. Any amount that is not reasonable can not be appropriate.

[79] In my view, the Divisional Court’s direction regarding the proper approach to motions under s. 44(2) is equally applicable to motions under s. 44(5) because both sections serve the same purpose – to ensure that an amount of security required to vacate a lien is reasonable.

[80] In the result, the governing test appears to be that the court is entitled to reduce the amount of the security posted to vacate a lien “if the evidence supporting the calculation of the claim for lien fails to establish a reasonable basis for the amount claimed.” See H.I.R.A., para. 10 and HMI Construction Inc. v. Index Energy Mills Road Corp., 2017 ONSC 4075 (Div. Ct.) at para. 25.

[81] The assessment of the evidence in support of, or contrary to, the amount claimed is to be approached much in the same way that the evidentiary record is approached on a motion for summary judgment. See H.I.R.A, at para. 8. See also Ben-Air Systems Inc. v. Neilas (799 College St) Inc., 2014 ONSC 7205 (Master) at para. 27.

[82] Judgment may be rendered on a summary judgment motion (and, by analogy, on a s. 44(5) motion) provided that the trial judge is able to reach a fair and just determination on the merits on the basis of the record filed. See Hyrniak v. Mauldin, 2014 SCC 7 at para. 49, where Karakatsanis J. held that a fair and just determination will be possible where the process (1) allows the judge to make the necessary findings of fact; (2) allows the judge to apply the law to the facts; and, (3) is a proportionate, more expeditious and less expensive means to achieve a just result.

[83] Armor’s case, as framed in it’s reply factum and in oral argument, distilled to a single issue – whether the payment certifier’s decisions are final and binding on the parties. If so, then the basis for Pentad’s claim for lien evaporates, since the position of the payment certifier is that Pentad has been overpaid to date.

[84] Pentad’s counsel argued that determinations about the binding nature of a payment certifier’s decisions are best left to trial. He cited and relied on the decision of Master Sandler in Lawhill Ltd. v. Ontario, [2007] O.J. No. 4825.

[85] Lawhill involved a 54 day lien trial. After the evidence concluded, but before the Master rendered his decision, the judgment of McKinnon J. in Federated Contractors Inc. v. Ontario Realty Corp., [2007] O.J. No. 463 (S.C.J.) was released. I will have more to say about the Federated decision momentarily. But for now, it is enough to note that it held that where parties have agreed that payment will be subject to approval by a payment certifier, they are bound by the certificates issued, unless the certifier’s conduct has been such that it would be inequitable to rely upon them.

[86] Master Sandler found that he was bound by the Federated decision. He concluded that a payment certifier’s decisions are final and binding, absent fraud on the part of the certifier or owner. He went on to lament the fact that the parties had not availed themselves of the provisions of the CLA and the Rules of Civil Procedure, that may have led to an order directing a trial of a preliminary issue. Specifically, whether the parties were bound by the decisions of the payment certifier. He posited that “[p]erhaps the next time this issue arises in a construction or construction lien action, such a preliminary issue can be put forward for trial first. If successful, a lot of time and money could be saved.”

[87] Pentad’s counsel submit that Master Sandler’s comments should be taken as a direction that the issue of the binding nature of a payment certifier’s decisions must be determined at a trial. I disagree. The thrust of Master Sandler’s comments was that the payment certification issue should be determined as a preliminary issue, before embarking on a time-consuming nuts and bolts trial. If the determination can be made on a motion that meets the requirements of Hyrniak, then so much the better.

[88] In summary, I find that s. 44(5) offers a mechanism by which to determine, in a summary fashion, whether the amount claimed in a Claim for Lien is reasonable. For the purposes of this motion, the reasonableness of Pentad’s claim comes down to the determination of whether Pentad is bound by the decisions of the payment certifier. It will be appropriate to make that determination, in a summary way, provided the court is able to make the necessary findings of fact and apply the law to the facts in a proportionate and cost-efficient way. It will be apparent from the conclusions I reach as this ruling proceeds, that I am satisfied that the issue at the core of this motion can appropriately be determined in a summary way.

