COURT FILE NO.: CV-21-673311 DATE: March 14, 2022
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Jody Voutour v. MVG Investments Inc and Vasso Georgiopoulos ;
BEFORE: ASSOCIATE JUSTICE C. WIEBE
COUNSEL: Paul Starkman for the defendants; Adam J. Ezer for the plaintiff.
HEARD: January 31, 2022.
REASONS FOR DECISION
[1] This is a construction lien action. The defendants bring this motion for an order under Construction Act, R.S.O. 1990, c. C.30 (the “CA”), section 47 for an order discharging the plaintiff’s claim for lien, vacating the certificate of action and dismissing this action. Four grounds were presented for the motion:
- the contract that allegedly gave rise to the lien claim is an oral contract and as such this action is prohibited by operation of section 4 of the Statute of Frauds, R.S.O. 1990, c. S.19 (the “SOF”);
- the action is against the heirs, executors, next of kin, administrators and assigns of a deceased person and as such under section 13 of the Evidence Act, R.S.O. 1990, c. E.23 (the “EA”) cannot proceed to judgment without corroboration, and the defendants allege there is no such corroboration here;
- the alleged oral agreement is not enforceable due to the lack of certainty concerning the essential elements of a contract; and
- there is no claim for unjust enrichment.
Background
[2] Based on the three affidavits filed in this motion, I glean the following facts. Vasso Georgiopoulos is the registered owner of a property located at 3472 Danforth Avenue. Mr. Voutour leases and resides presently in unit 4 of that property which he has done since January, 2021.
[3] Prior to January, 2021, Mr. Voutour resided in a nearby property which he leased from Ms. Georgiopoulos’ husband, Mike Georgiopoulos. Mr. Voutour knew Mr Georgiopoulos since 2001 and had done several small construction jobs for him.
[4] There was a fire in unit 4 of 3472 Danforth Avenue, which was repaired by an insurance company by the end of 2019. Mr. Georgiopoulos was the principal of MVG Investments Inc. (“MVG”) at the time. MVG manages 3472 Danforth Avenue.
[5] According to Mr. Voutour’s affidavit, Mr. Georgiopoulos was dissatisfied with the work done by the insurance company in unit 4 and had MVG retain Mr. Voutour under an oral contract to completely redo the kitchen and bathroom, including the installation of new tiling, a skylight, stainless steel cabinetry and a jacuzzi. Mr. Voutou said that the arrangement he had with MGV was that Mr. Voutour would be paid for his materials and labour out of the proceeds of sale of 3472 Danforth Avenue, which Mr. Georgiopoulos said would take place in 10 years.
[6] Mr. Voutour said that Mr. Georgiopoulos purchased the tiles for his work. Mr. Voutour said that he purchased and installed a new fridge, stove, jacuzzi tub, quartz countertop and skylight in addition to the materials necessary to do the renovations specified by Mr. Georgiopoulos.
[7] Mr. Georgiopoulos died on June 8, 2020. Mr. Voutour continued working. He said he finished the work on November 8, 2021.
[8] Ms. Georgiopoulos now wishes to sell the property and says she has no knowledge of these arrangements and the work. On November 26, 2021 Mr. Voutour registered a claim for lien in the amount of $30,342. On December 8, 2021 he commenced this action and registered a certificate of action.
Test
[9] In PRW Excavating Contractors Ltd. v. Nejm, 2021 ONSC 6113 at paragraph 22, Associate Justice McGraw aptly summarized the test to be met on a motion under CA section 47: “The Divisional Court has recently held that the correct test on a motion to discharge a lien under s. 47 of the Act is whether there is a triable issue in respect to any of the bases on which discharge of the lien is sought (Maplequest (Vaughan) Developments Inc. v. 2603774 Ontario Inc., 2020 ONSC 7000 at para. 25; R&V Construction Management Inc. v. Baradaran, 2020 ONSC 3111 at para. 46; GTA Restoration v. Baillie, 2020 ONSC 5190 at paras. 42-43).”
[10] The onus is, therefore, on the defendants to prove that there are not triable issues concerning the four grounds on which they seek to discharge the Voutour claim for lien. Have the defendants met this test?
Statute of Frauds
[11] SOF section 4 prohibits an action concerning an interest in land that is based on an oral contract. That section specifies that only written contracts concerning interests in land are actionable. Here is section 4:
No action shall be brought to charge any executor or administrator upon any special promise to answer damages out of the executor’s or administrator’s own estate, or to charge any person upon any special promise to answer for the debt, default or miscarriage of any other person, or to charge any person upon any contract or sale of lands, tenements or hereditaments, or any interest in or concerning them, unless the agreement upon which the action is brought, or some memorandum or note thereof is in writing and signed by the party to be charged therewith or some person thereunto lawfully authorized by the party.