[89] In terms of making factual findings, I note that certain expectations relating to the evidentiary record have been established by the jurisprudence applicable to summary judgment motions. They are readily adaptable to motions under s. 44(5) of the CLA. They include:

(a) The moving party bears the legal and persuasive burden to establish that there is no reasonable basis for the amount claimed;

(b) The responding party bears an evidentiary burden to establish that there is a reasonable basis for the amount claimed;

(c) Each party must “put their best foot forward” in terms of the evidentiary record; and,

(d) The court is entitled to assume that the record before it contains the core substance of the evidence that the parties will present at trial.

See for instance, in the summary judgment context: Dawson v. Rexcraft Storage & Warehouse Inc., 1998 CanLII 4831 (ON CA), [1998] O.J. No. 3240 (C.A.) at para. 17; Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200 at paras. 26 and 32; and Penretail Management Ltd. v. 2380462 Ontario Inc. (o/a Bolton Health Centre), 2016 ONSC 600, at para. 10.

(ii) Payment Certifier Provisions

[90] The main thrust of Armor’s position is that the parties agreed to a payment certification provision and, in the result, are bound by the decisions of the payment certifier. The case law appears to support that position.

[91] I return to the Federated decision. There, McKinnon J. canvassed about 150 years of jurisprudence and concluded as follows, at para. 40:

It is apparent that in Canada there is an unbroken string of cases commencing in 1853 and confirmed as recently as 2004 affirming the duty the (sic) pay in accordance with the architect or engineer's certificate, as commonly provided for in building contracts.

[92] Justice McKinnon went on to observe that there was wisdom in a regime that binds parties to the decisions of a payment certifier where they have contractually agreed to be so bound. He cited three reasons supporting that wisdom:

(i) In the case of a fixed price contract, it would be manifestly unfair to adjudicate a claim on a nuts and bolts basis, likely years after the fact, when such an accounting was never contemplated by the contract. In such a case, the parties, who have subjected themselves to the expertise of a payment certifier, may not have kept the detailed records that would be necessary to litigate on a nuts and bolts basis;

(ii) From a policy point of view, the court’s already strained resources would be subject to a “severe drain” if the court were in effect required to “recertify” whenever one of the parties was dissatisfied with the results of a certification. Moreover, permitting parties to second guess a payment certifier would “encourage litigation of a very harassing kind”; and,

(iii) If certifications were not given legal effect, parties could not confidently proceed with executing their work.

[93] It must be noted, of course, that the terms of the parties’ contract will dictate the result. Provided they have agreed to be bound on a final basis by the determinations of a payment certifier, then the court will enforce that provision, as long as the payment certifier acts fairly, honestly and impartially and provided there is no collusion between the owner and the certifier. See Kembic Construction Inc. v. King Bible Church, [2005] O.J. No. 5070 at para. 7 (S.C.J.). See also Croft Construction Co. v. Terminal Construction Co., [1959] O.J. No. 278 (C.A.) where Schroeder J.A. held, at para. 18, that where a contract makes it clear that the parties intend the payment certifier to be the final arbiter of what is owing, the certification “is conclusive and binding upon the parties in the absence of fraud or bad faith, or unless the person entrusted with the duty of making it, has knowingly and wilfully disregarded his duty.”

[94] Contractual language that characterizes payment certifications as non-binding or “provisional” will, of course, not have the same force and effect as provisions that make it clear that the payment certifications are intended to be final and binding. See Federated at paras. 44-45.

B. Analysis

[95] As I mentioned, there is no doubt that Mr. Black has not certified any further funds as owing to Pentad. The question for this motion is whether his Payment Certificate 4 is binding on Pentad.

[96] I begin with the contract. It appears clear to me that the parties contemplated that no sums would become due and payable to Pentad for any work performed until that work had been certified for quality and completion by Armor’s authorized engineer. For ease of reference, I repeat the content of s. 4.1:

4.1 The Contractor’s work performed/provided under this Contract shall be inspected for quality and quantity and certified complete, received and approved by [Armor’s] authorized Engineer, prior to any sums becoming due hereunder.

[97] The interpretation of a commercial contract must be “grounded in the text and read in light of the entire contract.” See Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 at para. 57. The cardinal presumption is that the parties meant what they said. See Ventas, Inc. v. Sunrise Senior Living Real Estate Investment Trust, 2007 ONCA 205 at para. 24.

[98] In this instance the parties said that no sums would become due and payable to Pentad until Pentad’s work was certified complete. There is no indication that the authorized engineer’s certifications were to be provisional. Indeed, it appears clear that the intention was to be bound by the determinations of the authorized engineer.