[12] Mr. Starkman argued that Mr. Voutour’s construction lien is just such an interest in land that is based on an oral renovation contract. He argued that this lien action is therefore prohibited by section 4, and that this action should be dismissed and the lien discharged.
[13] I do not accept this argument for the following reasons. First, it is well established law that the CA is a complete code concerning the construction lien remedy. The CA created the lien remedy, and governs its preservation, perfection, determination and enforcement. Indeed, it explicitly amends other laws to conform with the requirements of the CA. For instance, CA section 3(3) expressly exempts the CA from the notice requirements of section 18 of the Crown Liability and Proceedings Act, 2019 in construction lien actions against the Crown. CA section 4 renders void any contractual provision that purports to take away lien rights from lien claimants. CA section 5(1) expressly deems all construction contracts to be amended to conform to the CA. In Part VIII and O. Reg. 302/18 the CA establishes jurisdiction and procedures that are unique to lien litigation. In Part XI the CA establish rules of priority when it comes to competing rights and the enforcement of construction liens. It is a comprehensive statute concerning construction liens.
[14] Second, there is nothing in the CA that deprives those who supply services and materials to an improvement under an oral contract of lien rights. CA section 14(1) states that any person who supplies services and materials to an improvement has a lien upon the interest of the owner for the “price” of those services and materials. CA section 15 states that a lien right “arises and takes effect when the person first supplies services or materials to the improvement.” As it pertains to this motion, “price” for the purpose of section 14(1) is defined in CA section 1(1) to mean the subcontract or contract price agreed on between the parties. In section CA 1(1) a “contract” is defined as an agreement between the owner and the person contracting with the owner, and a “subcontract” is defined as an agreement between a contractor and a person not contracting with the owner or between two subcontractors. In none of these provisions is a distinction made between an oral contract and a written contract. An oral contract is as enforceable at law as a written contract. That lack of distinction means, in my view, that the CA provides for lien rights arising from oral contracts.
[15] Third, while the SOF section 4 may apply on its face to construction liens arising from oral contracts (as such liens are an “interest” in land) and while the CA does not expressly exclude the application of the SOF section 4 as it may pertain to liens arising from oral contracts, there is a generally established principle of statutory interpretation that applies. As stated by the author of Sullivan on the Construction of Statutes, 6th Edition (LexisNexis Canada Inc., 2014) on pages 363-4, there is the maxim called “implied exception.” This principle applies as follows: where two statutory provisions are in conflict and one of them deals specifically with the matter in question while the other has a more general application, the conflict may be resolved by applying the specific provision to the exclusion of the more general one. This is done only where the application of the general provision would render the specific one superfluous.
[16] I find that to be case here. The SOF section 4 is of general application concerning all contracts pertaining to an interest in land. The CA is of specific application to liens arising from construction work and construction contracts – a complete code concerning construction liens. If SOF section 4 applied to construction liens, the effect would be to deprive those with oral construction contracts of the lien rights the CA otherwise provides. Therefore, to harmonize the statutes, the specific provision must be viewed as being an exception to the general provision. That is what I find here. The CA as it applies to oral contracts are an exception to the SOF section 4.
[17] Mr. Starkman argued that the apparent conflict between the two statutes is blunted by the doctrine of “part performance.” He also used the doctrine of part performance to try to explain why he could find no case authority in support of his argument on this point.
[18] The doctrine of “part performance” allows a party to avoid the effect of SOF section 4 if it can prove that the parties have partly performed the oral contract unequivocally in relation to the subject land; see Deglman v. Guaranty Trust Co. of Canada and Constantineau, [1954] SCR 725 at page 735.
[19] Part performance of an oral construction contract, Mr. Starkman argued, would typically be part payment by the payer, which did not happen with Mr. Voutour. Mr. Starkman argued that it is this part performance that historically has allowed lien rights concerning oral constructions contracts to be enforced. He again had no authority in support of this proposition. He also argued that Mr. Voutour’s situation of completed supply without any part payment is an anomaly, which explains, so the argument went, the absence of case authority applying the SOF section 4 to the CA.
[20] I do not accept these arguments. Again, I find that the CA is a complete code concerning construction liens, that the CA allows for lien rights to arise from oral construction contracts, and that in this regard the CA forms an exception to the SOF section 4. There is an obvious reason for the absence of case authority in support of Mr. Starkman’s proposition: courts have instinctively understood this exception as have parties, at least until now.