[99] As McKinnon J. observed in Federated, one hundred and fifty years of jurisprudence holds that in circumstances such as this – where payments are dependent on certification – the determination of the payment certifier is final and binding, absent fraud or bad faith, or a knowing and wilful disregard of duty.

[100] Mr. Black’s Payment Certificate 4 is, in my view, presumptively conclusive of what, if anything, is owed to Pentad. In the result, the onus shifts to Pentad to adduce an evidentiary record sufficient to raise at least a triable issue capable of rebutting the presumption.

[101] I earlier enumerated a number of factual issues that Pentad’s counsel raised. I will return to them and address them one-by-one, recognizing of course that they may also have a cumulative effect. The question is, whether taken alone or cumulatively, do they raise a triable issue about the bona fides of the payment certifier?

(i) The Identity of Armor’s Authorized Engineer

[102] The contract does not expressly identify the authorized engineer. Armor contends that it was, at all times, known to Pentad that Mr. Black was the authorized engineer. Pentad disputes that assertion. As I noted, Mr. Vono deposed that both Mr. Black and Stantec acted in the role. He said “both Stantec and GTA prepared Payment Certificates 1, 2 and 3.” GTA is Mr. Black’s firm.

[103] Based on my review of the documents, Mr. Vono’s position is simply factually incorrect.

[104] There was no Payment Certificate 1. There was only a Progress Certificate 1 and Mr. Black is the only engineer to have signed it. He did so under his seal.

[105] Similarly, Mr. Black is the only engineer to sign Progress Certificates 2 and 3, again under his seal.

[106] Pentad proceeded to make applications for payment based on Mr. Black’s Progress Certificates. Indeed, it revised its third invoice and application for payment based on Mr. Black’s revisions.

[107] Armor’s counsel pointed to additional circumstantial evidence he said supports the assertion that Mr. Black was, to Pentad’s knowledge, the only authorized engineer, including:

• Mr. Trifiletti’s evidence that Pentad submitted all of its invoices for payment to Mr. Black and never to Stantec;
• Pentad communicated with Mr. Black, and never Stantec, about the process for certifying its work for payment;
• It was Mr. Black who provided Pentad with the template to follow for submitting progress claims; and,
• It was exclusively Mr. Black who advised Pentad of shortcomings in its invoices and applications. Stantec never had communications of that nature with Pentad.

[108] The foregoing evidence appears to be uncontradicted on this record. I note, as well, that Mr. Pilkey, of Stantec, swore an affidavit on January 17, 2020 in which he said, amongst many other things, that Mr. Black was Armor’s authorized engineer.

[109] From my somewhat limited vantage point, I would make several observations.

[110] First, the contract was not clear about who the authorized engineer was. Moreover, Armor has not produced any evidence that Pentad was ever formally notified of who their authorized engineer was.

[111] Second, there is some confusion about the payment certification process given the inconsistent use of document identifiers.

[112] Third, some of Mr. Pilkey’s actions add to the overall uncertainty about the process. For instance: he failed to issue Payment Certificate 1; he issued, then retracted, Payment Certificate 3; and he issued a previously unheard of document called a “Progress Statement” in relation to Pentad’s third invoice.

[113] Armor’s representative, John Trifiletti, swore affidavits on January 16, 2020 and March 6, 2020, both filed in support of Armor’s motion, the latter in response to Mr. Vono’s affidavit.

[114] Mr. Trifiletti was emphatic about a lot of things. One of them was that Mr. Black was unequivocally the sole authorized engineer on the project. He was the only one, Mr. Trifiletti insisted, who was responsible under the contract for reviewing, certifying and approving Pentad’s work for the purpose of determining what payments should be made to it.

[115] According to Mr. Trifiletti, the ongoing communications Pentad had with Mr. Black make it patently clear that Pentad would have been aware that he was the sole authorized engineer for purposes of payment certifications.

[116] I tend to agree with Mr. Trifiletti. In my view, while Mr. Pilkey’s actions may have confused things, it appears clear that Mr. Black – and not Stantec – was calling the shots as far as the certification of Pentad’s work was concerned. It appears to me that Pentad dealt exclusively, or almost exclusively, with Mr. Black in terms of the certification of the progress of its work. Pentad was never paid until Mr. Black certified their work as complete.

[117] It is, moreover, entirely unclear to me how it helps Pentad even if I were to conclude that there is a triable issue about whether there was one authorized engineer or two. Neither has certified work as completed and payment due to Pentad.

[118] The most current certificate issued by an authorized engineer is Payment Certificate 4, issued by Mr. Black. It reflects that Pentad has been overpaid. There does not appear to be a dispute that Mr. Black was an authorized engineer, nor does his authority to issue progress certificates appear to be contested.

[119] In my view, the fact that there may be some confusion about Stantec’s role does not aid Pentad.

[120] One suggestion offered by Pentad’s counsel is that Armor should perhaps be bound by Stantec’s Payment Certificate 3. Such an assertion gets Pentad nowhere. First, because Mr. Pilkey withdrew his certificate almost as quickly as he issued it. Second, because Pentad subsequently reviewed and revised its invoice and application for payment in relation to its third invoice. Finally, because Pentad’s third invoice has been paid and Pentad has confirmed that it has been paid in full for the work reflected in that invoice.

(ii) Extras

[121] The contract is very clear about extras and the particular circumstances in which they will be paid. They needed to be the subject of prior, written approval signed by Armor and Pentad.

[122] In this instance there were only two formal, written change orders, neither of which required additional payments to Pentad.

[123] Even if Pentad has an argument that it should be paid for work extraneous to the contract, the fact is, any such work has not been certified as owing. The assertion that extra work was completed, over and above that called for in the contract, can not undermine the presumption that the authorized engineer’s certificates are final and binding.

(iii) The Fill Credit

[124] Like extras, any dispute about whether the fill credit is included in the fixed price, or yet to be adjusted for, has no bearing on the issue of the binding nature of the authorized engineer’s certificates. There is no evidence that the authorized engineer approached the fill credit in a bad faith manner.

(iv) HST

[125] The contract is clear that HST is included in the fixed price. The authorized engineer appears to have mistakenly authorized payment of HST in addition to the fixed price. To state the obvious, that is a mistake that has thus far inured to Pentad’s benefit. It does not assist in rebutting the presumptive finality of Mr. Black’s certificates.

(v) The Time Period Covered by Progress Certificate 3

[126] Recall that Pentad’s third invoice was rendered on May 9, 2017 and reflected work performed to April 28, 2017. But by the time that invoice was approved for payment, the progress certificate issued by Mr. Black reflected work performed to July 31, 2017. Pentad purports to contest the time frame covered by that progress certificate.

[127] I would make two observations.

[128] First, this is a non-issue. The invoice was paid. What is presently in issue between the parties is whether the most recent certificate issued by Mr. Black is binding. That certificate – Payment Certificate 4 – reflects the value of all of the work done on the project by Pentad between December 2016 and March 12, 2018. It shows the progress made by Pentad on various aspects of the contract to that date. It factors in amounts paid to Pentad to date. And it concludes that Pentad has been overpaid as at March 12, 2018 for its work on the contract to that point.

[129] In my view, the “period covered” aspect of Progress Certificate 3 is inconsequential at this point. The entirety of Pentad’s work product is subsumed in Payment Certificate 4.

[130] Second, Mr. Vono signed Progress Certificate 3 on behalf of Pentad agreeing that it covered the period to July 31, 2017. Moreover, he subsequently signed two statutory declarations confirming that Pentad had been paid in full up to that date. He then signed a receipt on September 1, 2017 confirming that Pentad was paid up to date. It hardly lies in his mouth now to suggest that Pentad was not paid up to date to that point.

[131] Mr. Vono’s affidavit of February 20, 2020 is quite lengthy and detailed. But nowhere in that affidavit does he provide even a hint of an explanation for why he swore two statutory declarations and a release, all confirming that Pentad was paid up to date to July 31, 2017. He said only that the documents were prepared by Armor.

(vi) The Failure of the Authorized Engineer to Certify Work on a Monthly Basis

[132] Pentad contends that the contract required the authorized engineer to certify Pentad’s work on a monthly basis. The fact that several months went by between Pentad’s May 9, 2017 invoice and Progress Certificate 3, which was issued on August 11, 2017, suggests, in Pentad’s submission, that Mr. Black was not dealing with them in good faith.