[21] Furthermore, part performance does not blunt the conflict between the statutes. The notion that lien rights for those supplying services and materials to an improvement under an oral contract arise only with part payment is an affront to CA section 15, namely the section which specifies that a lien right arises when a person first supplies services and materials. It would also introduce a level of uncertainty to lien rights that is foreign to the underlying philosophy of the CA.
[22] I find that the defendants have failed to meet the section 47 test in relation to this ground.
Evidence Act section 13
[23] The Evidence Act, R.S.O. 1990, c. E23 section 13 says the following:
In an action by or against the heirs, next of kin, executors, administrators or assigns of a deceased person, an opposite or interested party shall not obtain a verdict, judgment or decision on his or her own evidence in respect of any matter occurring before the death of the deceased person, unless such evidence is corroborated by some other material evidence.
[24] Mr. Starkman argued that this section applies and that it justified ending this action and discharging the lien as, he argued, Mr. Voutour has no corroboration for the oral agreement he says he had with Mr. Georgiopoulos.
[25] As Mr. Ezer pointed out, there is a very simple and complete response to this argument. This action is not against the deceased Mike Georgiopoulos. It is against MVG and Ms. Georgiopoulos. EA, section 13 does not apply.
[26] I find, as a result, that the defendants have failed to meet the section 47 test in relation to this ground.
Uncertainty
[27] Mr. Starkman also argued that the action should fail because the oral contract on which it is based is unenforceable due to the lack of certainty of key elements. Lack of certainty of essential terms of a contract has been found to render the contract unenforceable; see Ravenda Homes Ltd. v. 1372708 Ontario Inc., 2015 ONSC 8040 at paragraph 95.
[28] Mr. Starkman did not specify what the essential elements of a construction contract were. In The Gatti Group Corp. v. Zuccarini, 2020 ONSC 2830 at paragraph 71 I found that there were three essential elements of a construction contract: scope, price and schedule.
[29] In his affidavit, Mr. Voutour made it clear that the contract on which he relies was oral. In paragraphs 5, 6, 7 and 8 of his affidavit Mr. Voutour stated that the oral contract he made with MVG through Mike Georgiopoulos involved the “high-end” renovation of the unit 4 kitchen and bathroom. He said that Mr. Georgiopoulos specified what he wanted, which included stainless steel cabinetry, a jacuzzi tub, new fridge, new stove, quartz countertop, a skylight and other materials. This is sufficient evidence of certainty of scope. In essence, Mr. Voutour deposed that he supplied and installed what Mr. Georgiopoulos specified.
[30] As to price, Mr. Voutour stated Mr. Georgiopoulos said Mr. Voutour would be paid for his costs of materials and labour out the proceeds of sale of the property whenever it was sold, which, according to Voutour, Mr. Georgiopoulos said would be in ten years. This is sufficient certainty as to price.
[31] As to schedule, Mr. Voutour made it clear in his affidavit that he had a long-standing relationship with Mr. Georgiopoulos and that there was no real urgency to the work. The point of the project was obviously to use this unit to enhance the attractiveness of the overall property whenever it was sold. At the time Mr. Voutour made his arrangement with MVG through Mr. Georgiopoulos the anticipated sale was well into the future. Therefore, there was no urgency to the work. In short, the schedule was to get the work done on Mr. Voutour’s schedule in time for this sale whenever that would be. The sale timeline obviously was accelerated after Mr. Georgiopoulos suddenly died on June 8, 2020. This is sufficient evidence of certainty of schedule.
[32] Therefore, I find that the defendants have failed to meet the section 47 test in relation to this ground as well. At minimum there is a triable issue on this point.
Unjust enrichment
[33] In his statement of claim Mr. Voutour claims as alternative relief damages in the amount of the claim for lien, $30,142, on account of unjust enrichment. This pleading was not particularized. Mr. Starkman argued that there was no evidentiary foundation in this motion for this relief.
[34] I find that this aspect of the motion has nothing to do with the claim for lien. It concerns an alternative remedy. Therefore, it is not the proper subject matter of a motion under section 47 as indicated in PRW, op. cit., para. 22.
[35] This aspect of the motion is in effect a motion for partial summary judgment for which leave under O. Reg. 320/18, section 13 has not been sought or given. This is the section that requires leave of the court for any interlocutory step. It specifies that leave should only be given if there is proof that the step is necessary and would expedite the resolution of the issues in dispute. Had leave been sought, I would not have granted it, as this part of the motion would not dispose of the core issues in the case.
Conclusion
[36] I, therefore, dismiss this motion.
[37] As to costs, Mr. Starkman in closing argument conceded that the defendants would pay Mr. Voutour’s claim in costs, namely $7,634. I order that the defendants pay this amount to Mr. Voutour in thirty days.
DATE: March 14, 2022
ASSOCIATE JUSTICE C. WIEBE