[133] Moreover, there was an even lengthier gap after August 11, 2017 and Mr. Black’s fourth certificate, which was not signed until March 2018 and only after Pentad had filed its lien.

[134] There are a number of problems with Pentad’s assertion.

[135] First, the contractual language relied upon by Pentad is found in s. 4.0 of the contract. For ease of reference, I repeat the relevant part:

4.0 The Contractor shall invoice and/or make application for payment for the portions of work performed and certified complete. Payment will be made to the Contractor 45 days after receipt of the certificate and clearances as set out in this Contract, in an amount equal to 90% of the value of the portions or (sic) work certified completed to the end of the previous month less the aggregate of the previous payments…

[136] No one is ever going to accuse s. 4 of the contract of being a model of clarity and strong draftsmanship. But apart from the fact that the word, “month”, appears in the section, I see nothing that compels the authorized engineer to certify Pentad’s work monthly. Presumably, if that were the case, the section would have provided that Pentad was to invoice monthly and that the authorized engineer was to review those invoices monthly for purposes of certification. That is certainly not how I read the section.

[137] Second, Pentad’s first application for payment was for the period December 1, 2016 to March 7, 2017, which tends to belie any suggestion that Pentad was expecting monthly certifications.

[138] Third, the record makes it apparent that Mr. Black was not simply ignoring Pentad’s invoices. There were communications back and forth between Mr. Black and Pentad about what was required before certifications could occur.

[139] The most significant impediment to certification in the fall of 2017 appears to have been the request by Mr. Black that Pentad obtain a topographic survey to confirm the extent of its work. There are repeated emails from Mr. Black to Pentad regarding this requirement.

[140] Pentad appears to have provided partial topographic surveys, but they were unsatisfactory to Mr. Black. A complete topographic survey was eventually obtained by Stantec and it appears to have formed the basis of Mr. Black’s final certificate – Payment Certificate 4.

[141] Fourth, Pentad was engaging in some unusual invoicing practices throughout the fall of 2017 and the winter of 2018. As I noted above, it delivered an invoice dated October 3, 2017 in the amount of $477,325.45, which it later reduced to $381,713.21. It delivered a further invoice on November 14, 2017 for $1,283,722.49, which appears later to have been wholly withdrawn. It delivered a final invoice on February 21, 2018, which was reduced to $392,043.90. Its lien is based on this final invoice.

[142] On February 26, 2018 Mr. Black responded to Pentad’s final invoice by email. He repeated the concerns he raised in his February 9, 2018 email about Pentad’s invoicing history and he confirmed that he would certify Pentad’s work once he received a complete topographic survey.

[143] Shortly after the topographic survey came in, Mr. Black did complete and deliver Payment Certificate 4.

[144] The evidence falls well short, in my view, of being sufficient to support an inference that Mr. Black was acting in bad faith or was otherwise knowingly and wilfully disregarding his duties as a payment certifier.

(vii) The Presence of Pentad on Site Between August 2017 and January 2018

[145] Finally, Pentad takes issue with the calculations performed by Mr. Black on Payment Certificate 4.

[146] Pentad submitted an application for payment to Mr. Black on or about October 2, 2017. It was seeking a payment of $479,088.93 for work purportedly done in the period August 1 – 31, 2017. Presumably this application is related to Pentad’s invoice dated October 3, 2017, but the amounts do not jive.

[147] At any rate, Mr. Black sent an email to Pentad on November 21, 2017 attaching a marked-up copy of the October 2^nd application for payment. He indicated that his mark-ups showed revised percentages complete and he asked Pentad to revise their claim accordingly. He also asked that Pentad provide a topographic survey to verify quantities.

[148] The value of the contract was broken down into 9 parts:

Part	Description	Contract Amount
A	General Requirements	$ 129,000
B1	Site Preparation	$ 235,000
B2	Earthworks	$ 236,140
C	Stormwater Management - North	$ 85,000
C	Stormwater Management - South	$ 140,000
D	Storm Sewers	$ 220,000
E	Primary Roads	$1,150,000
F	Boundary Roads Upgrade	$ 360,000
G	Secondary Roads	$ 240,000

[149] According to Mr. Black’s mark-ups, as at September 30, 2017, Part A was 90% complete, Part B1 was 90% complete, Part B2 was 70% complete, Part E was 10% complete and Part F was 5% complete. The value of all completed work, based on the contract allocations, was $625,898.

[150] To the end of Progress Certificate 3, which covered up to July 31, 2017, Pentad had billed $331,059.44.

[151] Leaving aside the statutory holdbacks and the HST issue, deducting the amount billed to July 31, 2017 from the values Mr. Black’s mark-ups suggested were complete by September 31, 2017, left, by my calculations, an unpaid balance of $294,838.56. Pentad’s counsel did a calculation that was slightly different than mine, but certainly within the same ballpark. The precise math is not particularly important. The important factor is that there appeared to be, according to Mr. Black’s November 21, 2017 mark-ups, a significant amount owing to Pentad as of September 30, 2017.

[152] Pentad continued to work on the site on a daily or near daily basis after September 30, 2017 until the early new year. Yet on March 12, 2018, Mr. Black released Payment Certificate 4, which certified that to date Pentad had been overpaid by $20,490.

[153] As I noted above, the change of values between Progress Certificate 3 and Payment Certificate 4 were minimal and included just 3 elements:

(i) An increase in the value of work performed in Part A of $29,510;

(ii) A value of $48,858.85 for the supply of a culvert, which was a component of Part E, and which was set-off by the fact that the owner pre-paid for the culvert; and,

(iii) A set-off of $50,000 for over-filling by Pentad above design grades, calculated as 10,000 cubic metres of fill at a removal rate of $5 per cubic metre.

[154] Pentad is nothing short of flabbergasted that it could have worked on the site for some six months after July 31, 2017 and been credited with - $20,490 for the value of its work. Moreover, it questions what happened to the values attributed by Mr. Black in his November 21, 2017 mark-ups.

[155] Mr. Vono spent considerable time in his February 28, 2020 affidavit outlining all of the work Pentad was engaged in between May, 2017 and January, 2018. In effect, his position is that it is simply impossible that Pentad did not complete work of value during that entire time period.

[156] Armor’s counsel offered two responses. First, that Pentad may have been working on site, but they were working on importing fill, which was not work Armor was paying them for.

[157] Second, that Payment Certificate 4 was based on the topographic survey obtained by Mr. Black on March 5, 2018, which showed the state of the site, including the quantities of work performed by Pentad, as at that date.

[158] I confess that there are numerous issues surrounding Pentad’s work and its invoicing that make little sense to me.

[159] Pentad agreed, quite clearly, that it was paid up-to-date to July 31, 2017. Nevertheless, Mr. Vono went to great lengths in his affidavit to detail work performed by Pentad after May 1, 2017, as though he is still owed something for that work. That quirk aside, it is, at least superficially, puzzling that Pentad could have worked steadily onsite from August 2017 to January 2018 and accomplished as little as Mr. Black certified.

[160] On the other hand, a comparison between Pentad’s invoices dated October 3, 2017 and February 21, 2018 is revealing. It tends to support the conclusion that little value was added by Pentad through the fall of 2017 and the first month of 2018:

Part	Description	October 3, 2017	February 21, 2018
A	General Requirements	$116,100.00	$109,650.00
B1	Site Preparation	$211,500.00	$176,250.00
B2	Earthworks	$475,101.00	$166,500.00
C	North SWM Pond
C	South SWM Pond	$ 35,000.00	$ 98,000.00
D	Storm Sewers
E	Primary Roads	$115,000.00	$115,000.00
F	Boundary Roads	$ 18,000.00
G	Secondary Roads
	Fill Credit	($262,575.00)
	Extras	$ 51,140.00
	Totals	$708,126.00	$716,540.00

[161] It is immediately apparent that on Pentad’s own records, the amount of work they performed on a number of the key elements of the project went down between October 2017 and February 2018. Overall, their invoices reflect only a slight enhancement in value between the end of August 2017 and the end of January 2018. Mr. Vono offered no explanation for these mystifying aspects of Pentad’s invoicing. In my view, the questions raised by Pentad’s invoicing support Mr. Black’s decision to insist on a topographic survey before certifying any more of its work.

[162] It is not possible for me to determine, on this motion, whether the value of work reflected in Mr. Black’s Progress Certificate 4 – is accurate and fair. But Armor is not asking me to make that determination. Their position is that Mr. Black’s certificate is presumptively final and binding. The presumption may only be set aside on a showing of bad faith, fraud or a knowing and wilful disregard of duty.

[163] There may be reasons to question Mr. Black’s calculations. And the evidentiary record absolutely does not permit me to make a nuts and bolts calculation of what sum, if any, might reasonably be due to Pentad. But, again, that is not the issue. In light of the parties’ agreement, the court is not to undertake a recertification of Pentad’s work.

[164] Whether Pentad’s arguments about the amount of work they performed have any validity, they do not amount to an indictment on Mr. Black’s integrity, unless I am being asked to infer that his calculations set out on Payment Certificate 4 must inevitably reflect bad faith. I am certainly not in a position to draw any such inference on the record before me.

C. Conclusion

[165] Pentad has undoubtedly raised a number of factual issues in dispute between the parties. And most of them are not the type of issue that I can, or should, resolve on a motion of this nature. I agree with their counsel’s argument on that point.

[166] Having said that, none of the factual issues raised by Pentad go to the bona fides of Armor’s authorized engineer.

[167] Stepping back a moment and looking at the forest rather than the trees, it appears to me that Pentad has never asserted that Armor’s authorized engineer acted in bad faith, or fraudulently, or failed to be impartial, or knowingly and wilfully disregarded his duty. That is the case whether the authorized engineer was Mr. Black, Stantec, or a combination of the two.

[168] In its statement of defence and counterclaim, Armor pleaded the provisions of s. 4.0 and 4.1 of the contract; specifically, that no payments were due to Pentad unless certified.

[169] In response, Pentad said, at para. 10 of its reply and defence to counterclaim:

…Pentad states that the Owner failed to supply an engineer to inspect and certify completion, pursuant to their obligations under section 4.1 of the Contract. The Owner’s (sic) originally used Stantec as their engineer, however, failed to use Stantec throughout the Project. At material times, despite work being completed and ready for inspection and certification, the Owners failed to provide and/or neglected to have an engineer available to accomplish this task, leaving completed work that was never inspected by the Owners, as required by the Contract.

[170] It is apparent that Pentad did not attack the integrity or impartiality of either Mr. Black or Stantec, but rather alleged that Armor failed to provide an authorized engineer. Such an allegation does not stand up to scrutiny, however, given the persistent involvement of Mr. Black from and after the time of Pentad’s first invoice.

[171] Mr. Vono, in his affidavit sworn February 28, 2020 complained that Armor failed to have its payment certifier certify their work as complete as they submitted their invoices after June 1, 2017. He does not, however, offer an evidentiary basis upon which I could conclude that he has an arguable, or any, claim that Armor’s authorized engineer acted in bad faith, or fraudulently, or failed to be impartial, or knowingly and wilfully disregarded his duty. He just seems to be strongly of the view that Mr. Black’s calculations are wrong.

[172] I am unable to resolve all of the factual issues in contention between the parties. But based on 150 years of jurisprudence regarding the role of a payment certifier in a commercial construction contract, I am not to do so. The law appears clear.

[173] There is no evidence in the record upon which any trier of fact could reasonably conclude that Armor’s payment certifier – whether Mr. Black or otherwise – acted fraudulently, or in bad faith, or wilfully and knowingly disregarded his duty.

[174] In the result, Armor’s motion succeeds. On the basis of Mr. Black’s Payment Certificate 4, there is nothing owing to Pentad. Indeed, they have been overcompensated by about $20,000.

[175] Having said that, there are two items that still need to be accounted for. First, is the HST owing on the culvert. Armor prepaid the cost of the culvert, but did not include HST in that prepayment. The HST is $6,351.65. In addition, Pentad has not been paid the statutory holdback funds retained from its first three invoices. The total holdback is $33,105.95. The total of the holdback and unpaid HST is $39,457.59.

[176] After deducting the certified overpayment of $20,490, it would appear to me that Pentad’s lienable claim is, at best, $18,967.59 plus 25% for costs, which is a total of $23,709.48.

[177] I therefore order the reduction in Armor’s security to $24,000.

[178] The parties are urged to reach an agreement on the issue of costs. Should they be unable to do so, they may make written submissions to me, not to exceed three pages. Armor’s submissions are to be served and filed by February 17, 2021; Pentad’s by March 3, 2021.

Boswell J.

Released: February 3, 2021